June 11, 2020 / 7:31 AM / in a month

Papua New Guinea amends oil, gas, mining laws to boost revenue

MELBOURNE, June 11 (Reuters) - Papua New Guinea has passed legislation seeking to boost benefits to the country from oil, gas and mine developments, which could impact talks on stalled projects planned by Exxon Mobil Corp and Newcrest Mining .

The amended laws reflect a push by Prime Minister James Marape, who came to power a year ago on a platform to lift the country out of poverty by getting a bigger share of wealth from the country’s energy and minerals.

The country would not break legitimate exploration or development contracts or agreements, Marape said in a posting on his Facebook page after the legislation was passed on Wednesday.

“I can assure our investors that we know they must make money for their shareholders too, so we will not be greedy, but we (are) just asking for a fair share, if they want to harvest our resources,” Marape wrote.

The government also plans to put in place a production sharing regime to take effect from 2025, he said.

Marape’s push for more benefits for PNG has held up talks on Exxon’s P’nyang gas development, key to a $13 billion plan to double the country’s liquefied natural gas (LNG) exports, and talks with Newcrest to develop its Wafi Golpu gold project.

Credit Suisse analyst Saul Kavonic said the amended law could pose challenges for the LNG expansion.

“The move may signal the PNG government’s resolve to maintain a tough approach to fiscal terms negotiations,” Kavonic said in a note.

Spokesmen for Exxon in PNG and Newcrest were not immediately available to comment.

Exxon’s partner in PNG, Oil Search, said it assumed the legislation was designed to clarify the government’s intentions.

“We remain confident that the PNG government is fully supportive of LNG expansion and the oil and gas industry as a whole,” an Oil Search spokesman said.

The delays on multibillion dollar investments come as PNG struggles with a huge budget deficit which led it to seek a $364 million emergency loan from the International Monetary Fund, obtained this week.

$1 = 1.4426 Australian dollars Reporting by Sonali Paul; editing by David Evans

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