- PNG leader wants greater economic, social benefits from gas
- Says will negotiate new terms with ExxonMobil for expansion
(Adds more quotes, details)
Papua New Guinea will seek greater economic and social benefits from a proposed $10 billion gas investment by ExxonMobil
, the country's biggest foreign investor, while ensuring the project stays competitive, Prime Minister Peter O'Neill told Reuters on Monday. "We will be asking for more domestic market obligations, local content in terms of the benefits that go to our people from developing this project," O'Neill said in an interview.
"We are going to be fair," he added. O'Neill is in Sydney to attend a conference aimed at attracting investment to the resource-rich Pacific nation to Australia's north.
Papua New Guinea has been hit hard by a slump in commodity prices in the two years since ExxonMobil and foreign minority partners completed a $19 billion liquefied natural gas (LNG) investment. The oil giant is now considering an expansion the government says will cost a further $10 billion.
"The first LNG project was a foundation project, so we gave them very generous fiscal terms when we agreed to this project," said O'Neill, who is standing for re-election in 2017.
"Now that it is up and running, it is one of the most cost- effective projects globally," he said. "It is still making good returns while commodity prices are depressed, as we see it."
With dwindling revenue from mining, the PNG government had been counting on LNG - where the contract prices are tied to oil - to return its budget to surplus by 2020. Yet with a slump in oil prices, it now expects deficits to persist for at least another five years.
