Bakrie firm awarded extension for oil block<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
PT Energy Mega Persada (EMP), a local oil and gas firm controlled
\nby the Bakrie Group, will be awarded a contract extension of 20
\nyears to develop giant Kangean oil and gas block in East Java,
\naccording to government officials.<\/p>\n
Iin Arifin Takhyan from the directorate general for oil and
\ngas at the energy ministry, said the government and the EMP were
\nfinalizing the negotiations, with the signing of the new contract
\nexpected to take place on Dec. 12.<\/p>\n
\"We're still finalizing the details, but we expect to complete
\nit before Dec. 12, when we hope to sign the new contract, which
\nwill extend EMP's rights to develop the Kangean block for another
\n20 years,\" Iin told The Jakarta Post on Thursday.<\/p>\n
The block was previously operated by Anglo-American energy
\ngiant BP Plc., which sold the block to EMP in July this year.
\nSince the acquisition, EMP has been lobbying for an extension of
\nthe current contract, which expires in 2010.<\/p>\n
Efforts to seek confirmation from the firm were unsuccessful.<\/p>\n
There have been three major gas fields discovered within the
\nblock, that is Pagerungan, Terang Sirasun and Batur.<\/p>\n
To date, only Pagerungan has actually produced gas. Data from
\nthe Oil and Gas Upstream Regulatory Body (BP Migas) shows that
\nPagerungan field can produce between 150 million and 175 million
\nstandard cubic feet per day (MMSCFD) of gas.<\/p>\n
A contract extension would allow EMP to explore and develop
\nthe Terang Sirasun field, which is believed to have abundant gas
\ndeposits.<\/p>\n
In total, the Kangean block has reserves estimated to be 2.6
\ntrillion cubic feet of gas, including about 1.3 trillion cubic
\nfeet of certified (proven) reserves.<\/p>\n
With such an amount, Kangean is expected to generate billions
\nof dollars in income for EMP, which bought the block from BP for
\nonly about US$160 million.<\/p>\n
By comparison, in August this year, U.S. energy firm
\nConocoPhillips signed a contract to sell a total of 2.3 trillion
\ncubic feet of gas from its fields in central Sumatra to
\nPerusahaan Gas Negara (PGN), the state gas distribution company,
\nfor a reported price of US$4.3 billion. The gas will be delivered
\nto West Java and Banten.<\/p>\n
Elsewhere, the ministry's Director for Oil and Gas Novian M.
\nThaib, also confirmed that the negotiations were nearing
\ncompletion.<\/p>\n
\"Basically what we're trying to seek in the negotiations is
\nthe company's commitments on using the natural gas it produces to
\nboost the supply and meet the increasing gas demand in the
\nprovince,\" said Novian.<\/p>\n
Based on BP Migas data, natural gas demand in East Java for
\npower plants, gas distribution firm PT Perusahaan Gas Negara
\n(PGN) and petrochemical companies reached 424 MMSCFD in 2002.<\/p>\n
It is projected to increase to 573 MMSCFD by 2007.<\/p>\n
EMP is controlled by the Bakrie Group, a business conglomerate
\nrun by the Bakrie family. The current Coordinating Minister for
\nthe Economy Aburizal Bakrie was a former top executive in the
\nfamily firm.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bakrie-firm-awarded-extension-for-oil-block-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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