BP has agreed to the sale of its wholly-owned subsidiary, BP West Java Limited (BPWJ), to Indonesian state-owned oil and gas company PT Pertamina (Persero).
BPWJ holds a 46 percent interest in and is the operator of the Offshore North West Java production sharing contract (ONWJ PSC) in Indonesia.
Pertamina will purchase 100 percent of BPWJ from BP for a consideration of US $280 million, subject to final adjustments prior to closing. The two companies anticipate completing the transaction by June 30, 2009 and Pertamina will take over operatorship of the ONWJ assets. In addition, BP and Pertamina have agreed to co-operate on developing coalbed methane in Indonesia.
Andy Inglis, BP's chief executive of exploration and production said, "Indonesia is an important country for BP, where we are focusing our upstream oil and gas interests on the continuing development of our VICO joint venture in Kalimantan and our Tangguh LNG project in Papua. We are confident that ONWJ will prove a natural fit with Pertamina's existing businesses and they are the right company to take on this excellent asset with first class people. We also look forward to working jointly with Pertamina to evaluate coalbed methane resources on their significant acreage position."
BP and Pertamina have also agreed to deliver the commitments made to the approximately 400 BPWJ employees regarding their employment benefits.
The ONWJ concession covers an area of 8,300 square kilometers immediately offshore West Java stretching from north of Cirebon to the Kepulauan Seribu. Facilities include 314 producing wells and 218 offshore structures, of which eleven are permanently manned flow-stations for processing and compression, and 375 pipelines covering 1,250 kilometers in distance, as well as three onshore gas receiving facilities. ONWJ's current average gross production is approximately 220 million cubic feet of gas and 22,000 barrels of oil per day.
The ONWJ PSC supplies gas for power generation, and industrial, commercial and residential consumption in the greater Jakarta area. BP will work with Pertamina to ensure that customers' supplies are not affected by the transfer of ownership.
The sale will not affect BP's other interests in Indonesia, which remains a core area for BP with the Tangguh, VICO, Castrol and petrochemical businesses. BP is continuously looking for ways of growing these assets and accessing new opportunities through development, exploration and renewal.
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