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ExxonMobil Urges Resolution to Papua New Guinea Dispute Amid Protests

Julia Gillard Visits Papua New Guinea - Day 2Julia Gillard Visits Papua New Guinea - Day 2
Former Australian Prime Minister Julia Gillard meets workers during a tour of the Exxon-Mobil Liquefied Natural Gas plant on May 10, 2013 in Port Moresby, Papua New Guinea.Chris McGrath/ Getty Images/ File

ExxonMobil (XOM) on Tuesday urged a quick resolution to a dispute between the government of Papua New Guinea and disgruntled landowners, following a protest at its $19 billion PNG LNG project over royalty disagreements.

Media reports said the protesters have given the government a seven-day deadline to pay royalties to landowners or they will forcefully shutter the operation. Landowner groups could not immediately be reached for comment.

ExxonMobil is the operator of the 6.9 million-tonnes-per-year liquefied natural gas project, partly located in the restive Highlands region of Papua New Guinea.

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Its agreement with the government sets aside a 2% royalty for landowners, to be held in trust by the government until they have vetted the clans that claim to own the land. The clan-vetting process has not yet been completed.

“Our facilities are continuing to operate,” ExxonMobil said in a statement.

“We respect the right of individuals to peacefully protest, but we also encourage continued dialogue between landowners and the government to resolve their outstanding issues promptly.”

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A person familiar with the situation said production had not been affected and the protests had been peaceful. Personnel have been entering and leaving the plant while protesters gathered outside, the source told Reuters.

The person said the PNG LNG owners were working closely with the government to resolve the issues as quickly as possible.

ExxonMobil is weighing an expansion of its PNG LNG plant, which has been exporting for two years. ExxonMobil has a one-third stake in the project, whose partners include Australia’s Oil Search (OISHY) and Santos (STOSF).