• 4 minutes China 2019 - Orwell was 35 years out
  • 7 minutes Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 11 minutes Trump will capitulate on the trade war
  • 14 minutes Glory to Hong Kong
  • 4 mins Bloomberg: shale slowing. Third wave of shale coming.
  • 25 mins Boring! See Ya Clowns, And Have Fun In Germany
  • 5 mins China's Blueprint For Global Power
  • 5 hours Crazy Stories From Round The World
  • 7 hours USA Carried Out Secret Cyber Strike On Iran In Wake Of Saudi Oil Attack
  • 31 mins 5 Tweets That Change The World?
  • 9 hours Shale Magic: SABIC, ExxonMobil break ground on US Gulf Coast petrochemical project
  • 5 hours ABC of Brexit, economy wise, where to find sites, links to articles ?
  • 4 hours the future
  • 9 hours Yesterday Angela Merkel stopped Trump technology war on China – the moral of the story is do not eavesdrop on ladies with high ethical standards
  • 5 hours Climate Protesters Blocking Roads etc...
  • 24 mins Leftists crying to make oil patch illegal friendly: 'Broken system' starves U.S. oil boom of immigrant workers: CONGRESS DO YOUR JOBS INSTEAD OF PANDERING!
Alt Text

China Makes A Move On OPEC's No.2

China has refocused its attention…

Alt Text

IEA Draws Gloomy Oil Demand Outlook For 2020

A weakening global economy and…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Papua New Guinea Clans Unite Against Exxon

Papuan landowners and communities in the vicinity of Exxon’s Papua New Guinea LNG project are growing increasingly disgruntled about how the company and the national government are handling royalty distribution, a Reuters investigation has found. This sentiment has led to inter-communal clashes in some areas and might lead to more serious trouble for the project.

“Our clans fought each other, but now there is peace; we are one team fighting Exxon.” These are the words of a local clan leader, Johnson Tape, one of 16 such leaders who are claiming rights over the Komo Air Field, which is used by the PNG LNG project, Reuters’ Jonathan Barrett and Tom Westbrook write.

They also relate the story of one local landowner who was promised a much higher royalty once PNG LNG began operating than she actually received. This landowner and others blame both the local government and the project operator for failing to fulfill their compensation promises. For now, it seems that this disgruntlement is more of a passive attitude, but Tape’s words could be an early warning for something worse to come.

There is a precedent. Last year, a devastating 7.5-magnitude earthquake shook the country, suspending operations at PNG LNG. The earthquake came amid growing tensions among local landowners already unhappy with Exxon’s project and with the government, sparking protests among the locals. In one part of the country, the Southern Highlands, the protests were violent enough to prompt the government to declare a state of emergency for the province.

In the Hela province, where a lot of PNG LNG production and transport facilities are located, protesters set some construction equipment on fire and landowners blockaded a wellhead in the production part of the PNG LNG project, threatening to shut it all down. That spurred the authorities into action and a little later representatives of the landowners said they were getting close to a deal with the government. Apparently, they haven’t gotten close enough to end the bad blood to date.

Related: There Is Still Room To Run For Oil Prices

The PNG LNG project cost US$19 billion and had a nameplate annual capacity of 6.9 million tons of liquefied natural gas. Yet in 2017, the project yielded as much as 8.3 million tons of LNG, according to the Reuters investigation. Since 2014, when production began, Exxon has raked in some US$18.8 billion in revenues, also according to Reuters since the company does not release figures for PNG LNG.

However, the Papuan government’s expectations for its own revenues were revised substantially down from the initial 2012 estimate of US$22 billion over the productive lifetime of the project, until 2040. Last year, these were calculated at just half the initial amount, on the back of tax deductions for the operator and its partners, and lower gas prices.

An investigation by the World Bank found that the companies behind the project had developed “a complex web of exemptions and allowances that effectively mean that little revenue is received by government and landowners.” This doesn’t really bode well for the future of PNG LNG unless Exxon and its partners somehow renegotiate the terms of their agreement to avoid a buildup of tensions with unpleasant consequences all around.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • Dan Foster on January 20 2019 said:
    They might have a very good case against Exxon if they were told something that didn't happen. One side of the contract did not fully understand what they signed. Therefore, not a mutual agreement of the minds.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play