Papua New Guinea has granted a license to a state-owned company to develop a gas field, preferring to keep control and income from the resources within the government rather than giving a private foreign company the rights to develop the new project.
The government of Papua New Guinea has given the rights to state-controlled Kumul Petroleum to develop the Pandora gas field, preferring the government-owned entity to private firm Twinza Oil, which is headquartered in Australia, Reuters reports.
Apart from Twinza Oil, other international players in Papua New Guinea include supermajors ExxonMobil and TotalEnergies, as well as Oil Search of Australia, which has just announced a megamerger with Australia's gas giant Santos.
Oil Search holds a 29-percent stake in the PNG LNG project in Papua New Guinea led by Exxon, as well as a 22.8-percent interest in Papua LNG-a brownfield growth opportunity, according to the company.
Handing the Pandora gas field license to a state-controlled firm signals that the government of Papua New Guinea is not easing its nationalist policies despite being open to discussing projects with international majors, Reuters notes.
The decision to give the development rights to state-held Kumul Petroleum is "a new revolutionary approach in the way the State has been conducting its petroleum business," Papua New Guinea's Petroleum Minister Kerenga Kua said in a statement carried by Reuters.
Twinza Oil, which was hoping to tie the Pandora field with its Pasca A gas project, said it was disappointed with the government's decision.
Before the license was awarded, Twinza Oil's chairman and CEO Ian Munro said last month: "Industry is closely watching the Pandora license award to gauge transparency and whether the Government will support a proven offshore operator and stimulate additional exploration and development investments."
"It is quite a risk with government money to take on exploration and appraisal, when foreign companies like Twinza are looking to take the risk on. The industry is confused by these decisions," Munro told Reuters after the license was awarded to the state firm.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More