Papua New Guinea's prime minister has indicated that the proposed changes to the country's petroleum fiscal regime that are aimed at boosting PNG's share of the benefits could be softer than initially planned.
The government led by Prime Minister James Marape wants to increase the state's share of revenue from oil, gas, LNG and minerals production.
The government probably would have already passed legislative changes to enact new fiscal policies but the Covid pandemic and parliamentary suspension have delayed those reforms; parliament is due to return this August.
Speaking at the PNG Mining and Petroleum Seminar on 3 June 2021, Marape offered his appreciation of the natural resources sector and said any proposed policy changes would "not harm" the petroleum and mining sectors, and that full consultation with the two sectors would happen before any changes were made.
The planned shift to a production sharing contract regime from the royalty/tax concessionary system that has existed for five decades is of concern to the industry, and Marape acknowledged that whether a PSC system or a hybrid system is introduced it was clear to him that government was not being "absolutely clear" on its plans so he would seek to provide clarity over the next two months.
"The changes are not taking place yet, but the intention is there," he said.
The PSC regime might "not be the way to go" but the government would find a way to improve the state's share of direct and indirect benefits while ensuring investors had a satisafactory rate of return.
He said negotiations had re-opened with ExxonMobil regarding the P'nyang project, while the Papua LNG project had remobilised.
In addition, negotiations were ongoing with Twinza Oil for the Pasca development.
Marape also pointed to the recent agreement with Barrick over the restart of the Porgera gold mine as a good example of the benefits of direct negotiations.
Porgera will now be owned by a joint venture comprising PNG stakeholders with 51% and Barrick with 49%.