Senior legislator urges govt to decide on BP's Kangean Block contract

A senior legislator has urged the government to soon decide whether to extend by 20 years the current contract of BP Indonesia in the offshore Kangean Block in East Java in order to secure natural gas supply in the province.

?But the government needs to conduct thorough economic analysis before making any decision. The House could give it political support,? Agusman Effendi, vice chairman of Commission VIII of the House Representatives (DPR) in charge of energy and mineral resources, told reporters on Saturday in Surabaya, the capital of East Java province.

Agusman said several oil and gas companies were willing to sign contracts to supply gas to East Java which this year had faced acute gas shortage after BP Indonesia?s gas supply from the Kangean Block dropped due to gas reserve depletion. Agusman did not mention the names of the companies, but earlier reports said they included PT Lapindo Brantas and South Korea?s Kodeco Energy Company.

BP Indonesia, the local unit of BP PLC, is seeking extension of its production sharing contract for the offshore Kangean Block by a further 20 years to allow exploration and development of another gas field there. The current contract will expire in 2010.

BP had been given the exclusive right to supply gas to electricity plants and industrial users in East Java.

Agusman said on Saturday at least 11 companies in East Java urgently needed clarification from the government about future gas supply for them. (godang)