Pertamina renews calls for govt not to extend BP?s contract on Kangean block

The state-owned oil and gas company Pertamina renewed on Tuesday its demand for the government not to extend BP?s contract in managing the Kangean oil and gas block in East Java.

?The extension of the contract gives no benefit (to the country),? Pertamina president Baihaki Hakim told reporters during a fast-breaking gathering.

He stressed that the government should instead transfer the contract to Pertamina because the company has the ability to manage the oil and gas block.

Energy giant BP has requested the government to extend the Kangean block production sharing contract (PSC) for another 20 years when it expires in 2010 to allow the company to develop the Terang Sirasun gas field located on the Kangean block. The development of the gas field is crucial to allow BP to supply enough gas to the East Java province as reserves from the nearby Pagerungan field (also located in Kangean block) is depleting.

BP has the preferential rights to supply gas in East Java, which has been suffering a shortage of gas supply due to the reserves depletion in the Pagerungan field.

The government will decide on whether to approve BP?s request for the extension of the contract based on recommendations from the House of Representations, expected to be made later this month.

But Pertamina has strongly opposed BP?s plan. (Godang)