PORT MORESBY, 03 APRIL 2017 (POST COURIER) — Operator of the Papua LNG Total E&P Limited has described new tax measures under the Papua New Guinea 2017 budget as less attractive to its interest in developing the project.
And it plans to seek the Government’s intervention to ease fiscal conditions which can accommodate more conducive benefits for both.
It said its entry into the country was based on previous attractive fiscal conditions under which it negotiated, and which the current gas agreement was based.
Its managing director Philippe Blanchard said this when responding to a question raised by a member of the business community, about the tax current regime and what impact it is having on the investment decision which the firm is expected to make.
Blanchard said from the outset what was important from Total as the operator of the Papua LNG is that it will be making the decision for FID.
He said that to be able to secure project finance, the challenge is to convince the lender that the project is a good one.
“With a good project there is costs and economy of the project.
“In the economy of the project it is clear that the fiscal terms are key,” he said.
He said one of the reasons the French firm came to PNG was because the environment was attractive in clear fiscal terms.
“What we can see from the Budget 2017 is that it is making that less attractive.
“It’s clear that at the time we negotiated the gas agreement, which is the agreement we need to have in place, one of the key chapter of the agreement is the fiscal terms,” he said.
“We will have to discuss with the state those terms and it is going to be for the benefit of everyone.
“The developer and the State have to reach a good agreement, because those terms are going to make the project competitive.
“We will do everything we can in terms of costs but the fiscal we need the state to help us,” Blanchard said…..PACNEWS [/restrict]