State gives deal deadline

PETROLEUM Minister Kerenga Kua says a deal for Pasca A project in Gulf must be agreed upon today or the State will pull out of negotiations.
The State negotiating team (SNT) and Twinza Oil Ltd will be entering final negotiations today.
“For various reasons including the failure of the parties to reach an agreement on the State’s benchmark of a minimum benefit package has led to the delay in final agreement,” Kua said.
“The State is determined to set a limit for a minimum benefit package for the State on behalf of the people.
“In recent years the landscape in Papua New Guinea has changed totally in respect of the people’s expectations arising out of the exploitation of natural resources in the country.
“This logic is quite simple.
“There is a huge need for development which can only be financed through improved cash flow.
“More people want to participate in that process.
“More has to be received in the front end to have more around for sharing with the people at the back end.”
He said the project was small in LNG terms and had a resource reservoir of less than half of one per cent of a trillion cubic feet of gas.
It would cost about US$800 million (K2.7 billion) to develop and is located about 100km offshore of Gulf.
“However, vigorous negotiations have led to one small narrow point which if agreed to in the final meeting on July 6, would pave the way for the signing of a gas agreement,” Kua said.
“The Government regards this as a crucial deal making and breaking issue.”
Kua warned that negotiations could not carry on endlessly.
“After say eight months of negotiations, a deal must be agreed upon on July 6, 2021, or the State will pull out of the negotiations completely,” he said.
“Prime Minister (James) Marape fully supports this position.
“Should that happen then other State agencies are empowered by the Oil and Gas Act to take over the matter and deal with it in accordance with their statutory powers.
“The negotiations with Twinza Oil Ltd will be ended and the SNT team disbanded.”
Despite that, Kua maintained that he was optimistic on a final agreement being reached.