TOM WESTBROOK | Reuters
SYDNEY - Papua New Guinea has signalled it will back a previously agreed multibillion dollar liquefied natural gas (LNG) deal involving Australia's Oil Search, although it said that some terms still need negotiating.
The deal, for a project called Papua LNG, was agreed in April. However it was put up for review after the prime minister who signed it was ousted in a parliamentary vote in May, following a political crisis caused by discontent over the distribution of resource riches.
Oil Search CEO Peter Botten said the company was "encouraged" by the PNG petroleum minister's statement.
Papua LNG, which is a joint venture between French oil major Total, Exxon Mobil Corp and Oil Search, is part of a $A19 billion project to develop gas fields off PNG's shores and double the country's exports of LNG.
On Sunday, petroleum minister Kerenga Kua, who was appointed to the portfolio in June by new prime minister James Marape, said his government "in principle" stood behind the project.
"However, the state has reserved its rights to discuss a shortlist of matters to be discussed with the developers," Mr Kua said in a statement. Finalising the details should not take more than two weeks, he added.
"We believe that what we have discussed and agreed to are favourable and will not affect the general economics and fiscal terms of the Papua LNG Gas Agreement."
Oil Search chief Peter Botten said his company was "encouraged" by Mr Kua's statement that the cabinet would in principle stand behind the deal.
"Oil Search is committed to supporting the operator of Papua LNG (Total) and the government, in resolving any final questions on Papua LNG Gas Agreement", he said in a statement to the ASX on Monday.