BP Migas chief Rachmat Sudibyo has announced that the local subsidiary of BP Plc will be issued a regulation at the end of this year to extend its oil and gas contracts.
BP Indonesia had recently applied for the extension of its PSC in Kangean Block, which includes Terang Sirasun block that would have expired by 13 November 2010. It also made a point that it would only make investment and production in the Terang Sirasun block if it got its contract extension.
Sudibyo confirmed that the company would get what it asked for when he said, "The regulation will regulate the extension of various contracts. Thus, the contract of Terang Sirasun can be extended early next year."
He also added that the increase in gas production – as a result of the contract extension – "would be crucial to help meet the growing demand in East Java province."
Gas demand in East Java is currently at around 424 million standard cubic feet per day (MMSCFD) but the supply from East Java gas producers has now declined sharply to 290 MMSCFD from a previous high of 390 MMSCFD. Demand for gas in the region is expected to 600 MMSCFD by 2007.
