BP to sell interest in Kangean block

BP to sell interest in Kangean block

The Jakarta Post, Jakarta

Energy firm BP Indonesia, a subsidiary of British-American BP
Plc., plans to sell some of its interest in Kangean oil and gas
block in East Java.

"BP is planning to reduce its interest in Kangean. Discussion
with Indonesian and international companies are ongoing ," Budi
Susanto, BP's government and public affairs manager for Java told
The Jakarta Post in an e-mail.

Budi did not explain the price BP would sell its interest in
Kangean and the purpose of the divestment.

However, Budi said the company would ensure the supply of
natural gas to its customers in East Java would not be disrupted
by the divestment measure. The company would maintain the
development of the Terang Sirasun field, which is located in the
Kangean block.

"BP has engaged in discussion with parties which share BP's
desire for safe and continuous natural gas supply to East Java as
well as seeing the development of the Terang Sirasun/Batur
field," Budi said.

Budi also declined to reveal the interested investors, saying
the matter was confidential.

BP Indonesia is seeking a contract extension for the
management of the Kangean block which is due to expire in 2010.
Extension of the contract would enable the company to explore
Terang Sirasun field, which should help resolve gas shortage
problem in East Java. The government has yet to decide on the
request.

BP has operated the Kangean block since 1980. First production
started in 1994 from the Pagerungan Gas Plant. According to Oil
and Gas Upstream Regulatory Body (BP Migas), Pagerungan supplies
between 150-175 million standard cubic feet (MMSCFD) of gas.

BP supplies state electricity firm PT PLN, state gas
distribution firm PT PGN and Petrochemical Gresik.