BP Indonesia clarifies

Allow me here to give some input with regards to the news coverage from The Jakarta Post dated June 9, 2003, titled Gas shortage to exacerbate power woes on Java, on page 1.

In the sixth column of the article, in the last paragraph, it is written that BP has a monopoly right to supply 600 MMSCFD gas to regional customers until 2010. Other companies are not permitted to supply gas to the market unless the gas demand does not exceed more than 600 MMSCFD.

It is true that in our gas supply contract it is stated that Kangean PSC has preferential rights to supply the East Java market if there is available gas reserves and deliverability and the gas price is competitive. If Kangean PSC does not have enough gas then any PSC can supply the market. Or if any PSC can offer a lower price then they can supply the market.

We do not view this preferential right as a monopoly right. In fact, other gas producers (Kodeco and Lapindo Brantas) have been supplying gas to customers in East Java without having to ask BP Kangean Ltd. It is also true that in 2001 we formally agreed to withdraw the preferential rights. The existing gas contract is being revised.

Therefore, we wish that in the future the issue of monopoly or preferential rights not be mentioned if the Post writes about our operations in the Pagerungan gas field, Kangean block, East Java.

SATYA W. YUDHA, Vice President of Government and Public Affairs, BP Indonesia, Jakarta

Note: Thank you for your clarification. --Editor