No P’nyang Gas Project – Negotiations fail to find compromise
This was the announcement that we were all waiting for; however, the result was far from what we had hoped for. The P?nyang Gas project casts a shadow on what was going to be a $13 billion dollar project, that was going to double the country’s gas exports for 2024. It is extremely unfortunate that both parties couldn’t come to an agreement after all the delays and negotiation talks.
Prime Minister, Hon James Marape, issued a media release on the 31st of January, conveying his disappointment that the negotiations between the State and Exxon Mobil have not been able to come to an agreement.
Marapa articulated that due to Exxon Mobil’s unwillingness to agree to the terms, that are in accordance with other international gas projects, the States Negotiating Team (SNT) simply could not settle.
PNG had extended the negotiation deadline numerous times, with the notion that Exxon Mobil would put forward a more attractive package, after the final proposal was submitted just one day before the deadline, no such compromises were found.
Marape stated ?The gas belongs to PNG’s people. We are willing to allow international oil companies to develop the field and achieve decent returns by exporting most of the gas, but PNG must also benefit. It is hugely disappointing that our negotiation partners will not agree to such terms.?
Marape went on to explain that the deal was simply ?out of the money? for PNG.
The world is currently watching Papua New Guinea and we hope that the failed negotiations will not negatively affect future dealings with the country. PNG have mentioned that they are keen to welcome international investors, yet they cannot seem to come to a mutual agreement.
The unfortunate reality is that the P?nyang Gas Project was to be developed to fill a particular supply gap in the market projected for 2024. With PNG now out of the race, another country will now take advantage of the opportunity, and utilise its resource sector to reap the rewards.
PNG will now be focusing on other projects that are already in the pipeline and will be focusing on these avenues to help develop the country, and improve the quality of life for its people.
PNG continue to say that they are willing to communicate with global partners to seek economic growth, however what message has this latest interaction projected to outside investors?