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* Terms of Papua LNG deal being reviewed - petroleum minister
* Total agreed deal in April, before change of PM in PNG
* Balance must be struck between investors and citizens - minister
By Tom Westbrook
SYDNEY, July 25 (Reuters) - Papua New Guinea's petroleum minister said a gas deal it agreed with French oil major Total SA TOTF.PA could be re-drawn if a government review finds its terms unfavourable.
The deal, for a project called Papua LNG, was agreed in April but put up for review after the prime minister who signed it was ousted in a parliamentary vote in May, following a crisis caused by discontent over the distribution of resource riches.
Petroleum Minister Kerenga Kua, who was appointed to the portfolio last month by new Prime Minister James Marape, said he wanted to increase the government's share of resource revenue.
"Any signatory to a contract can, anytime after an agreement has been signed, go back to the negotiating table if they are, as an afterthought, unsatisfied with certain aspects of the terms and conditions of the contract," he said on the phone from Port Moresby. "Our approach is purely commercial in nature."
The Papua LNG project, a joint venture between Total, Exxon Mobil Corp (NYSE:XOM) XOM.N and Australia's Oil Search Ltd OSH.AX , is part of a $13 billion project set to double the country's exports of liquefied natural gas.
Kua's remarks are the first indication yet that the closely watched review will include scrutinising the deal's terms, and that the government is open to a potentially lengthy renegotiation. He did not specify which terms could be changed.
Total's Chief Executive Patrick Pouyanne in response, urged Papua New Guinea's government to respect the gas agreement.
"I believe that these types of agreements are signed with countries, so we expect the new government to respect it," Pouyanne told analysts during a conference call after reporting second quarter results. L8N24Q1WB
Exxon and Oil Search had no immediate response when contacted by Reuters. The sector has been on edge since Marape won office and said that his government wished to increase its income from oil and gas projects. as a government, have opted to re-look at the (Papua LNG) agreement because it was signed at a time when we were in the throes, or in the process, of changing the government," Kua said.
"It's about weighing it between the nervousness of the investors and the pain and suffering of our own people ...By consultation, you will be able to test the threshold of tolerance and then find that balance," he said. "But as leaders of this country, we listen to our people first."
The review will run a few more weeks and consider both whether the deal complies with national laws and whether its terms are acceptable. At the same time, the government is preparing reforms of its resources legislation.
Kua's comments came just hours before Marape gave a speech in Sydney during a six-day visit to Australia where he promised a "a new chapter" in PNG's development.
"To achieve full economic independence, we must change our mindset and those of investors," said Marape.
"We must work with responsive economic partners and ensure fair allocation of our economic resources."