Despite spending $US350 million ($A472 million) on the project, the major has failed to complete a feasibility and economic study that would include securing buyers for gas produced, which prompted the Government to terminate the contract.

ExxonMobil’s previously held 76% working interest may change as the company negotiates for a new deal, which must be struck with state oil and gas regulator BPMIGAS by year-end.

The company claimed its contract ran until 2009 and progress toward securing a buyer was significant.

Developing the site is likely to cost up to $30 billion because the gas is low quality and has a very high carbon dioxide content (70%) making it difficult to extract and process.