The Papua New Guinea government and U.S. oil major Exxon Mobil Corp. plan to resume talks on the P'nyang natural gas project, nearly two years after their negotiations halted, Exxon confirmed on Aug. 23.
In November 2019, talks tied to a $13 billion expansion of the country's LNG exports fell apart with the government saying Exxon was unwilling to negotiate on the country’s terms.
Papua New Guinea has been pressing for better returns for the impoverished country than it obtained in the original PNG LNG agreement in 2008.
"We look forward to further discussions with the government to align on a gas agreement that ensures fair benefits for project stakeholders and the people of PNG," Exxon said in an emailed comment, declining to elaborate on details of the discussions.
The talks are focused on developing the P'nyang gas field. Exxon and its partners, including Oil Search Ltd., had intended to develop P'nyang to feed a new processing unit, or train, at the two train PNG LNG plant.
However, since the talks collapsed, the thinking has moved toward developing P'nyang further down the track to feed the existing trains as the current gas sources dry up, rather than expanding PNG LNG, Oil Search has previously said.
PNG Minister for Petroleum, Kerenga Kua said on Aug. 23 if all goes well, "we can expect to sign a P'nyang Heads of Agreement around the end of this next month and a Gas Agreement thereafter."
"We look forward to further progress in these negotiations and will support (Exxon) through our 38.51% interest in the joint venture," said Diego Fettweis, Oil Search's executive vice president for commercial.
Its stake in PNG LNG is considered the jewel in the crown for Oil Search, which agreed to an all-stock takeover offer from Santos Ltd. worth about AU$8 billion (US$6 billion) in a deal that would create a top-20 global oil and gas company.
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