Papua New Guinea flags talks stall with Exxon on $13 billion gas expansion

Papua New Guinea’s petroleum minister on Friday flagged a standoff in talks with Exxon Mobil Corp tied to a $13 billion gas expansion, saying the U.S. oil giant was unwilling to negotiate on the country’s terms.

The state’s negotiating team had set out draft terms for negotiations on developing the P’nyang gas field, which Petroleum Minister Kerenga Kua said were in line with international standards and would ensure a “fair deal” for PNG.

“It is disappointing Exxon has refused to even consider these terms and we urge them to reconsider their position,” Kua said in a statement emailed to Reuters.

The new delay to the P’nyang agreement will make it harder for Exxon and its partners Total SA, Oil Search and Santos Ltd to reach a final investment decision in 2020 on their plans to double LNG exports from the country.

Exxon Mobil’s PNG spokesman said discussions with the PNG government were ongoing and an agreement was needed before decisions could be made on preliminary engineering and design for the expansion of its PNG LNG plant.