Monthly Archives: September 2019

PNG to seek more from Exxon on P’nyang deal than Total’s Papua LNG

“It has to be better. It has to be far better. That’s the key point.”

Jessica Jaganathan and Sonali Paul | Reuters | September 25, 2019

Papua New Guinea will press Exxon Mobil Corp for “far better” terms on its P’nyang gas project than the government secured in a recent agreement with Total SA for its Papua LNG project, the country’s petroleum minister said.

The P’nyang field will help feed an expansion of Exxon’s PNG LNG plant. If negotiations for the project are protracted, that could delay Exxon’s $13 billion plan with Total’s Papua LNG to double the country’s liquefied natural gas exports by 2024.

Talks on P’nyang were put on hold earlier this year when the government sought to revise Total’s Papua LNG agreement. That deal was finally endorsed in early September, with minor concessions from Total.

Formal talks on the P’nyang project have yet to begin, with the government waiting for information from Exxon, PNG Petroleum Minister Kerenga Kua told Reuters on the sidelines of the annual LNG Producer-Consumer conference in Tokyo.

Asked whether the government would seek the same terms from Exxon on the P’nyang project as it secured from Total, Kua said: “It has to be better. It has to be far better. That’s the key point.”

Exxon Mobil, which is also a partner in the Papua LNG project, said it is looking forward to working with the PNG government to conclude the gas agreement for the P’nyang project ahead of decisions on design work for the addition of three new processing units, called trains, at PNG LNG.

“The verification of the gas agreement for the Papua LNG project confirms the commitment of all parties to make the project a success and provide value for all stakeholders,” an Exxon Mobil spokeswoman said in emailed response to Reuters when asked to comment on Kua’s remarks.

The push to extract more benefits from the P’nyang project is part of a wider effort by PNG’s new government to reap more rewards from the country’s mineral and petroleum resources to lift the country out of poverty.

Kua said the government would begin working with foreign investors next year to review natural resource extraction laws, which mostly stem from before PNG won independence in 1975.

The country is already in the process of revising its Mining Act, and next year will look to update its petroleum legislation to match regulations in other nations that produce LNG.

“In early 2020 the government will look at such changes in our regulatory set-up in close consultation with our development partners,” Kua said at the conference.

“This consultation is necessary to ensure Papua New Guinea is walking forward in lock-step with its investors,” he said.

“Whilst attracting FDI (foreign direct investment) in the oil and gas sector, reaping and sharing the rewards involving this valuable resource must be equitable to our development partners, investors, and the host government and its people.”

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Filed under Financial returns, Papua New Guinea

Governor speaks on Frieda Mine Situation

I am not confident that CEPA has the capacity or the capability to properly and professionally review the EIS

Allan Bird | via Facebook | 26 September 2019

My position has been consistent from day one. While I appreciate the riches and the proposed business model for the mine, my bottom line is the safety of the Sepik River. If the safety of the river cannot be guaranteed, then we can’t mine until there is technology available that can do this safely.

The Sepik River is not just a supplier of fish, turtles, prawns, eels and crocodiles. It’s a spiritual icon for all of us. My people also came from the river. We can substitute the animals from the river with other proteins but the Sepik is one the of last unspoilt rivers in the world, perhaps the only last remaining unpolluted river. There is no substitute for the Sepik River.

Governments of the past have pursued economic growth at the expense of the environment. We can’t afford to do the same. We have to exercise great responsibility. We live in a world of climate change and massive environmental degradation. We would be stupid to go down the same road and knowingly destroy our environment in exchange for money.

Early this year, I gave a direction that the Special Advisory team that has been in touch with us be activated to work on the EIS to provide independent advice to the Provincial Government. I have waited patiently for the mining desk to do this through the office of the Administrator and I have been following up diligently. Unfortunately, this has not eventuated.

Yesterday I discovered that our mining desk may have compromised their position by certain actions they have taken without informing the PA. The independence of the mining desk has now been brought into question. This won’t do.

