Govt considers extending Eni exploration permit in Ambalat

The government might extend the exploration permit of Italian firm Eni Spa on the Ambalat block offshore East Kalimantan to give it more time explore the area despite the "troubles" caused the Malaysian warship.

?Our policy is that in the event of force majeure, contractors can tell the government that they are in trouble. It is possible for them to ask for exploration permit extension,? Minister of Energy and Mineral Resources Purnomo Yusgiantoro told reporters on Tuesday on the sidelines of a meeting with the House of Representatives? Commission VII.

Eni has officially asked for exploration permit extension, citing ?troubles? it had experienced in the area, according to Purnomo.

?The government understands that Eni is experiencing troubles in its operation in Ambalat block. We tell them to continue their activities. This is not a disputed area,? Purnomo said.

Indonesia claims the Ambalat waters part of its territory, so does Malaysia. A tension occurred in the area last week when Indonesian warships chased away a Malaysian warship, claiming the latter trespassed on Indonesian territory.

Indonesia has awarded several oil and gas concessions for investors in the area, including the Ambalat block for Eni and the East Ambalat block for Chevron. Chevron?s contract on the East Ambalat block expires in 2010 and the firm has asked for an extension of the contract.

Purnomo said the contract extension for Chevron is ?being processed?, without providing details. (Godang)