Govt extends Kangean block contract for 20 years

The government has formally extended the production sharing contract for Kangean block offshore East Java held by PT Energi Mega Persada (EMP) for another 20 years, an official said Sunday.

Director for exploration and production at the Ministry of Energy and Mineral Resources Novian Thaib said that under the extended contract, EMP had agreed to give up a 2.5 percent of its share split for oil and gas produced from the contract area to the government.

Under the new contract, the share split is 72.5-27.5 percent for gas, with the largest portion going to the government and the remainder to the contractor, Novian said.

Novian added the agreement included a commitment to undertaking a new exploration program.

Earlier EMP said that 2005 gross production from the Kangean is forecasted at 57,000 barrels of oil equivalent per day (boepd), compared to 30,000 boepd this year. The increase will be mainly coming from additional gas production of 150 million cubic feet of gas (mmcfd) from Pagerungan gas field, pushing overall gas production to 260 mmcfd. Meanwhile liquids production is also forecasted to increase from 11,000 bpd this year to a little below 14,000. (alex)