This agenda is critical but it seems certain public servants do not appear to place the same level of urgency or exercise wisdom and good judgement on matters that are of serious public importance.

Given the lack of response to our queries from CEPA I am not confident that CEPA has the capacity or the capability to properly and professionally review the EIS. The responsibility for the safety of the Sepik River rests with the ESPG and the Sepik people. It is our responsibility and we take that responsibility very seriously.

Effectively immediately, I have requested the PA to convene our advisory team and there will be a lock up to fully review the EIS. At the end of this process we will give a response to all parties based on our assessment of the EIS. I will be personally taking charge of the team.

It is our wish to portray to all investors, particularly those who are coming for Agriculture and other businesses that ESPG is not anti- business. That we are intelligent and we will discharge all our responsibilities in a manner which is professional and fair and that all businesses will be subject to the same rigorous process when the safety of the environment and the livelihoods of ordinary people might be at risk.

On behalf of the ESPG, can I ask all our people to remain calm during this period. For Frieda Mine to proceed, two approvals are critical, the approval of the WSP Assembly and the ESP Assembly.

I assure all our people the approval from our Assembly will not be done hastily but with prudence and wisdom. We have not reached a stage where we have sufficient evidence to give our approval and that is where the matter remains.

Our silence does not signify approval. It signifies that we understand that we have a responsibility to demonstrate professionalism in the conduct of our work. Since we do not fully understand the EIS, we would be irresponsible to comment on it and make a case one way or the other.

Yupla trustim mi na yupla givim mi displa wok.

Mi askim yupla long belisi na noken wokim stupid blo yumi. Yupla wanbel na larim mipla kisim ol experts long mekim displa wok. Nogat wanpla longlong man, aipas man o yaupas man holim ol displa wok.

Trustim mipla long mekim displa wok. Em tasol mi askim yupla olgeta.

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Filed under Environmental impact, Financial returns, Human rights, Papua New Guinea

Morobe To Focus On Developing Small Scale Mining

Jerry Sefe | Post Courier | September 24, 2019

Morobe Governor Ginson Saonu has set the course for the Morobe Provincial Government and its administration to focus on building small scale mining in Morobe Province.

Mr Saonu when attending a small scale mining consultation workshop in Lae said he would direct the Morobe provincial government (MPG) and the administration (MPA) to assist miners at the end of October 2019.

“We will also table crucial agenda on the developing small scale mining in Morobe Province through Provincial Executives Councils (PEC) together with the 2020 Provincial budget presentation in December as well,” said Saonu.

He said it has always been his dream and desire before he became a politician to create opportunities for small scale mining that are properly developed into a sustainable and robust business income stream for small scale miners.

He said successful millionaires in alluvial mining were on the rise because they were taught to use improved small-scale mechanized alluvial mining techniques, supported by respective government agents and the list goes on.

“I want to see the same for all small scale miners in Morobe become somebody living and enjoying luxury lives.

“I expect a provincial policy, strategies and better management approaches to support our small scale miners.

“As far as I am concerned MPG is committed to support small scale miners in any capacity to make them become successful and this must start this year” Saonu said.

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Filed under Financial returns, Papua New Guinea

Trans Tasman Resources’ fight to mine South Taranaki Bight back in NZ court

Whanganui doctor Athol Steward was joined by supporters in the last stretch of his walk from Raglan to Whanganui in 2017 to protest seabed mining. Photo / File

New Zealand Herald | 25 September, 2019

A mining company’s fight to dig for ironsands off the coast of Taranaki began again on Tuesday in court.

Trans Tasman Resources (TTR) was granted consent in 2017 to dig up to 50 million tonnes of sand off the South Taranaki Bight seabed each year, extract the iron ore from it, and dump the residue on the sea floor.

That consent was overturned by the High Court last year, after it was fiercely opposed by environmental groups including Kiwis Against Seabed Mining, Greenpeace, and Forest and Bird.

