BPMIGAS to recommend BP?s contract extension

BPMIGAS, which holds the highest authority over the country?s upstream oil and gas sector, would recommend the government extend BP Indonesia?s contract on the Kangean block offshore East Java, agency chairman Rachmat Sudibyo said in a parliamentary hearing Thursday.

?BPMIGAS has prepared its response (to BP Indonesia?s request for the contract extension) and we shall submit it as a recommendation for the Minister of Energy and Mineral Resources to consider extending the contract,? Rachmat said in his prepared remarks.

Rachmat said, based on a study by BP Migas, gas reserves in Kangean?s Terang Sirasun and Batur fields were believed to be bigger than the estimates made by BP Indonesia.

?Gas reserves from the blocks are of a more optimistic level,? Rachmat said, while refraining from disclosing their volumes.

BP has estimated that both fields contain about 1 trillion cubic feet of gas.

BP Indonesia, the Indonesian unit of energy giant BP PLC, has requested the government to extend its BP Kangean contract for 20 years. The contract is due in 2010.

It currently operates the Pagerungan field, which supplies gas to East Java, but the field?s gas reserve has much depleted over the past several years. Now, it wants to develop Terang Sirasun so as to maintain gas volumes supplied to the province. (godang)