The Minister for Petroleum and Energy in Papua New Guinea, Kerenga Kua, has accused Exxon Mobil of seeking to exploit his country's economic frailty, following the collapse of talks over the development of the P'nyang gas field in Western Province.

Papua New Guinea Petroleum Minister accuses Exxon of trying to exploit country's economic weakness

By Richard Ewart on Pacific Beat | www.abc.net.au. The Minister for Petroleum and Energy in Papua New Guinea, Kerenga Kua, has accused Exxon Mobil of seeking to exploit his country's economic frailty, following the collapse of talks over the development of the P'nyang gas field in Western Province. Mr Kua says the state has pulled out of the negotiations, but the multinational oil and gas corporation could yet be granted a third petroleum development licence by the Petroleum Advisory Board. And if the independent body opts to grant Exxon's application, then Mr Kua says the government could be compelled to reach a deal, but as things stand, unless Exxon comes back with a proposal that meets PNG's expectations, there will be no agreement. At the heart of the impasse is Mr Kua's claim that Exxon was offering a deal that offered a rate of return which would be unacceptable in other countries where the energy giant has signed agreements. But the outgoing managing director of Exxon partner Oil Search, Peter Botten, says the terms the PNG government were seeking would've made the project "uninvestable and unbankable." "In reality, a single digit rate of return on a project like this is not something that we would necessarily see as attractive," said Mr Botten. But Mr Kua says the entirety of the negotiations has been a farce. "There was no chance of an agreement ever being reached anyway. Parties need to make sure they are coming in prepared to do a deal in good faith," he said. "Exxon came in to exploit our weak economic circumstances. How could we ever have struck a deal with that kind of mind set? It was not possible, and it took three months to prove that, and now we have downed tools." Duration: 5min 48sec Broadcast: Mon 3 Feb 2020, 7:00am Source link: https://www.abc.net.au/radio-australia/programs/pacificbeat/png-petroleum-minister-lashes-exxon/