BP asks for contract extension

BP asks for contract extension

JAKARTA: BP Indonesia said Tuesday it would abandon plans to invest US$400 million to develop a gasfield off East Java unless the government agrees to extend its production-sharing contract by 20 years.

The original contract with state-owned energy company Pertamina for the Terang Sirasun field expires in November 2010.

"We are seeking another 20 years on top of that," BP Indonesia president Bill Schrader told AFX-Asia, an AFP-owned financial newswire.

Schrader said the BP Plc board would not approve the $400 million investment without a contract extension because it would not be economically viable.

He said it would take at least three years to develop the field and by 2010 "we would still have half of our reserves sitting in the ground". -- AFP