BP Indonesia plans to acquire more oil and gas blocks in Indonesia. One of the blocks the British company has set its eye on is located in Indonesia’s central and eastern region.
BP Indonesia Country Head Dharmawan Syamsu said his firm’s exploration team is conducting a study to determine which oil and gas block has the most potential to be developed. The study began two years ago.
Dharmawan was unwilling to divulge which oil and gas block BP is interested in acquiring. “It’s an offshore (block) located in the eastern region and central to eastern region (of Indonesia),” he told Katadata at the SKK Migas office on Wednesday (3/8). (Read: SKK Migas Ready to Announce BP’s Interest in Acquiring Kasuri Block)
The Energy and Mineral Resources Ministry is currently offering a few oil and gas blocks by direct offering and regular tender. The direct offering blocks are Bukit Gajah (offshore Riau Islands), Batu Gajah Dua (onshore Jambi), Kasongan Sampit (onshore Central Kalimantan), Ampuh (offshore Java Sea), Ebuny (offshore Southeast Sulawesi), Onin (onshore-offshore West Papua) and West Kaimana (onshore-offshore West Papua).
The blocks currently being offered by regular tender are South CPP (onshore Riau), Suremana I (offshore Makassar Strait), SE Mandar (offshore South Sulawesi - West Sulawesi), North Arguni (onshore West Papua), Kasuri II (onshore West Papua), Manakarra Mamuju (offshore Makassar Strait)and Oti (offshore East Kalimantan). (Read: Government to Auction Off 14 Oil and Gas Blocks Starting June)
BP has already acquired stakes in several major oil and gas blocks in Indonesia’s eastern region, including the Tangguh project. This is a multinational project that involves the development of six gas fields under production-sharing contracts for Wiriagar, Berau and Muturi in the Bintuni Bay, West Papua province.
Gas reserves in these working areas were discovered in the mid-1990s by Atlantic Richfield Co. (ARCO). BP Berau, BP Muturi Holdings, and BP Wiriagar now operate the Tangguh project. All three companies are fully owned by BP, which means that the holding company owns a 37.16 percent stake in the Tangguh project.
Other partners include MI Berau (16.30 percent), CNOOC Muturi (13.90 percent), Nippon Oil Exploration (Berau) (12.23 percent), KG Berau Petroleum (8.56 percent), KG Wiriagar Overseas (1.44 percent), Indonesia Natural Gas Resources Muturi (7.35 percent) and Talisman Wiriagar Overseas (3.06 percent).
Tangguh started producing in 2009, only four years after the project was approved by the government. Tangguh now operates at full installed capacity and work is underway to develop a new LNG refinery or Train 3.
BP has just signed an agreement with several local and international banks and financial institutions to fund the development of this refinery. Out of the total required investment of US$ 8 billion, US$3.7 billion of the funds were obtained through loans. (Read: Tangguh Becomes First LNG Project Funded by Local Banks)
These loan agreements come on the back of the announcement of the final investment decision (FID) made by the Tangguh PSC contractors on 1 July this year. Construction of Train 3 is scheduled to start in October this year.
BP also has a 26.25 percent stake in VICO Indonesia. VICO is a joint venture that operates the Sanga-Sanga Block in East Kalimantan. Its contract for this block will expire in 2018.
BP is also engaged in the petrochemical industry through BP Petrochemicals Indonesia. Early 2014, BP took over control of Mitsui Chemicals (MCI) and Mitsui & Co (MBK) from Amoco Mitsui PTA Indonesia (AMI), a joint venture that produces and sells purified terephthalic acid (PTA).
BP also has an oil lubricant business, Castrol Indonesia. Castrol first entered the Indonesian market in 1970. Then in 1988, Castrol Indonesia was established to handle Castrol’s lubricant market nationwide.
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