Papua New Guinea's Petroleum and Energy Minister has cast doubt on the viability of Exxon Mobil teaming up with the Canadian company InterOil to develop natural-gas fields in Gulf Province.
InterOil says it's in exclusive discussions with the American oil and gas giant to develop the Elk and Antelope fields it has licences for.
Exxon already leads a 19 billion US dollar LNG project in PNG due to come on stream next year.
The Minister, William Duma, says the government has not received any formal advice from Interoil about an arrangement with Exxon.
He says if and when they get such advice, the arrangement and related issues of competition will need to be carefully examined.
"As a country there is some concern that it may not be a wise thing to allow one major energy company to dominate the industry in the country. There has already been some concerns expressed by some influential sections of the community so we are also mindful of that."