PNG LNG | Do You Know ExxonMobil Can Recover Development Cost Under 5 Years

This analysis is based on the Prime Minister of Papua New Guinea (PNG) response to series of questions from the Opposition. Including latest report from the nation’s television broadcaster EMTV news on Liquefied Natural Gas (LNG) production in the country.

Many Papua New Guineans thought the US$19 billion earmarked for PNGLNG development was a huge investment. The amount actually spent was less.  A report from EMTV revealed that ExxonMobil saved over US$8 billion during construction phase.

To date over 42 shipments have left PNG shores.The Prime Minister, Peter O’Neill, when responding to Deputy Opposition leader questions about the shipments of LNG products, said a shipment was valued at US$50, 000, 000 on average. 

Expenditure margin has been reduced when ExxonMobil moved from development to production. Perhaps it is important to consider the savings of US£8 billion - a savings of 30% . Another good news for shareholders is that the company is likely to recover all the development costs – US$11 billion – in just 5 years.

For clarity: if 42 shipments worth on average US$50 000 000 each, ExxonMobile has made US$2.1 billion in six months. Double it to give US$4.2 billion in one year. So, in 5 years if oil price averages at the current rate, the project would have made US$21 billion.

So what does that mean? That means that the every shareholder would enjoy the fruit of their investments. What is not so right is the fact that PNG Government has borrowed heavily to partake in this business.


So, who is going to benefit from PNG LNG project?