Papua New Guinea PM says wants better deal on next ExxonMobil gas project

Record ID: 75905

  • Title: Papua New Guinea PM says wants better deal on next ExxonMobil gas project
  • Date: 5th December 2016
  • Summary: SYDNEY, AUSTRALIA (DECEMBER 5, 2016) (REUTERS) SPEAKER TALKING TO GUESTS AT CONFERENCE PAPUA NEW GUINEA PRIME MINISTER, PETER O'NEILL SITTING AT TABLE PERSON FILMING WOMAN LISTENING (SOUNDBITE) (English) PAPUA NEW GUINEA PRIME MINISTER, PETER O'NEILL, SAYING: "We will be asking for even more domestic market obligations, local content in terms of the benefits that go to our people from developing this project. So, we are going to be fair, it is not something that we think that we necessarily will increase the cost of developing that project and the current global price in commodity prices, we need to ensure that it is competitive." O'NEILL AND REUTERS JOURNALIST JIM REAGAN CHATTING (SOUNDBITE) (English) PAPUA NEW GUINEA PRIME MINISTER, PETER O'NEILL, SAYING: "It is because the first LNG project was a foundation project, so we gave them very generous fiscal terms when we developed and agreed to this project. Now that it is up and running, it is one of the most cost- effective projects globally," he said. "It is still making good returns while commodity prices are depressed, as we see it." O'NEILL AT CONFERENCE TABLE PERSON READING SPEAKER TALKING TO GUESTS AT CONFERENCE
  • Embargoed: 20th December 2016 07:33
  • Keywords: prime minister Peter O'neill ExxonMobil gas investment
  • Location: SYDNEY, AUSTRALIA
  • City: SYDNEY, AUSTRALIA
  • Country: Australia
  • Reuters ID: LVA0015BLWL8T
  • Aspect Ratio: 16:9
  • Story Text:Papua New Guinea will seek greater economic and social benefits from a proposed $10 billion gas investment by ExxonMobil, the country's biggest foreign investor, while ensuring the project stays competitive, Prime Minister Peter O'Neill told Reuters on Monday (December 5).
    "We will be asking for more domestic market obligations, local content in terms of the benefits that go to our people from developing this project," O'Neill said in an interview. "So, we are going to be fair, it is not something that we think that we necessarily will increase the cost of developing that project and the current global price in commodity prices, we need to ensure that it is competitive."
    O'Neill is in Sydney to attend a conference aimed at attracting investment to the resource-rich Pacific nation to Australia's north.
    Papua New Guinea has been hit hard by a slump in commodity prices in the two years since ExxonMobil and foreign minority partners completed a $19 billion liquefied natural gas (LNG) investment. The oil giant is now considering an expansion the government says will cost a further $10 billion.
    "The first LNG project was a foundation project, so we gave them very generous fiscal terms when we agreed to this project," said O'Neill, who is standing for re-election in 2017.
    "Now that it is up and running, it is one of the most cost- effective projects globally," he said. "It is still making good returns while commodity prices are depressed, as we see it," he said.
    With dwindling revenue from mining, the government had been counting on LNG - where the contract prices are tied to oil - to return its budget to surplus by 2020. Yet with a slump in oil prices, it now expects deficits to persist for at least another five years.
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