Papua New Guinea’s Petroleum Minister Jimmy Maladina has reaffirmed the Marape-Rosso Government’s commitment to reshape the country’s petroleum industry through a new fiscal and regulatory framework aimed at delivering fairer, more transparent and sustainable outcomes for the State and its people.
Delivering the ministerial keynote address at the opening of the 2025 Papua New Guinea Petroleum and Energy Conference (PEC) on 8 October 2025 at the Stanley Hotel, Port Moresby, Minister Maladina said the Government’s reform agenda would redefine the sector’s contribution to national development over the next 50 years.
“As Papua New Guinea celebrates 50 years of independence, we must look ahead with clarity and purpose,” he told delegates. “The decisions we take today will define the petroleum sector’s contribution to our nation in the next half century.”
Reflecting on 50 years of petroleum development
Minister Maladina acknowledged the petroleum sector’s vital role in the economy since the first oil from Kutubu flowed in 1992 and PNG LNG exports commenced in 2014, noting that hydrocarbons have powered the nation’s growth and connected it to global markets.
However, he said the existing oil and gas fiscal regime had fallen short of expectations, with government revenues often delayed or diluted by deductions extending throughout project life cycles.
“The State’s share of revenues from projects were well below 50 percent and are diluted through deductions that prolong during project life,” Maladina said. “State equity participation in petroleum projects has caused the State to commit to sovereign debt and risk. This must not continue.”
Reforms to reshape the industry
The minister announced a comprehensive reform programme based on three key pillars: institutional reform, fiscal and regulatory reform, and transparency with local participation.
Central to these reforms is the introduction of a Production Sharing Contract (PSC) framework, which will replace the current tax and royalty system for future projects. Minister Maladina described this shift as “the most significant fiscal and regulatory change since independence.”
“The PSC model provides early revenue for the State and landowners, ensures transparency in cost recovery, and maintains investor competitiveness,” he said. “It strikes a balance between national interest and investor confidence.”
He confirmed that the Government had approved the PSC Policy White Paper, which will now guide industry consultations leading to the drafting of new PSC legislation. The National Executive Council (NEC) has directed a State Working Team, led by the newly established National Petroleum Authority (NPA), to spearhead this process.
Key features of the PSC framework
Minister Maladina outlined several key features of the new framework:
- Landowners and provinces will each receive 2% of gross revenue, drawn from royalty and development levy, ensuring benefits are not reduced by deductions.
- The State will receive a minimum of 10% of gross revenue from the start of production to ensure predictable income.
- Investors will recover exploration, capital and operating costs transparently through cost recovery mechanisms overseen by the NPA.
- A 0.5% National Petroleum Levy will fund NPA operations and data management.
- Landowners will receive 2% free carried equity, with the State retaining the option to acquire up to 20.5% equity on commercial terms.
- The State will also own all infrastructure used for the extraction, transportation and processing of petroleum.
“This framework ensures early and reliable revenue for the State, guaranteed participation for landowners, and transparent, competitive conditions for investors,” Minister Maladina emphasised.
Sector updates and emerging projects
Minister Maladina also provided updates on ongoing and upcoming projects that will shape the future of PNG’s petroleum landscape.
He noted that while mature oilfields such as Kutubu, Moran and Gobe are in decline, a new generation of gas projects — including Papua LNG, P’nyang Gas Project, Pasca A and Stanley Gas Project — are progressing well, alongside emerging prospects such as Wildebeest and Mailu.
“These projects represent billions of kina in potential investment. They will redefine PNG’s production capacity and create a strong foundation for the next 50 years,” he said.
According to Maladina, the PSC framework aligns PNG’s petroleum regime with international models used in Indonesia, Malaysia and Brunei, positioning the country as a credible and modern jurisdiction.
He said, “As global LNG competition intensifies and the energy transition accelerates, investors seek predictable and transparent environments. This reform signals to the market that PNG is open, reliable and reform-driven.”
The minister said the petroleum sector would remain a cornerstone of PNG’s economy while supporting diversification and sustainable development.
“Over the next five decades, we will channel petroleum revenues into national wealth creation, expand downstream processing, promote cleaner energy, and build strong institutions that outlast political cycles,” Maladina said.
He concluded his address by reaffirming the Government’s determination to secure fair and lasting benefits for future generations.
“When PNG celebrates 100 years of independence in 2075, let future generations look back and say: this policy was the catalyst that anchored our growth and prosperity, built on fairness, transparency and enduring partnerships,” the minister declared.
