BP sells subsidiary

BP has announced that it has agreed the sale of BP West Java Limited, its wholly owned subsidiary, to Indonesian state-owned oil-and-gas company PT Pertamina (Persero).

BP has announced that it has agreed the sale of BP West Java Limited (BPWJ), its wholly owned subsidiary, to Indonesian state-owned oil-and-gas company PT Pertamina (Persero).

BPWJ holds a 46 per cent interest in and is the operator of the Offshore North West Java production sharing contract (ONWJ PSC) in Indonesia.

Pertamina will purchase 100 per cent of BPWJ from BP for a consideration of $280m (£170m), subject to final adjustments prior to closing. The two companies anticipate completing the transaction by 30 June 2009 and Pertamina will take over operations 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.’

The ONWJ concession covers an area of 8,300km2. Facilities include 314 producing wells and 218 offshore structures, of which 11 are permanently manned flow stations for processing and compression, and 375 pipelines covering 1,250km 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.