Papua New Guinea Prime Minister offers olive branch to oil majors

2 minute read

Signage is seen at an Exxon gas station in Brooklyn, New York City, U.S., November 23, 2021. REUTERS/Andrew Kelly

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MELBOURNE, Dec 1 (Reuters) - After more than two years pressing for a bigger slice of benefits from gas projects in Papua New Guinea and delaying new developments, Prime Minister James Marape on Wednesday said he expects the country to remain a major LNG exporter for decades.

Marape's government earlier this year resumed talks with Exxon Mobil Corp (XOM.N) on a deal to develop the P'nyang gas field after negotiations fell apart in late 2019 when the U.S. giant refused to agree to terms the government was seeking.

On Wednesday he struck a conciliatory note, highlighting how dependent the PNG economy was on mining and petroleum, which together make up most of its exports, and promised investment certainty in a country.

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"Papua New Guinea is not a place to fear as far as your investment dollar is concerned," Marape told the PNG Mining and Investment Conference, speaking from Port Moresby.

"We are open for business today, as we have been open for business the last 46 years."

The P'nyang field is slated to feed Exxon's PNG LNG plant after its current gas sources run down.

Exxon's PNG Managing Director Peter Larden said the company remained committed to reaching an agreement with the government to develop the field, but gave no timeframe for sealing a deal.

He commended Marape and other senior government officials "for taking a number of positive steps to align with stakeholders on this important development".

Marape said Exxon and TotalEnergies (TTEF.PA), which is developing the Papua LNG project, would be in the country for the next 20 or 30 years.

Larden said the P'nyang project and the Papua LNG project, in which it is a partner with TotalEnergies and Oil Search (OSH.AX), could invest more than $18 billion in the Pacific island nation over a decade.

"Our development plan phases P'nyang after the Papua LNG project, which could result in nearly a decade of continuous construction activity ... and potentially more than 65 billion kina invested in that timeframe," Larden told the same conference.

The Papua LNG project will involve producing gas from the Elk and Antelope fields to feed two new gas chilling units, called trains, at the PNG LNG site.

TotalEnergies' PNG head Jean-Marc Noiray said the project aims to reach a final investment decision in the fourth quarter of 2023, and ship its first LNG cargo in the final quarter of 2027.

($1=3.6036 kinas)

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Reporting by Sonali Paul; Editing by Clarence Fernandez and Lincoln Feast.

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