BP increases stake in Tangguh gas project

Anglo-American energy giant BP Plc announced Friday that it has acquired Cairns Limited for a lump sum of $107 million and a deferred share of future profits from the Tangguh field.

Cairns, a subsidiary of Genting Berhad of Malaysia, holds a 9.7 percent stake in the Tangguh LNG project.

Bill Schrader, BP Associate President, Indonesia said today, "This is a very good strategic acquisition which will increase BP's share of Tangguh to about 50 percent and reflects our confidence in the development. Tangguh offers a new 'grass roots' project and it will be a long-term competitive supply source which will help meet rising demand in the region. The marketing of Tangguh is going very well and there is great interest in the markets of the Far East, particularly China, Japan and Korea."

Tangguh is a world-class gas field in Indonesia, with proved reserves certified at 14.4 trillion cubic feet. The Tangguh reserves are located on three Production Sharing Contracts (PSCs). BP already held an interest (and is operator) on two of the PSCs and this deal puts BP on the third.

The three Production Sharing Contracts which make up Tangguh are: Wiriagar: BP (operator) 80 percent; KG 20 percent Berau: BP (operator) 48 percent, Oxy 22.856 percent; Nippon 17.144 percent and KG 12 percent Muturi: BG 50 percent, Cairns 45 percent and Nissho Iwai 5 percent

The shares in proved reserves in the Tangguh project, derived from these PSCs are: BP 40 percent, Oxy 16 percent, Nippon 12 percent, BG 11 percent, KG 10 percent, Cairns 10 percent and Nissho Iwai 1 percent. Following this acquisition, BP's interest in Tangguh increases to 50 percent.

The agreement is for Genting to receive an immediate lump sum of $107 million and a future share equivalent to around 3 percent of Tangguh net profit.

Cairns was a subsidiary of Genting Berhad (of Malaysia) which is principally an investment holding and management company and whose subsidiary companies are primarily involved in seven major business divisions, one of which is oil and gas. Genting Berhad was incorporated as a private limited company in 1968 and re-structured in 1989. (*)