Papua New Guinea's prime minister has urged two energy companies not to hold a major LNG gas project in his country to ransom.
Papua New Guinea's prime minister James Marape. Photo: PNG PM Media Unit
James Marape's appeal to ExxonMobil and Oil Search follows the failure of negoitiations with the former over the fledgling $US13 billion P'nyang gas project
Oil Search said PNG was demanding terms of Exxon that meant the project developers would not gain a sufficient return on their investment.
But Mr Marape accused Exxon of a "lack of interest" to meet PNG halfway by offering concessions for a better state take from the deal.
The failure of the negotiations has raised doubt over the future of the separate Papua LNG gas project signed with French major Total.
Mr Marape said he called upon the two multi-nationals, as beneficiaries of concessions previous governments have given, to work with Total to deliver Papua LNG.
However, he appeared to leave the door open for an agreement with Exxon over the P'nyang gas project proceeding.
He said in the interests of fairness, a Ministerial Gas Committee would request both the state negotiating team and ExxonMobil to present their positions for the State - through a committee of leaders - to decide what is the best outcome for PNG.
LNG Project site (run by project partner Oil Search) in Nagoli, Hela Province, Papua New Guinea. Photo: RNZI / Johnny Blades
The prime minister said he had indicated on all levels of discussions that fundamental policy principles that influenced his government's mindset would not change.
"These include no fiscal concessions in P'nyang, treating P'nyang as separate from both PNG and Papua LNG projects, increase in Domestic Market Obligations and local content participation," he said.
"These will be fundamental in progressing P'nyang.
"In the meantime, I call upon ExxonMobil and Oil Search not to hold the Total project in Gulf to ransom.
"If you model the project to be uneconomical, then don't push it: let's leave the gas in my land and you develop Papua plus further work in PNG LNG.
"After SNT and ExxonMobil present to the MGC, Cabinet will decide on P'nyang."
Mr Marape said his government would shift focus to Wafi-Golpu and Porgera mines, and other resource sectors so life in PNG was not only dependent on P'nyang and other LNG gas projects.