Lost Fortune at Tangguh Block
Several months before the Upstream Oil and Natural Gas regulatory Agency (BP Migas) was disbanded, the sale of gas from the Tangguh Block on the spot market had been experiencing delays. Tension erupted when Raden Priyono, the Head of BP Migas, cancelled the outcome of a tender for the sale of four gas shipments last May. This was despite the fact that the sale of the gas from Bintuni Bay, West Papua, was in compliance with bidding procedures approved by BP Migas.Claiming he took the action to protect domestic supply, Priyono requested a repeat tender be conducted, this time adding two new clauses. However, certain parties maintain the new clauses were slipped in to favor one trader as bid winner.Priyono,s stance on the two clauses softened after a few months, but the time to sell the Tangguh Block LNG had passed. BP Migas missed the opportunity make substantial earnings on the deal. As a result, state revenues lost out at a total of US$47.82 million, or around Rp430.38 billion.
December 4, 2012
It was unusual for such correspondence to use the Tangguh LNG letterhead. Dated May 22, 2012, a letter written in Indonesian and English was addressed to M.I. Zikrullah, Head of the Oil and Gas Utilization Division of the Upstream Oil and Natural Gas Regulatory Agency (BP Migas). Its contents: the regrets and disappointment of Tangguh LNG because Head of BP Migas Raden Priyono had cancelled the outcome of the tender for the spot sale of four ship
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