Govt needs to impose new requirement in extension of Kangean block contract
Thursday, May 27 2004 - 03:50 AM WIB
"Although according to the (existing) contract BP Indonesia is allowed to sell its interest in the Kangean block which includes the Terang Sirasun field, BPMIGAS opines that the government should impose a requirement that there would be no transfer of operatorship (of the block) until the contract expires," said BPMIGAS chief Rahmat Soedibjo in a written statement distributed during a hearing with the House of Representatives Commission VIII on mining and energy.
"The additional requirement is needed to ensure gas supply or help resolve gas shortage problem in East Java," he added.
BPMIGAS feared that if there is a change in the operator of the Kangean block, the new operator might not be able to fulfill the commitment of the existing operator.
BP Indonesia declines to comment.
BP Indonesia, a subsidiary of British-American BP Plc., has been in talks with several investors to sell part of its interest in the Kangean block, but at the same time is also seeking for an extension of the Kangean block contract, which will expires in 2010.
The extension of the contract would enable the company to explore Terang Sirasun field, which should help resolve gas shortage problem in East Java. The government (The Ministry of Mineral Resources and Energy) has yet to decide on the request.
BP has operated the Kangean block since 1980. First production started in 1994 from the Pagerungan Gas Plant. According to Oil and Gas Upstream Regulatory Body (BP Migas), Pagerungan supplies between 150-175 million standard cubic feet of gas.
BP supplies state electricity firm PT PLN, state gas distribution firm PT PGN and Petrochemical Gresik.(Godang)