The crux of the argument in the Court of Appeal on Tuesday centred on whether a raft of conditions that were issued with the marine discharge consent, amounted to an “adaptive management approach”.

Adaptive management is a provision that allows for an activity to still go ahead, even if the information about its effects is unknown, or incomplete.

It can also be described as learning by doing, and adjusting the way something is done once more information becomes available.

Under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act (EEZ) an adaptive management approach cannot be considered for a marine discharge consent.

The High Court found the conditions imposed alongside the consent, did amount to adaptive management, which is what TTR’s lawyers argued against on Tuesday.

Justin Smith QC told the court the conditions were no different to conditions imposed on other consents, in that if they were breached “you’re out”.

He said if it was adaptive management, the Environmental Protection Authority’s (EPA) Decision Making Committee (DMC), which approved the application, would have known.

“The DMC was more than conscious of what adaptive management is and the [EEZ’s] prescription of its use for the purposes of discharge consents.”

“This matter was considered and considered quite carefully.”

But the respondents disagreed.

Lawyer Richard Fowler said the combination of the 109 conditions did amount to adaptive management because it required TTR to make changes once more information was gathered.

He also said some of the conditions did not have “hard limits” meaning there was no clear way to know if they had been breached or not, so was different to a regular consent.

Lawyer for Forest and Bird Martin Smith told the court the DMC was provided with information that contained significant uncertainties about the state of the current environment and the effects of the proposed activity.

“The conditions allowing adaptation were imposed in response to [a lack of information] so that info could be gathered and the activity adapted accordingly. That is the kernel of adaptive management.”

The appeal this week is the latest in a long string of litigation for the parties.

TTR initially applied for consent to mine in 2013, the Environmental Protection Authority refused the consent in 2014, but granted it when TTR re-applied in 2017.

Last year a number of environmental groups, including Kiwis Against Seabed Mining, Greenpeace and Forest and Bird fought the consent in the High Court and won.

In September last year the company sought leave for this week’s appeal, which will continue to be heard on Wednesday and Thursday.

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Solomon’s PM urged to impose duty on APID  

MV Solomon Trader oil spill on Rennell Island, Solomon Islands. Photo: The Australian High Commission Solomon Islands

MAKILI: TAX THE MINERS

Ian M. Kaukui | Solomon Star | 25 September 2019

PRIME Minister Manasseh Sogavare has been urged to revoke the 100% tax exemption duty granted to the bauxite miners on Rennell island, Renbel Province.

The bauxite mine is owned by Chinese logger APID Ltd, which had contracted Hong Kong-based company Bintan Mining, to carry out the operation.

Local activist Lawrence Makili said if the Government is looking for money to fill its coffers, Prime Minister Sogavare must remove the duty exemption the miner has been granted.

“There are lots of areas we can earn our own money as a country if we are led by responsible leaders,” Makili stated.

“These include using our own resources to stimulate economic developments and one of them is the imposing the right tax on foreign businesses operating here,” he added.

“Yet, we see a foreign investor coming in and get our resources freely out of the country.”

Makili said the resources belong to the country and it should be utilised for its economic benefits.

He said despite the call being made previously, the Government continues to allow the miner to enjoy the exemption, much to the loss of this country.

In his speech at the recent Australia-Solomon Islands Business Forum, Sogavare said the government through the Ministry of Finance and Treasury is now working on a tax policy review.

“The Government is opened to inputs and dialogue in this area and will bring to Parliament the Tax Administration Bill, Customs and Exercise Bill and Value Added Tax Bill,” he said.

He said this is not going to happen in this year’s meeting but in 2020 Parliament meeting.

Sogavare said he is also conscious of how tax regime is affecting the private sector especially after Solomon Islands Tobacco Company (SITCO) and Solomon Breweries Ltd (Solbrew) paid him a courtesy visit. 

