BP in Papua: A chance for development or the return of the resource curse?

Abstract

This study focuses on explaining the absence of violent conflict, a symptom associated with the „resource curse‟, in resource extraction projects in volatile and resource dependent regions. An institutionalist approach is adopted in proposing that the agency of the resource extraction corporation is crucial in suppressing resource curse symptoms. This is illustrated in the case study of BP‟s Tangguh LNG Project in the separatist region of Papua, Indonesia. BP‟s undertaking of organisational learning, the evolution of institutions that influence company policies, and the governance role that BP has assumed in the region, are nominated as factors preventing the appearance of the resource curse in this case. The study concludes that by taking a greater institutional role in the region, BP has been instrumental in suppressing the resource curse, but that the threat of violent conflict will always linger in such precarious zones.