Papua New Guinea plans to launch a production sharing regime from 2025
Papua New Guinea has adopted a new regulation with the objective to boost benefits to the country from oil, gas and mine developments. Existing exploration and development contracts would not be broken but the government will seek to get a larger share of revenues from energy and mineral explorations. The government plans to implement a production sharing regime to take effect from 2025.
Papua New Guinea's new government took office in May 2019, promising better conditions for the state and the citizens of Papua New Guinea, and sought to renegotiate the terms of the contract with Total, the operator of the 5.4 Mt/year (7.3 bcm/year) Papua LNG project. In September 2019, the government allowed the project to proceed in accordance with the gas agreement reached in April 2019 with the previous administration. The Elk and Antelope gas fields would be developed to feed the project. The final investment decision (FID) is expected in 2020 and new trains could be commissioned as early as 2023-2024.
In February 2020, the government of Papua New Guinea terminated negotiations with ExxonMobil and Oil Search over the development of the P'nyang gas field, whose gas resources are estimated at 4.36 tcf (approximately 123 bcm). According to Oil Search, the terms proposed by the government would have made the project unprofitable.
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