Papua LNG reshapes stakes and operatorship

Papua LNG project partners have approved a reshaped governance structure in which ExxonMobil (XOM) will assume operatorship. Under the updated ownership profile, ExxonMobil (XOM) is indicated with a 34.1% participating interest, positioning the company at the centre of project execution. The operatorship change aligns with a broader rebalancing of equity interests among existing partners.

The transfer of operatorship consolidates technical and managerial responsibilities under ExxonMobil while maintaining a multi-partner consortium structure. The reallocation of roles is accompanied by a revised view of project costs and targeted ownership positions for each participant once all planned transactions and state entitlements are reflected.

Santos has agreed to acquire an additional 3.3% participating interest in Papua LNG from TotalEnergies (TTEp) for approximately $189 million. On completion and after applying Papua New Guinea’s state back-in, this transaction would lift Santos’ interest in the project to 21.0%. The purchase deepens Santos’ involvement in Papua LNG alongside its existing gas and LNG portfolio.

The planned increase in equity aligns Santos more closely with ExxonMobil and TotalEnergies in the project’s future development. The higher stake provides Santos with a larger share of potential production and cash flows while embedding the company more firmly in the long-term LNG development in Papua New Guinea.

As part of the reshuffle, TotalEnergies plans to sell a 9.1% interest in Papua LNG. After this farm-down and the Papua New Guinea State’s back-in, TotalEnergies expects to retain a 20.0% participating interest. Despite the reduced equity position, TotalEnergies will keep its existing LNG offtake share from the project.

This structure allows TotalEnergies to moderate its capital exposure while preserving access to LNG volumes. The retained stake and offtake rights maintain the company’s strategic link to Papua LNG, even as operatorship passes to ExxonMobil and Santos increases its role.

The partners’ updated development plan for Papua LNG includes a revised total capital expenditure estimate of around US$14 billion. This figure reflects the latest project design and cost assessment under the reconfigured partnership. The capex revision is a key parameter for all stakeholders as they align financing and development strategies.

Once the farm-down transactions are completed and the Papua New Guinea State’s back-in right is exercised, the indicated equity split in Papua LNG would be ExxonMobil 34.1% as operator, Santos 21.0%, and TotalEnergies 20.0%. Kumul Petroleum Holdings and Mineral Resources Development Company (MRDC) together would hold 22.5%, while ENEOS Xplora would hold 2.4%. This structure defines the long-term commercial and governance framework for the project.