July 16, 2019 / 1:43 AM / a month ago

UPDATE 3-At Oil Search party, PNG prime minister seeks bigger slice of cake

* New PM presses for bigger tax take

* Oil Search trims 2019 spending forecast on project delay

* Second-quarter revenue misses forecasts (Adds Oil Search comment)

MELBOURNE/SYDNEY, July 16 (Reuters) - Papua New Guinea’s new prime minister used Oil Search Ltd’s 90th birthday to press the country’s biggest company and its oil major partners to pay more tax to the impoverished Pacific island nation.

Prime Minister James Marape’s comments come as Oil Search and partners Exxon Mobil Corp and Total SA face delays on a $13 billion plan to double liquefied natural gas (LNG) exports from the country, with the new government seeking to win more from resource projects.

Oil Search has long prided itself on work it does in PNG communities, including funding health care and literacy programs, but Marape said that was not the company’s job.

“So going into the future we will not be asking much of you in terms of community service obligation, but we will be asking you to pay your fair share of tax,” Marape said in a speech at Oil Search’s 90th birthday celebration in Port Moresby last Friday. Excerpts were released on Tuesday.

“We will be asking of you and others in the industry for a greater participation in ... downstream processing. We’ll be asking of you for a clearer, better definition of what local content is,” he said.

Oil Search said in a statement on Tuesday it fully supports Marape’s call for all companies operating in the country to pay their fair share of tax.

The company said it paid $988 million in taxes from 2013 to 2018, which included tax credit expenditure for building the conference centre showcased at last year’s Asia-Pacific Economic Cooperation summit.

The company on Tuesday pared its full-year capital spending guidance by $45 million to between $500 million and $610 million due to a delayed start to front-end engineering and design work for the expansion of the Exxon-operated PNG LNG plant.

The expansion is due to be fed by gas from Total’s Papua LNG project, the P’nyang gas field and existing fields.

Oil Search said early work has been delayed because talks with the government on developing P’nyang have been put on hold while the new government reviews the Papua LNG agreement, signed in April.

Oil Search shares fell 2.2% in a flat broader market after it reported the delay and second-quarter revenue that missed estimates by a wide margin.

Revenue for the quarter ended June 30 rose to $378.9 million from $262.8 million a year earlier, when a deadly earthquake forced a shutdown of PNG LNG. Citi had expected quarterly revenue of $421 million.

Compared with the first quarter, sales were flat but revenue fell due to weaker LNG pricing, tied to lower oil prices, Oil Search said.

Reporting by Sonali Paul in Melbourne, Tom Westbrook in Sydney and Devika Syamnath in Bengaluru; Editing by Subhranshu Sahu and Richard Pullin

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below