Prime Minister James Marape said the government will review the unresolved 4.27% equity in the PNG LNG project, signalling a broader reset of benefit-sharing arrangements to improve returns for landowners and provincial governments.
Responding in parliament to Komo-Hulia MP Daniel Tindipu, Marape said the equity component—linked to agreements struck before the project’s 2014 first gas—remains unsettled more than a decade later.
“This equity component was intended as a meaningful participation mechanism … it is clear that this matter has not been fully resolved,” he said.
Legacy of UBSA under scrutiny
Marape traced the issue to the 2008–2009 Umbrella Benefit Sharing Agreement (UBSA), which underpinned the project’s final investment decision and included the 4.27% equity as an additional, non-statutory benefit.
He said the allocation was designed to supplement mandated entitlements under the Oil and Gas Act, including the 2% royalty and equity provisions, but acknowledged that intended beneficiaries have yet to fully realise its value.
Despite the PNG LNG project generating substantial revenues since 2014, the equity’s structure and utilisation remain unclear.
Kumul Petroleum tasked with full audit
Marape said the government has directed Kumul Petroleum Holdings Limited to conduct a comprehensive review of the equity, including its historical treatment and current valuation.
“This is a holistic review … we are examining the full structure of our national equity interests,” he said, adding that the exercise will also cover the state’s broader stake in the project.
The findings will be submitted to cabinet to inform policy decisions on allocation and governance.
Distribution model under consideration
Marape outlined a three-part framework under consideration for the equity:
- direct financial distribution to landowners and provinces;
- preservation of value through long-term savings mechanisms; and
- stronger governance and accountability structures.
He said the government would prioritise a structured and sustainable approach rather than a rapid disbursement.
“We will not rush this decision. It must be structured carefully to ensure fairness and long-term impact,” he said.
Legal distinction shapes approach
Marape emphasised that the 4.27% equity is not a statutory entitlement, unlike royalty and equity provisions already distributed under existing law.
“This component was a negotiated benefit … that is why we must handle it carefully,” he said, suggesting existing distribution systems could be adapted for future allocations.
Agreements open to review
The government is also assessing whether existing agreements, including the UBSA, can be revisited.
Marape said officials will examine review clauses to determine whether provisions allow updates to reflect current economic and policy conditions.
“If provisions exist, we will activate them to ensure agreements remain fair and relevant,” he said.
Domestic gas utilisation in focus
Separately, Marape said the government is in talks with operators including ExxonMobil and Santos Limited to expand domestic use of Papua New Guinea’s gas resources.
The discussions include potential in-country processing and utilisation within petroleum development licence areas to reduce reliance on fuel imports.
“Our goal is greater energy security, more affordable fuel, and increased downstream activity,” he said.
Broader policy signal
Marape framed the review as part of a wider effort to ensure resource projects deliver tangible and equitable benefits.
“This is about fairness, accountability, and nation-building,” he said, adding that decisions will be guided by legal frameworks and national interest.
