State budget revision required to allow bigger supply of fuel for E. Java: Legislator

The 2002 state budget must be revised if state oil and gas company Pertamina decides to add fuel supply for East Java to offset the sharp decline in gas supply from BP Kangean?s Pagerungan field, according to a senior member of the House of Representatives (DPR).

?The state budget should be first changed to allow Pertamina to increase fuel supply to East Java,? said Agus Iman Effendi, the vice chairman of Commission VIII of DPR in charge of energy and mineral resources, Suara Karya reported on Wednesday.

Existing laws allow state budget revision, but Agus said Pertamina?s plan to supply more fuel for East Java provides small reason for the government and DPR to revise the budget.

The 2002 state budget stipulates that Pertamina must this year supply 52.7 million kiloliters of fuel for the domestic market.

Pertamina will have to increase the supply volume if it plans to provide East Java with more fuel, Agus said.

Gas supply in East Java is falling due to a decline in gas production from BP?s oil field on the adjacent island of Pagerungan.

BP has seen a depletion of Kangean?s gas reserve, and this had caused Pertamina to consider supplying fuel to East Java. Pertamina also has planned to revoke BP?s preferential right to supply gas to East Java until 2010, and allow other contractors to supply the commodity to the province.

BP Kangean, a unit of British American oil and gas company BP Plc, signed in 1980 a contract with Pertamina to supply 600 million standard cubic feet (mmscfd) per day of gas to East Java. (*)