Doubts about the gas deal intensified in August, when the government suddenly called for discussions on a review of the deal. “We look forward to working with the PNG government to conclude the necessary gas deal for the P`nyang project,” Exxon Mobil said in an email, referring to the second of the two necessary agreements. TOKYO (Reuters) – Papua New Guinea will push Exxon Mobil Corp on “much better” terms for its P`nyang gas project than the government recently agreed with Total SA on its Papuan LNG project, the country`s oil minister said. The downsizing is part of an approximately 34% reduction in Oil Search`s global workforce by the end of the year as part of restructuring and cost reduction. This marks further complications in the project, which has already been delayed due to differences of opinion between the new Papua New Guinea government and project partners. Total and its partners ExxonMobil and Oil Search, based in Papua New Guinea, have signed a gas agreement with the independent state of Papua New Guinea (PNG) that sets the fiscal framework for the Papua New Guinea LNG project, Total announced on Tuesday. The Papua LNG gas deal is one of two agreements that Total and its partners Exxon Mobil Corp and Oil Search Ltd need to advance the LNG expansion plan. Prime Minister Peter O`Neill said Friday in Port Moresby, the capital, that “physical conditions” had been agreed. He said negotiations over how revenues would be distributed across the municipality and provincial governments required more work. “I would say we`re already at about 50 to 60 percent of our understanding of revenue participation,” O`Neill said in response to questions from Reuters. A non-binding memorandum of understanding (MOU) signed on Friday is essentially a commitment by the government to conclude a gas agreement in early 2019 that would lead to the development of Papua LNG operated by Total. The MoU was signed at the Asia Pacific Economic Conference (APEC) in Port Moresby, in the presence of Peter O`Neill, Prime Minister of Papua New Guinea, and Patrick Pouyanné, Chairman and Chief Executive Officer of Total. The envisaged gas agreement is expected to be concluded before Q1 2019.
Total is the operator of the Elk and Antelope onshore fields and, with a 31.1% stake, the main shareholder of PRL-15, with its partners ExxonMobil (28.3%) and Oil Search (17.7%), according to state law of 22.5%. The Papua LNG project will comprise two LNG trains of 2.7 MMtpy each and will be developed in synergy with existing LNG facilities (operated by ExxonMobil). Total and its partners have agreed to launch the first phase of the technical studies for this project. “The Memorandum of Understanding signed by PNG and the Papua LNG project partners is an important step in the commitment of all parties to the project,” said Patrick Pouyanné, Chairman and Chief Executive Officer of Total. “Investing in LNG is a long-term undertaking and our goal is to make the project as competitive as possible. As the second largest private LNG player in the world, we are fully committed to the success of the Papua LNG project, which enjoys a favourable geographical location close to Asian markets. “At the time the political developments have taken place, it really has more than the total value we place on this expansion. Tuesday`s agreement allows the partners to enter the FEED phase of the study that will lead to the final investment decision in 2020. . . .