Prime Minister Announces Outcome Of Negotiations For The Offshore Pasca Petroleum Project
Prime Minister James Marape, yesterday, announced the outcome of negotiations for the development of Papua New Guinea’s first offshore development project, the PASCA Offshore Petroleum Project.
“Following intensive negotiations between the State Negotiation Team (SNT) and Twinza Oil Limited, in-principle agreement, has been reached to move forward with developing a new offshore processing site in the Gulf of Papua,” he said.
The agreed terms are consistent with the Government’s negotiation parameters and will lead to significant long-term economic benefits for the nation.
“The terms agreed to 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,” Mr Marape said.
Under the terms agreed, the State will achieve between 61 and 65 per cent of economic benefits, early revenue, provincial and direct economic benefits through a two per cent Development Levy and royalties of 2 per cent of gross revenue, access to LPG discounted by 30 per cent for national consumption at five per cent, guaranteed, and a commitment to developing a detailed National Content Plan within six to 12 months of the signing of the gas agreement.
“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,” he said.
Key features of the negotiated terms also include fixed revenue to the State through agreed taxation arrangements, back-in-rights at 25 per cent 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 licenced 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,” Mr Marape said.