The present invention provides a method for recovering a natural gas contaminated with high levels of carbon dioxide. A gas containing methane and carbon dioxide is extracted from a reservoir containing natural gas, where carbon dioxide comprises greater than 40 vol. % of the extracted gas. The extracted gas is scrubbed with a wash effective to produce a washed extracted gas containing less carbon dioxide than the extracted gas and at least 20 vol. % carbon dioxide. The washed extracted gas is oxidized with an oxygen containing gas in the presence of a partial oxidation catalyst to produce an oxidation product gas containing hydrogen, carbon monoxide, and carbon dioxide. The oxidation product gas is then utilized to produce a liquid methanol product.