BP Plans to Acquire More Oil, Gas Blocks in Indonesia

BP plans to acquire more oil and gas blocks in Indonesia.

UK major’s Indonesia unit head Dharmawan Syamsu said the company is conducting a study to determine which oil and gas block has the most potential to be developed, Katadata, a local news outlet, reported on Friday.

One of the blocks BP is looking at is located in Indonesia’s central and eastern region.

“It’s an offshore (block) located in the eastern region and central to eastern region (of Indonesia),” he told Katada.

Earlier this week, BP and Indonesian regulator SKKMigas signed a loan agreement worth $3.74 billion with a consortium of international and local banks to fund the expansion of BP’s Tangguh LNG plant in West Papua.

In July, BP and its partners approved the final investment decision (FDI) pertaining to expansion of Tangguh LNG project. The expansion project will add a third LNG process train (Train 3) and 3.8 million tonne per annum (mtpa) of production capacity to the existing facility, bringing total plant capacity to 11.4 mtpa. The project also includes two offshore platforms, 13 new production wells, an expanded LNG loading facility, and supporting infrastructure, BP said. Sources said that with falling costs in the industry the project was now put at the lower end of the $8bn-$10bn range.

BP said about 75 percent of the Train 3 annual LNG production has been sold to the Indonesian state electricity company PT. PLN (Persero). The remaining volumes are under contract to Kansai Electric Power Company in Japan, the other foundation buyer for Train 3.

Awards for the project’s key engineering, procurement and construction (EPC) contracts are expected in the third quarter of 2016 with construction to begin thereafter. Operation is expected in 2020.