BP Migas recommends Chevron contract extension in East Ambalat

Amid the ongoing border dispute with Malaysia, Indonesia's upstream oil and gas regulator BP Migas is recommending an extension of Chevron's contract in the East Ambalat oil block.

"The contract extension is actually under the authority of the government. But, BP Migas will recommend the government extend the contract in the East Ambalat block because the area is very strategic for our country," BP Migas' chairman R. Priyono told reporters Monday.

Indonesia awarded the exploration rights in the East Ambalat block to the US oil giant, Chevron Corp. The contract will expire in 2010.

Both Malaysia and Indonesia claim to have rights over the East Ambalat block.

The two countries are also in dispute over the Ambalat block, exploration rights for which Indonesia has given to Italy's Eni SpA.

Both Chevron and Eni are now conducting seismic surveys in the two blocks.