Papua New Guinea will progress a gas deal with the French oil giant Total after renegotiation talks.
Kerenga Kua, Papua new Guinea's Minister for Petroleum. Photo: Loop PNG
Petroleum Minister Kerenga Kua visited Singapore last month in the hopes of revising the $US13 billion Papua LNG gas project in Gulf Province. Total is leading the project, with ExxonMobil and Oil Search as partners.
The government called for talks in August hoping to extract concessions from Total, as the new Prime Minister James Marape promised to deliver better economic outcomes soon after his election in May.
But in a statement on Tuesday, Mr Kua said the agreement will go ahead with Total committing only to a handful of non-legally binding changes.
The company will negotiate on allowing third parties to access the pipeline and the government will be able to purchase shares after paying off loans and costs.
Total has also promised to report on how much local equipment and services will be used and to consider jointly buying oil carriers with the state.
"Most of these are substantial new concessions on potential future benefits not previously available to the country under the signed agreement," Mr Kua said in the statement.
He added that the review of the LNG project "has demonstrated that the current concession based licencing system has failed Papua New Guinea in both the mining and petroleum industries."
Mr Kua said PNG's National Executive Council had asked himself and Mining Minister Johnson Tuke to rewrite laws so future deals would be signed under production sharing arrangements (PSAs).
"It is envisaged that a PSA will relieve the State of expensive loans and create early free cashflows in all future mining and petroleum projects," Mr Kua said.