ConocoPhillips, Chevron sign amended Sumatra gas supply deal

Indonesian units of US oil gas giants ConocoPhillips and Chevron have signed last week heads of agreement (HOA) on gas supply from the former?s gas field in South Sumatra to the latter?s steam flood facilities in Duri, Central Sumatra, that will replace gas-to-crude swap arrangement between the two companies that is currently in place.

BPMIGAS Chairman R. Priyono told Petromindo.Com on Friday that the HoA was signed on July 7, 2009.

Under the current swap arrangement ConocoPhillips, which supplies gas from its Corridor Block will receive crude produced from Duri equivalent to gas volume it supplies. Previous reports said that ConocoPhillips could get some 50,000 BPD of Duri crude from the swap deal.

Under the new deal, Chevron will pay gas from ConocoPhillips which price was set under certain undisclosed formula, BPMIGAS Senior Official Amir Hamzah said, adding that such arrangement will positively impact Chevron?s lifting figure.

BPMIGAS Spokesperson Sulistya Hastuti said that the deal would call for the supply of around 400MMCFD of gas from Corridor Block to Duri until 2021. He did not say when the Gas Sales Agreement will be signed.

Chevron, through its Central Sumatra oil fields, is Indoensia?s top oil producer with production of around 370,000 BPD. The company is struggling to arrest steep production decline as some of its fields have been producing oil for more than 30 years. Chevron receives Corridor Block gas through 500-km pipeline owned by PT Transgasindo, a subsidiary of state gas distribution firm PGN. (godang)