?BP not serious in its request for contract extension?

The government may turn down BP Indonesia?s request for an early extension of its contract in managing the Terang Sirasun gas field of the Kangean block, East Java because the British company has indicated no serious efforts in the future development of the gas block, Koran Tempo daily reported on Wednesday.

?It seems that they (BP Indonesia) are not so serious in their request for the earlier extension of the Kangean block,? said Kardaya Warnika, the deputy chairman of BP Migas, the government?s agency responsible for gas and oil exploration and production activities.

Kardaya said that the government was still studying the company?s contract extension request and at the same time also asked the company?s concrete programs in the future development of the gas field.

?But if the company plans to sell the block to other party, we will immediately turn down the request,? he said.

BP plans to sell its interest in the Kangean block and Muria block in Central Java. The auction for the two gas blocks was opened in March and the winner will be announced later in April. The bidders include local energy company PT Medco Energi.

Kardaya said that BP Migas had not received a formal report from BP about the auction of the two gas blocks. ?We will soon clarify the auction specially related to the future of the Kangean,? he said.

BP?s contract in the Kangean block will actually end in 2010 but the company has asked for early extension of the contract until 2030. But the government has given no response because under the existing regulation, the extension of the contract would be issued only three years before the contract ends. (*)