ExxonMobil has rights to take another offer to Govt: Kua

EXXONMOBIL has a commercial right to take another offer to the Government to negotiate if it wants to, says Petroleum and Energy Minister Kerenga Kua.
Kua told parliament that when responding to North Fly MP James Donald’s query regarding the P’nyang project in Western.
Donald wanted to know why there were ongoing talks between ExxonMobil and the State after Prime Minister James Marape had announced that no deal had been reached during negotiations.
“To my knowledge, when it is announced that there is no deal, it means that there is no room for negotiations,” Donald said.
He said from confirmed sources, it was understood that ExxonMobil’s P’nyang gas field Petroleum Retention Licence (PRL) had expired in May 2016 and asked the minister to confirm if this was true.
“This is after three consecutive terms of issuance according to Oil and Gas Act and a room for extension had been exhausted which is now over 20 years,” Donald said.
“ExxonMobil has failed to meet the requirements for which we are told that they have full-field only four out of the nine criteria.”
Kua said the reason why there were still some conversations going on was that according to the law (Oil and Gas Act), which also explained the expiry issue of ExxonMobil’s retention licence.
He said under the Oil and Gas Act, the government could issue different licences which were given at different stages.
“There is an exploration licence, a retention licence and a development licence,” Kua said.
“The retention licence has a duration of two years which can be extended three times under the act, but cannot be extended further thereafter.”
He said, however, the Oil and Gas Act stated that the holder of a retention licence could apply for a development licence when the duration of the retention licence neared expiration.
“When that happens, all the rights under the retention licence extends, which is the case for Exxon,” Kua said.
“Their licence has expired but before that happened, they applied for a development licence. By operational law, their rights under the retention licence continues which is enforceable in our courts.
“Exxon has a continuous legal right under its retention licence and because that right continues to exist, if they come to us with a revised offer, it is a commercial decision and that potential still exists and we will wait and see.”