BP Tangguh agrees on Government Act in LNG contract

BP Tangguh as the contractor of the Tangguh LNG project in Papua has finally agreed with the government on the content of the Government Act mentioned in the Principal of Agreement (POA) for the development of the LNG project, Investor Daily reported on Saturday.

The agreement has effectively removed the latest hurdle in the signing of the POA agreement. BP's disagreement over the content of the Government Act has caused the delay in the commencement of the LNG project.

Lukman Mahfoedz, the vice president of BP Tangguh, said in Jakarta on Friday that all the hurdles related to Government Act had been removed and that BP had fulfilled all the request made by the government.

"We hope the final agreement could be made next Tuesday," he added.

The Government Act is part of the Principal of Agreement (POA) that has to be signed by BP Tangguh for the development of the project. The Government Act contains the names of government officials that have to be responsible if there is a government action, or a government policy that might cause the breaching of the contract.

BP Tangguh has demanded the government to include lower level of government officials in the names instead of only President, Minister and Governor as stated in the government Act.

The government turned down the company's demand on the ground that the names of officials such as Director General and regents as required by BP were under the control of Minister and Governor. (*)