Papua New Guinea appoints reformer to crucial petroleum portfolio

Kerenga Kua is a former attorney general turned prominent opponent of Marape’s predecessor, Peter O’Neill.

Tom Westbrook | Reuters | June 7, 2019

Commodity and energy companies with projects in the resource-rich archipelago have been awaiting the makeup of Marape’s cabinet as a sign of his plans, after parliament voted him in last week on a platform of economic change.Papua New Guinea Prime Minister James Marape installed a reformer as petroleum minister on Friday, handing him a mandate to overhaul the sector and warning investors to “pack up and leave” if they did not like it.

Announcing his ministries in the capital of Port Moresby, Marape said Petroleum Minister Kerenga Kua – brought in from the opposition – shared his vision for raising more revenue from the resources sector.

“We are tired of being rent collectors,” Marape told reporters at Government House where the cabinet was sworn.

He promised changes “friendly to the investor but also friendlier to our country”.

Marape had sparked months of political chaos when he quit as finance minister over the government’s handling of a big gas agreement struck in April with French oil major Total SA.

He then rode a wave of discontent over that deal, and an earlier one with ExxonMobil Corp, into the top office, triggering a new round of scrambling – this time from commodity firms clamoring to meet and lobby him.

Kua is a former attorney general turned prominent opponent of Marape’s predecessor, Peter O’Neill.

He has been quoted in the media as saying resource laws should be changed to give the state a bigger stake in extractive projects.

“(He is) widely respected and a noted critic of dodgy deals,” said Jonathan Pryke, director of the Pacific Islands program at Sydney think-tank the Lowy Institute.

Nevertheless, Marape has insisted reforms would be slow, unlikely to take effect until well beyond elections due in 2022, and not designed to harm investment.

Peter Botten, the head of PNG-focused energy firm Oil Search Ltd said in Sydney on Thursday he did not expect to make any significant new concessions on a gas deal it and ExxonMobil Corp hope to strike with the government.

Marape, referring to concern among foreign investors, offered both reassurance and a warning.

“I make no apologies to anyone,” Marape said. “You don’t like the way I’m speaking? Pack up and leave.”

“Peter Botten knows me. I am investor friendly. But I have also to win for eight million shareholders of this country and that’s what this generation of leadership is all about.”

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Filed under Financial returns, Mine construction, Papua New Guinea

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