The BP logo is seen at a BP gas station in Manhattan, New York City, U.S., November 24, 2021. REUTERS/Andrew Kelly/File Photo
The British oil and gas producer announced the investment on Thursday in a meeting with President Prabowo Subianto who is visiting London.
Production at Ubadari field is scheduled to start in 2028 and gas from the site will be processed at the company's existing Tangguh liquefied natural gas facility in West Papua, it said in a statement.
BP added that CO2 recovered from its first carbon capture, utilisation and storage project in Indonesia would be used to boost production at the Tangguh facility.
The project has the "potential for sequestering around 15 million tonnes of CO2 from Tangguh’s emissions in its initial phase," the energy giant said.
Prabowo said British firms have committed to invest $8.5 billion in Indonesia's energy transition, education, infrastructure and health sectors, including the $7 billion BP project.
"This shows their optimism in our economy," Prabowo said in a separate statement on Thursday.
The project is part of the Tangguh Production Sharing Contract operated by BP, which owns 40.2%, on behalf of the other production-sharing contract partners, including China's CNOOC (600938.SS), opens new tab, and Japan's Mitsubishi Corp (8058.T), opens new tab, Inpex Corp (1605.T), opens new tab and Japan Oil, Gas and Metals National Corp.
It was first approved by Indonesia's oil and gas regulator in 2021.
