BP offers compensation for region in Tangguh LNG project

Global energy giant BP, the operator of the Tangguh liquefied natural gas project in Papua, has offered an annual compensation for the local administration, the Koran Tempo daily reported on Tuesday.

The paper said that the proposed compensation was to ensure that the local region could obtain revenue from the LNG project during the early period of operation as BP had requested for a special treatment from the central government, which basically would delay the central government's revenue obtained through the first tranche petroleum (FTP) mechanism. This revenue is supposed to be also distributed to the region.

"They (BP) has offered the region a certain amount of funds to be paid annually," said Director General of Oil and Gas Iin Arifin Takhyan.

He declined to disclose the amount of funds, saying that negotiation between the central government and BP was still going on. "The central government has not yet approved their proposal."(*)