Thursday 24 September 2020
An agreement has been reached for the Papua New Guinea’s first offshore development project, the PASCA Offshore Petroleum Project in the Gulf of Papua, to move forward under a new agreed terms.
Prime Minister James Marape, said intensive negotiations were held between the State Negotiation Team (SNT) and Twinza Oil Limited, to reach this landmark deal.
Under the terms agreed, the State will achieve between 61% and 65% of economic benefits, early revenue, provincial and direct economic benefits through a 2% Development Levy and royalties of 2% of gross revenue, access to LPG discounted by 30% for national consumption at 5%, guaranteed, and a commitment to develop a detailed National Content Plan within six to 12 months of the signing of the gas agreement .
“The terms agreed reflect the substantial technical work carried out by the Department of Petroleum and Energy, Twinza Oil Limited and the State Negotiating Team, leading to the best possible deal for the people of our nation”, Prime Minister Marape said.
He adds the agreed terms are consistent with the Government’s negotiation parameters and will lead to significant long-term economic benefits for the nation.
“This is a significant outcome for Papua New Guinea. It reflects the Marape-Steven Government’s commitment to deliver a better and fairer share for the people of our country.
“The project will deliver immediate economic benefits on production, downstream processing capability and domestic market access, and real local content to benefit and empower local Papua New Guinean workers”, the Prime Minister said.
Key features of the negotiated terms also include fixed revenue to the State through agreed taxation arrangements, back-in-rights at 25% at the time the fixed investment decision (FID) is made, or earlier if agreed, third party access as required by law to facilitate future discoveries, aggregation by the operator if new fields are discovered, which will enjoy the same fiscal terms under the terms of the Gas Agreement, and incentives for the operator to conduct more drilling within the licensed Pasca A area.
“This outcome demonstrates the value of firm negotiations and partnership in seeking to deliver the best deal for both the State and the operator”, Prime Minister Marape said.
The Prime Minister thanked Minister for Petroleum and Energy, the Hon. Kerenga Kua, and his Department, the State Negotiation Team led by Ambassador Isaac Lupari, and Twinza Oil for all their efforts in securing this historical and landmark deal.
“The basis of this negotiation will form upcoming negotiations, resulting in tens of billions of kina in increased revenue and benefits to our nation in the years and decades to come”, the Prime Minister said.
Twinza Oil Limited is the operator of the PASCA offshore petroleum project.