Source Pravda.Ru

BP Aiming Boost Production Sharing Contract In East Java Field

BP is hoping that it will be able to extend its production sharing contract for its East Java field. This would allow the company more time for exploration and construction of another gas field.

BP asked the government last year to extend its contract for the offshore Kangean block, which is due to expire in 2010, by a further 20 years or so. "I am optimistic that we will get a good result some time here in the rest of the year on the extension," BP Indonesia President Bill Schrader said. "We are very interested in getting our PSC extended so we can spend the roughly $400 million needed to develop the Terang/Sirasun field," he added.

One of BP's natural gas fields in the Kangean block has been significantly depleted this year so the company wants to develop the nearby Terang/Sirasun field, which it believes has around one trillion cubic feet of gas reserves. "East Java has tremendous gas demand today and this will grow in the future so the PSC extension will allow us to develop this field and help meet those needs for the next 15 years," Schrader said.

BP currently has a contract to supply more than 340 million cubic feet per day of natural gas to electricity customers in East Java. Officials from Pertamina have said the BP gas supply from the Kangean block is currently around 200 million cubic feet per day but this is expected to fall to 160 million cubic feet per day by the end of the year.

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