ExxonMobil and the government-appointed State Negotiating Team have until the end of January to negotiate an agreement for the P’nyang gas project, says Minister for Petroleum.

Minister for Petroleum, Kerenga Kua. Credit: BAI

The deadline for negotiations between the National Government and ExxonMobil over the P’nyang gas project is 31 January, according to Kerenga Kua, the Minister for Petroleum. He made clear that the state, rather than provinces, will be in charge of the negotiations.

‘I want to assure you all that the process of negotiation is under control and on track,’ Kua said in a press conference yesterday. ‘The agreed deadline to agree or disagree and walk away still remains January 31.

‘The Prime Minister, at the end of December last year, directed me. He said: “You may be too far up there [asking for too much]. So, you have to come down. Try to see if you can encourage a deal to be made.

‘At the same time he turned around to ExxonMobil and he said: “You also have to demonstrate good will. As I am coming down on behalf of the state, you also need to come up. Why don’t we see if the state and Exxon can meet in the middle in some way?”.’

Negotiations for better terms on the deal began in November last year and it was hoped they would be concluded by the end of that month, but the talks soon stalled.

Kua said the state negotiators have found a ‘new lower level on which the state will accept a deal.’ He added that the ‘state has a continued interest to see the project come out of the ground based on equitable terms and conditions between the state and the developer.’

The Chief Secretary Isaac Lupari is Chairman of the State Negotiating Team (SNT). Negotiations have been rescheduled.

State stamps its authority

P’nyang project site. Credit: Santos

Kua pointed out that negotiations on how to split the state benefits share between the state, provincial governments, local level governments (LLGs), and land owners (LOs) will only take place after a gas agreement, if any, has been signed.

‘By constitutional law, all minerals and petroleum in PNG are owned by the state and not by provinces, or districts, or LLGs, or LOs,’ a statement from Kua said. ‘Only the state is empowered to commercialise these resources, and here again no other entity is, by law, empowered to do this.’

Kua’s statement was in response to criticism from Toboi Awi Yoto, the Governor Western Province, who claimed the SNT has ‘completely turned a blind eye’ to the province’s terms.

‘The SNT is supposed to provide the leadership, direction and ensure our interest are promoted and included at all cost, they continue to undermine, suppress and dilute the province’s position while ExxonMobil has given where they can give as part of a negotiating process,’ Yoto said.

Kua responded by saying that ‘leaders at all levels are entitled to express their views on issues related to resource project negotiations.’

But he said that ‘at the end of the day the state, through the Prime Minister and the National Executive Council, will make the appropriate calls – assisted by myself and my department.’