The Papua New Guinea government and ExxonMobil have been given 30 days to address their obligations under various agreements on the country's first liquified natural gas project or face legal action to shut the project down.
The newspaper, The National, says the ultimatum was given in a petition handed to the Minister for Commerce and Industry, Richard Maru, by the Hela provincial governor Anderson Agiru.
The petition lists nine failures on the part of ExxonMobil and over 20 against the government.
Mr Agiru says he has no choice other than to declare the ultimatum because of the negligence of both parties to undertake their obligations to help develop the province.
The Minister, Richard Maru, has promised to bring the petition to the cabinet's attention next week.