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June 21, 2022

BP signs production sharing contracts for Indonesian offshore blocks

The 30-year contracts have been signed for the Agung l and Agung ll deep water exploration blocks.

British oil and gas giant BP has signed production sharing contracts (PSCs) with the Indonesian government for two offshore oil and gas exploration blocks.

The 30-year PSCs have been signed for the Agung I and Agung II deep water exploration blocks, which were included in the second round of the 2021 Oil and Gas Working Area (WK) Bid Round.

The government offered a total of eight oil and gas work areas in the bid round.

BP Asia Pacific regional president Nader Zaki said: “Our presence in Indonesia is now extended from the east in Papua Barat through our Tangguh LNG, the largest producing gas field in Indonesia where we are also progressing one of our major CCUS projects, to the west in Aceh through our partnership in Andaman II, and now is complemented by adding Agung I and Agung II in East Java.”

Covering an area of 7,970km² , the Agung II Block is located offshore of South Sulawesi, West Nusa Tenggara, and East Java.

The Agung I block is spread over an area of 6,656km² offshore Bali and East Java.

BP Gas and Low Carbon Energy executive vice-president Anja-Isabel Dotzenrath said: “BP is very proud of being a strategic energy partner of Indonesia as one of the largest foreign direct investors in [the] country.”

Dotzenrath said the firm is committed to growing its gas and low carbon business in Indonesia.

In Indonesia, BP operates the Tangguh liquefied natural gas (LNG) field in Papua Barat. Said to be the country’s largest gas producing field, Tangguh currently accounts for 20% of the national gas production.

Following completion of the expansion project, the field is expected to increase its contribution to national gas production to over 30%.

The firm also holds a 30% interest in Andaman II PSC, an offshore Deepwater exploration block in Aceh.

Earlier this month, BP announced that it is planning to sell its 50% stake in the Sunrise oil sands project in northern Alberta, Canada, to Cenovus Energy.

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