“We had a very informative and fruitful discussion and it was really interesting to hear their views with regards to excise taxes, and how they can assist in working together with the Government to ensure a win-win situation for all. 

“After this discussion, I realised that our tax regime in this instance has resulted in the government losing out millions of dollars. I have since instructed my staff to work closely with other relevant ministries to address look at other options,” he added.

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Pressure on MRDC to come clean on LNG revenue

Isaac Lupari chairs MRDC where “everything it does is shrouded in secrecy”

Mekere Morauta | PNG Attitude | 25 September 2019

The Mineral Resources Development Corporation (MRDC) needs to publish up-to-date audited details of its group finances since PNG LNG gas production began in mid-2014.

MRDC manages landowner equity interests in both mining and petroleum projects and is chaired by chief secretary Isaac Lupari.

It is estimated that almost K1 billion in landowner royalties has flowed into its coffers since then, but virtually none of that money has reached its rightful owners.

And, contrary to claims by MRDC last week, I am advised that the company has not paid any dividends on the investments it has made on behalf of landowners from their royalty payments.

Hundreds of millions of kina have been invested, but are these profitable, sound investments?

MRDC can make flowery statements, empty promises and false and irrelevant denials, but the fact is that, without publishing its accounts, it cannot prove what it says is true.

It cannot demonstrate that it is operating according to the law, or that landowners are receiving a fair return on their funds.

MRDC’s independent auditors have refused to sign off financial statements. The auditor-general has refused to sign off financial statements. And MRDC has not supplied financial statements to the auditor-general or the Investment Promotion Authority as required.

This is why it is so important that the public inquiry into MRDC proposed by prime minister James Marape goes ahead as soon as possible. In the meantime MRDC should immediately come clean on the state of its finances.

It is in the landowners’ interests that current information verified by independent auditors and the auditor-general is made available.

Failure to supply that information will only heighten public suspicions that all is not well at MRDC. Has there been waste, abuse and mismanagement? The public, as owners of this state corporation, has a right to know.

The information required includes details of trust accounts and other accounts holding landowner funds, the cost and current value of MRDC’s investments, returns on those investments to landowners, withdrawals of landowner funds and details of board approvals for them, payments to all directors and management, fees charged by MRDC to subsidiary companies, and payments to suppliers.

A media release issued last week by MRDC consisted of spin and misinformation. The dividends the company claimed to have been paid are not dividends from MRDC’s investment of landowner funds. They are dividends paid from underlying resource projects as a result of equity participation negotiated by the State.

Nor can MRDC legitimately claim any increase in asset values because its financial statements have been called into question by its independent auditors and the auditor-general.

The value of MRDC’s investments using landowner funds is singled out for criticism by its auditors and the auditor-general. There are other question marks over short term deposits, receivables, related party balances, income tax and financial statement disclosures.

Other comments made by MRDC have an equally unsound basis – none of the documents or processes it refers to in its media release are open to public scrutiny. MRDC, unlike most other state-owned enterprises, does not even have a website.

Everything MRDC does is shrouded in secrecy. It has not provided up-to-date information or full information or even correct information for years.

Now is the time to provide it.

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Filed under Corruption, Financial returns, Papua New Guinea

Cooks opposition appalled at dumping of marine conservationist

Jacqui Evans Photo: Goldman Environmental Prize

Radio New Zealand | 25 September 2019

The Cook Islands Opposition Democratic Party says the dumping of Jacqui Evans from the Marae Moana is appalling.

The party leader, Tina Browne, said by removing the world-renowned environmentalist the government has a reached an all-time low.

She said it is completely unacceptable for the government to do this to a highly qualified, passionate Cook Islander who has dedicated most of her life to the protection of the ocean.

Ms Brown said she is aware that Ms Evans didn’t back the government on its plans to ignore the regional call for a 10-year moratorium on seabed mining.

She said the government instead wants to fast pace mining within the Cook Islands EEZ.

The Cook Islands Government has not yet explained why it took the action it did.

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