Papua New Guinea Amends Oil, Gas, Mining Laws to Boost Revenue

Sonali Paul
Thursday, June 11, 2020

Papua New Guinea has passed legislation seeking to boost benefits to the country from oil, gas, and mine developments, which could impact talks on stalled projects planned by Exxon Mobil Corp and Newcrest Mining.

The amended laws reflect a push by Prime Minister James Marape, who came to power a year ago on a platform to lift the country out of poverty by getting a bigger share of wealth from the country's energy and minerals.

The country would not break legitimate exploration or development contracts or agreements, Marape said in a posting on his Facebook page after the legislation was passed on Wednesday.

"I can assure our investors that we know they must make money for their shareholders too, so we will not be greedy, but we (are) just asking for a fair share, if they want to harvest our resources," Marape wrote.

The government also plans to put in place a production sharing regime to take effect from 2025, he said.

Marape's push for more benefits for PNG has held up talks on Exxon's P'nyang gas development, key to a $13 billion plan to double the country's liquefied natural gas (LNG) exports, and talks with Newcrest to develop its Wafi Golpu gold project.

Credit Suisse analyst Saul Kavonic said the amended law could pose challenges for the LNG expansion.

"The move may signal the PNG government's resolve to maintain a tough approach to fiscal terms negotiations," Kavonic said in a note.

Spokesmen for Exxon in PNG and Newcrest were not immediately available to comment.

Exxon's partner in PNG, Oil Search, said it assumed the legislation was designed to clarify the government's intentions.

"We remain confident that the PNG government is fully supportive of LNG expansion and the oil and gas industry as a whole," an Oil Search spokesman said.

The delays on multibillion-dollar investments come as PNG struggles with a huge budget deficit which led it to seek a $364 million emergency loan from the International Monetary Fund, obtained this week.

($1 = 1.4426 Australian dollars) 

(Reporting by Sonali Paul; editing by David Evans)

Categories: Asia Regulations PNG

Related Stories

KBR-SOCAR Joint Venture Secures Work for BP in Azerbaijan

Baker Hughes, Petronas Team Up for Asia-Pacific Energy Resilience

Woodside Finds South Korean Partners to Advance LNG Value Chain

One Shelf Drilling Rig Up for New Job in India, Other for Disposal

PTTEP Hires Velesto’s Jack-Up Rig for Drilling Campaign off Malaysia

Yinson Production Secures $1.17B Refinancing for FPSO Maria Quitéria

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Woodside Agrees Long-Term LNG Supply with Petronas Unit

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

Current News

Pandion Energy Divests Interests in Three Norwegian Assets to Inpex

China Starts Production at Major Oil Field in Bohai Sea

Dutch Contractor Completes Malaysia’s Largest 'Rig-to-Reef' Decom Project

China Rolls Out 17MW Floating Wind Turbine Prototype

SBM Offshore’s Jaguar FPSO Enters Drydock in Singapore (Video)

EnQuest Picks Up Offshore Oil and Gas Block in Brunei

CNOOC Finds Oil and Gas in South China Sea

Seatrium Makes First Turnkey FPSO Delivery to Petrobras

KBR-SOCAR Joint Venture Secures Work for BP in Azerbaijan

Baker Hughes, Petronas Team Up for Asia-Pacific Energy Resilience

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com