Govt agrees to extend Kangean block contract<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government has agreed to extend the gas contract in the
\nKangean block, East Java, operated by Anglo-American energy
\ncompany BP Plc in order to help overcome the gas shortage in the
\nprovince.<\/p>\n
Iin Arifin Takhyan, Director General of Oil and Gas at the
\nMinistry of Energy and Mineral Resources said the extension of
\nthe production-sharing contract would be made when the government
\nregulation on oil and gas upstream business had been issued.<\/p>\n
\"In principal, we agree (to extent the contract) because
\ngas shortages in East Java can only be dealt with by extending
\nthe natural gas contract in Terang Sirasun,\" Iin told reporters
\nafter a hearing with the House of Representatives on Wednesday.<\/p>\n
The contract with BP Plc at Kangean block where Terang Sirasun
\nfield will expire in 2010.<\/p>\n
\"The regulation will provide a legal basis for the extension
\nof the existing contract. It will allow investors to extend their
\ncontracts 10 years prior to their expiry,\" Iin explained. In the
\nprevious regulation, investors could only extend their contract
\ntwo years before expiry.<\/p>\n
The draft of the regulation is still at the State Secretariat,
\nand has yet to be signed by President Megawati Soekarnoputri.<\/p>\n
Iin said the extension of the Kangean block contract had been
\nproposed a year ago but there had been suspicions of collusion as
\nthe extension was proposed years before its expiry period.<\/p>\n
The extension of the contract would allow BP Plc. to explore
\nnew natural gas reserves in Terang Sirasun to bring in a greater
\ngas supply for East Java. BP supplies natural gas for the
\nprovince along with other producers.<\/p>\n
Based on data from the Oil and Gas Upstream Regulatory Body
\n(BP Migas), natural gas demand in East Java for power plants, gas
\ndistribution company PT Perusahaan Gas Negara (PGN) and
\npetrochemical companies reached 424 million cubic feet per day
\n(MMSCFD) in 2002. It is projected to increase to 573 MMSCFD in
\n2007.<\/p>\n
However, the ability of natural gas fields around the province
\nhave been steadily declining from 390 MMSCFD in 2002 to 290
\nMMSCFD.<\/p>\n
It is projected that the exploration of new gas reserves in
\nTerang Sirasun will bring an additional natural gas supply of 300
\nMMSCFD.<\/p>\n
East Java gets natural gas from BP's Lapindo Brantas (80 -
\n100 MMSCFD), Pagerungan fields (150-175 MMSCFD), Ujung Pangkah
\noperated by Amerada Hess (100 MMSCFD), Oyong (40 MMSCFD) and
\nMaleo (100 MMSCFD) and Kodeco (100 MMSCDF).<\/p>\n
Ujung Pangkah is scheduled to produce natural gas in 2005 and
\nSantos in 2006.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-agrees-to-extend-kangean-block-contract-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
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