BP Seeks 20-Year Extension for Production Sharing Contract in East Java Gas Field
BP is pursuing a 20-year extension of its production sharing contract for the offshore Kangean block in East Java, set to expire in 2010. This extension would facilitate exploration and development of the Terang/Sirasun field, which is estimated to contain one trillion cubic feet of gas reserves.
BP Indonesia President Bill Schrader expressed optimism regarding the contract extension, which would enable an investment of approximately $400 million. Currently, BP supplies over 340 million cubic feet per day of natural gas to East Java electricity customers, but production from the Kangean block is predicted to decline from 200 million cubic feet per day to 160 million by year-end. The PSC extension is seen as crucial to meet the growing gas demand in East Java over the next 15 years.
