01/24/2012 06:17 am ET Updated Mar 25, 2012

Papua New Guinea Landslide Prompts Exxon Mobil To Stop Work

CANBERRA, Jan 24 (Reuters) - A landslide swept through two villages in Papua New Guinea on Tuesday, covering much of the settlements in mud and leaving up to 40 people missing, officials and residents told Australian media.

The accident, which occurred in the island state's Southern Highlands on Tuesday morning, prompted U.S. oil giant Exxon Mobil to stop work at its nearby $15.7 billion liquefied natural gas (PNG LNG) project.

The Australian Broadcasting Corporation said it was unclear how many people had been affected by the landslide due to conflicting local reports.

But local parliamentarian Francis Potape told ABC radio the slide covered two villages in mud, leaving some residents buried. Joseph Warai, a resident of the stricken area, said around 40 people were missing.

The Papua New Guinea police and the National Disaster Centre were unavailable for comment, with officials expected at the landslide site on Wednesday.

Papua New Guinea shares the island of New Guinea with Indonesia, and is Australia's nearest neighbour, directly north. The majority of its people live subsistence lives despite its abundant mineral wealth.

ExxonMobil leads a consortium building the LNG project, the country's biggest-ever resource undertaking due to come on stream in 2014. The project is expected to produce 6.6 million tonnes per annum and could see GDP increase by 20 percent.

Exxon spokeswoman Rebecca Arnold said she had no details on the scale of the landslide or when work would resume on PNG LNG.

"All PNG LNG Project personnel have been accounted for," Arnold said. The company said it would help with any rescue effort.

The PNG LNG project is a joint venture between Exxon Mobil, Oil Search, Santos, Japan's JX Nippon Oil and Gas Exploration, a unit of JX Holdings, and the Papua New Guinea government.