June 6, 2019 / 8:13 AM / 3 months ago

Oil Search CEO says new PNG leader unlikely to demand big concessions on gas deals

* Oil Search CEO confident on Papua LNG, P’nyang deals

* Comments follow PNG PM vowing to raise revenue from resources

By Jonathan Barrett

SYDNEY, June 6 (Reuters) - The head of Papua New Guinea-focused energy firm Oil Search Ltd said he did not expect to make any significant new concessions on a gas deal it and ExxonMobil Corp hope to strike with the South Pacific nation’s new leader.

Commodity and energy firms with projects in the resource-rich archipelago like Oil Search have been closely watching the agenda of Prime Minister James Marape since his election by parliament last week on a platform of economic reform.

A policy speech Marape made on Wednesday offered investors some relief as he said changes would be slow.

Oil Search managing director Peter Botten told the Sydney Mining Club at a lunchtime address that the P’nyang gas agreement, which has yet to be finalised, would resemble a deal already brokered on the Papua LNG project led by Total .

“I don’t envisage there will be any changes to the Papua LNG gas agreement,” Botten said, meaning the P’nyang agreement would be unlikely to see major change either.

“I am confident about that (but) I’m not 100-percent confident because I need to sit down with the government, as does Total as operator.”

Oil Search has previously said it hopes to agree terms for P’nyang this month.

Marape, a former finance minister, has promised he would be “taking back” the economy and revising resource-sector laws after the resignation of his predecessor, Peter O’Neill.

Marape said on Wednesday that he wanted to increase the amount of revenue flowing from resource projects, after years of underwhelming returns most notably from the gargantuan PNG LNG project, run by Exxon in partnership with Oil Search and others.

But changes would be gradual, Marape said, and unlikely to take effect before 2025.

Papua LNG, operated by Total, plans to develop the Elk and Antelope gas fields to feed two new liquefied natural gas processing units, called trains, at the PNG LNG plant.

Oil Search and Exxon also plan to add a third new train at the plant, partly fed by gas from the P’nyang field. (Reporting by Jonathan Barrett; Additional reporting by Sonali Paul; Writing by Tom Westbrook; Editing by Joseph Radford)

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