National Petroleum Authority Act brings in the NPA and a 0.5% levy 5 min read
The Papua New Guinea (PNG) Parliament recently passed the National Petroleum Authority Act 2025 and the Oil and Gas (Amendment) Act 2025, establishing the National Petroleum Authority (the NPA) as the new regulator for the petroleum sector.
In this Insight, we explain the changes and their impact on the PNG oil and gas industry.
Key takeaways
- The National Petroleum Authority Act, passed on 12 March 2025, establishes the NPA to replace the Department of Petroleum and Energy, with the Petroleum Advisory Board continuing under the oversight of the NPA's new board.
- The National Petroleum Authority Act introduces a 0.5% levy on the gross sales revenue of crude oil, gas, liquefied natural gas (LNG), condensates and liquefied petroleum gas (LPG) from petroleum producers and exporters in PNG, though does not define these terms, implying they refer to holders of Petroleum Production Licences.
- Consequential amendments have been made to the Oil and Gas Act 1998 to align it with the changes made under the National Petroleum Authority Act
Establishment of the new NPA
The National Petroleum Authority Act creates the NPA to replace what remains of the Department of Petroleum and Energy, following the separation in 2021 of the Energy wing, which created the National Energy Authority. The new Act provides for the NPA's powers and functions, which include advising the Minister on matters relating to petroleum, and the management, exploitation and development of PNG's petroleum resources.
The new Act provides that the NPA will have a seven-person board, and for the makeup of that board as well as its members' qualifications.
It indicates that the Petroleum Advisory Board constituted under the Oil and Gas Act will continue under the oversight of the new NPA board.
The NPA will also have a managing director who may appoint its staff.
Upon the NPA's creation, it appears that all staff at the Department of Petroleum and Energy will become staff of the new NPA and remain in their current positions, until those positions are confirmed or made redundant.
The new Act introduces the NPA levy on all petroleum producers and exporters in PNG at the rate of 0.5% of gross sales revenue of crude oil, gas, LNG, condensates and LPG. It does not define the term 'petroleum producers' or exporters and, in the absence of such a definition, we assume that this is a reference to the holders of Petroleum Production Licences, similar to the levy imposed on mining companies under the Mineral Resources Authority Act 2018.
Consequential amendments have also been made to the Oil and Gas Act, to bring it into alignment with changes made under the National Petroleum Authority Act.
When presenting the new Act in Parliament, the Minister for Petroleum, the Hon Jimmy Maladina, indicated an expectation that fees and charges collected annually by the department would double or triple with the creation of the NPA, and that revised fees and charges schedules have been made and are pending gazettal. We assume this is a reference to amendments to the Oil and Gas Act and the Unconventional Hydrocarbons Act 2015. We expect the amendments to those Acts will occur once the National Petroleum Authority Act is in force.
The fuels market
Aside from establishing the NPA to replace the Department of Petroleum and Energy, the preamble to the new Act also says that it is an Act 'to provide an administrative framework for the implementation and enforcement of laws and policies governing petroleum activities and matters in Papua New Guinea'.
A 'petroleum activity' or matter means any activity or matter the subject of the Oil and Gas Act, the Unconventional Hydrocarbons Act, the Oil and Gas Regulation 2002, and any other related laws.
While the government has indicated an intention in the PNG National Energy Policy 2017 – 2027 (the National Energy Policy) to establish an 'independent regulatory entity' in respect of the fuels market, the preamble to the NPA indicates that the NPA will not be that regulatory entity. At this time the National Energy Authority continues to be the principal regulator of the fuels market with aspects of fuel pricing set by Treasury Department under the Price Regulation Act and the Independent Consumer and Competition Commission.
A regime change?
When presenting the new Act, the Minister flagged an intention to enhance the petroleum regulator's role by prioritising 'the creation of the National Petroleum Authority as an independent, effective and efficient regulator', with 'reform work on the fiscal regime and production sharing framework being looked at closely and pursued'.
He stated that the NPA is expected to play a key role in implementing policies such as production sharing contracts, downstream processing and domestic market obligation, among others of national interest.
We previously observed that when Parliament advertised the Organic Law on PNG's Ownership and Development of Hydrocarbons and Minerals and the Consolidation and Commercialisation of PNG's Business Law 20161 (the Organic Law), it was not clear whether the Organic Law signalled an intention of changes to come, 'perhaps following completion of, for example, the Mining Act and tax reviews that were [then] underway'. We now appear to have come full circle, with a new Income Tax Act having been passed by Parliament on 20 March 2025,2 and a proposed 'final' version of the Mining Act 1992 currently being discussed.3 It seems that the creation of the NPA could herald the long-anticipated regime change in the PNG oil and gas industry.
What's next
The National Petroleum Authority Act and the Oil and Gas (Amendment) Act will come into force on publication in the National Gazette of commencement notices.
We expect that amendments to the schedules of fees and charges under the Oil and Gas Act, and the introduction of fees and charges under the Unconventional Hydrocarbons Act, will occur at the same time or shortly thereafter.
Please get in touch with any of the people below if you'd like to understand more about what these changes mean for you.
Footnotes
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The Organic Law was passed by Parliament on 31 March 2016.
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https://www.thenational.com.pg/bill-on-mining-to-be-tabled/.