Govt extends Energi Mega Persada?s Kangean block contract

The government has decided to extend the contract owned by Indonesian private firm Energi Mega Persada on the Kangean block in East Java.

Iin Arifin Takhyan, director general of oil and gas at the Ministry of Energy and Mineral Resources said Energi Mega Persada had had its contract on the block extended for another 20 years.

The contract extension will be signed mid-December, he said.

The block was formerly owned by Anglo-American energy giant BP PLC. Early in August, Energi Mega through Energi Mega Pratama Inc won a tender to take over the gas block from operator BP for US$165 million.

Kangean production sharing contract covers the Pagerungan gas fields (already in production), Terang Sirasun and Batur fields. The current contract on the block expires on Nov. 13, 2010.

Consultancy firm DeGolyer MacNaughton certified in April 1995 that proved (1P) gas reserves in Pagerungan field was 1,45 TCF, while Terang Sirasun and Batur fields, which are yet to be developed, had combined proven reserves of 1,26 TCF.

Pagerungan gas field is currently producing 110 million cubic feet of gas per day and 1,000 barrels of condensate per day.

Earlier, Energi Mega Persada?s president Rennier Latief said the firm would increase gas production at the Pagerungan field to between 150 and 200 MMCFD in 2005. The output will be further raised to 300 MMCFD by the year 2008 to meet the rise in the demand.

The Kangean block is considered as the most precious jewel in Energi Mega Persada?s assets given its huge gas deposits and the continued rising demand of gas in East Java. Aside from the Kangean block, the firm also partly own and operates the Malacca Strait PSC in central Sumatra and the Brantas PSC in East Java. (Alex)