BP is seeking fresh loans to build gas production facilities in Tangguh
Thursday, February 6 2003 - 03:41 AM WIB
"We have met several banks and negotiations are still going on," President of BP Indonesia Bill Schrader told the newspaper in an interview. Schrader said that the company still negotiated types of loans that would be raised to finance the development of the gas field.
Schrader declined to unveil names of the banks but said that the company needed a total of US$2.5 billion to develop the gas production facilities and two gas liquefaction plants. The funds will not include exploration cost that could reach about $750 million.
BP Indonesia secured a 25-year contract early last year to supply 2.6 million tons of Liquefied Natural Gas (LNG) to the Chinese province of Fujian a year. The total value of the contract reaches about $8.5 billion.
As part of the deal, China National Offshore Oil Corp has been allowed to buy 12.5 percent share in the oil field from BP Indonesia. The funds injected by CNOOC for the purchase of the 12.5 percent share totals about $275 million.
According to the deal, CNOOC will disburse the equity funds in five years until 2007 when the gas supply to the Fujian province will be started.
Schrader said that BP Indonesia was still negotiating the sales of the LNG from the Tangguh to Japan and the Philippines. Besides the two countries, other potential buyers include India and the United States especially industrial companies located in the country?s western coast.
BP Indonesia operates the Tangguh gas field, which has a certified gas deposit of about 14.4 trillion cubic feet, under a production sharing contract with the Indonesian the government. The company will receive 30 percent while the government another 70 percent from the net production (after the deduction of total cost or cost recovery). (*)