Papua New Guinea government ponders review of Papua LNG gas deal
The government of Papua New Guinea may withdraw the gas deal it forged with the Total SA-led joint venture for the Papua LNG (Elk-Antelope field) development in April and seek a renegotiation if a review of the agreement finds it unfavorable.
The government of Papua New Guinea may withdraw the gas deal it forged with the Total SA-led joint venture for the Papua LNG (Elk-Antelope field) development in April and seek a renegotiation if a review of the agreement finds it unfavorable (OGJ Online, Apr. 15, 2019).
Petroleum Minister Kerenga Kua, who was appointed to the portfolio in June by newly elected Prime Minister James Marape, said this week that he wanted to increase the government’s share of the revenue from the proposed project.
Kua added that the Marape government was in the throes of a reexamination of the Papua LNG agreement that was originally agreed and signed by former PM Peter O’Neill who was outed in a parliamentary vote in May after serving for 8 years.
Kua said the new government was revisiting the agreement because it was signed at a time when the country was in the process of changing the government. He said the new approach was commercial in nature.
The review, which began soon after Marape took office, is expected to run for several more weeks and look at whether the deal with the Papua LNG joint venture partners—Total, ExxonMobil Corp., and Oil Search Ltd.—complies with national laws and whether the terms are acceptable.
At the time, Marape said he would honor existing contracts, but that his government wanted to increase its income from oil and gas projects. Many of his supporters are keen to renegotiate the fiscal terms of the proposed $14-billion expansion of LNG in the country.
Currently in Sydney as part of an Australian tour, Marape has indicated there will be a new chapter in Papua New Guinea’s development.
He said to achieve full economic independence, the government must change its mindset and those of investors and work to ensure a fair allocation of the country’s economic resources.