Purnomo: Govt not to meddle in BG's Tangguh LNG stake deal

The government will not meddle in UK-based BG Group?s deal to sell its stake in Muturi Production Sharing Contract (PSC) in Papua to Japan?s Mitsui & Co. and expects that all parties involved in the deal will negotiate based on business principles, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Wednesday.

?It should be a business to business deal. The government will only await reports on the results of their negotiations,? the minister told reporters.

China?s third largest oil and gas firm, CNOOC Ltd, which also holds a stake in Muturi PSC, confirmed Tuesday that it had intended to block BG?s plan to sell its stake in the concession to Mitsui. Last month, BG announced it had agreed to sell its 50 percent stake in the Muturi PSC to Mitsui for US$235 million in cash.

Other than BG, the current participants in the PSC are CNOOC Muturi Limited with 44 percent, BP Muturi Holdings B.V. with 1 percent, and Indonesia Natural Gas Resources Muturi Inc (LNG Japan) with 5 percent.

CNOOC said it had told BG that it would use its pre-emptive right and that the details on raising its holdings in the block were under discussions.

BG's interest in the Muturi PSC provides it with a 10.73 percent interest in the Tangguh LNG project, based on independently certified proved reserves.

CNOOC bought its stake in Tangguh in 2002 for $270 million along with a 2.6 million ton-per-year supply deal to feed an LNG terminal in Fujian in Southeast China from 2007. (godang)