Govt won't provide guarantee to BP's Tangguh project

Minister of Energy and Mineral Resources Purnomo Yusgiantoro has emphasized that the government will not give any kind of guarantee to the oil and gas company BP Indonesia, the developer of the Tangguh gas field, the Investor Daily Indonesia newspaper reported in its Wednesday edition.

The government, according to Purnomo, has given the guarantee based on the agreement reached in the production sharing contract.

“There is no government guarantee, and it is not given. And no body has given it (guarantee),” Purnomo said on Tuesday in Jakarta.

Several oil and gas experts and non-governmental organizations have earlier expressed concerns that the government would give guarantee to BP as an incentive to develop gas field at Tangguh. This guarantee will be seen as a shift of investment risk from investor to the government.

According to purnomo, the government has appointed a special team to study the Tangguh project. The study will focuses on three aspects: the signed contract, extension of the contract and Tangguh gas sale and purchase contract.

From the three above aspects, the government has not given any special guarantee to either the investor or gas purchaser.

As far as the signed contract is concerned, Purnomo said, the government has given guarantee that it will honor the terms and conditions of the contract during its effective period. (*)