Exxon defends economic impact of PNG gas project

The operator of Papua New Guinea's LNG gas project says it's committed to bringing economic benefits to the country.

This comes after a new report said ExxonMobil's project has had mostly negative economic impacts for the country since LNG exports began in 2014.

The new report by social justice NGO Jubilee Australia said the US$19 billion project has failed to create jobs and spinoffs for PNG's economy despite big promises by political backers.

However, Exxon said the project had contributed around $US4.3 billion to local businesses and the government through employment taxes, disbursements to state shareholder agencies, development levies, royalties, and petroleum license fees.

Of this, it said more than $US1 billion has been spent with landowner companies.

Jubilee's report said most landowners in the project area still hadn't been paid royalties or promised benefits.

But Exxon said royalty payments due to the government had been ongoing since the start of production in 2014.

"Payment and distribution of royalties and other benefits due to landowners in the Project area is the responsibility of the PNG government," according to a statement from ExxonMobil PNG Limited.

It said government distribution of royalties and benefits to LNG plant-area landowners began in 2017, and was based upon benefits sharing agreements previously executed between the government and Project area landowners.

"Payment of royalties and other benefits due to landowners in Hela Province and other upstream areas will commence as the government completes the additional landowner identification process that it commenced in the fourth quarter of 2017.

"Benefits claims previously filed by certain landowners in the courts have only recently been resolved."

The report's co-author, economist Paul Flanagan, said the people of PNG would have been better off had the project not happened at all.

However, PNG's prime minister Peter O'Neill told the PNG-Australia Business Forum annual meeting in Brisbane today that the report was "utter nonsense".

He said it was unrealistic to suggest the LNG project was not contributing to the economy of the country.

According to Exxon, nearly 2600 employees and contractors are engaged in PNG LNG production operations, around 82 percent of whom are Papua New Guinean and 22 percent are women.

"We maintain a social investment program that collaborates with government, donor and civil society priorities around education, community health, and broader socio-economic development," Exxon said.

"In local communities, we have invested more than 800 million PGK (246 million USD) to build infrastructure, develop social programs, and implement skills training. Our efforts have a tangible and direct impact on the community."

The project last week published its latest PNG LNG Environmental & Social Report which it said showed the measures that it was taking to contribute to supporting community livelihoods.