Tag Archives: Exxon-Mobil

LNG landowners stopped when trying to damage office

Hides Gas Conditioning Plant in Papua New Guinea. Photographer: Richard Dellman via Exxon Mobil Corp.

The National aka The Loggers Times | November 23, 2018

POLICE managed to stop landowners from damaging the Petroleum Department office in Port Moresby on Wednesday, according to the National Capital District/Central police commander Assistant Commissioner Donald Yamasombi.

“A fight between two landowner groups at Konedobu at about midday was believed to be over the frustration of the delay to their royalty payments,” Yamasombi said.

“Police were called in and they dispersed the crowd and some arrests were made. They have been detained at the Badili police station”.

Meanwhile, acting Badili police station commander Chief Sergeant Paul Angua said 32 landowners were arrest and detained without being charged for two days. “Although it is alleged to be breaching their human rights, we cannot release them unless the complainant, who is a Petroleum Department officer, writes to us to release them.”

However, Hides Petroleum Development Licence 7 umbrella chairman Erick Hawai said 32 landowners were detained at Badili.

“The issue got out of hand and the department staff injured and properties were damaged when a Hides project coordinator allegedly provoked the landowners,” Hawai said

He said hurtful words were uttered which angered the landowners and service providers resulting in a rampage.

“There were exchanges of stones, sticks, irons bars and fists, most of the landowners were injured and taken to the accident and emergency ward at the Port Moresby General Hospital”.

Hawai is appealing to Petroleum Minister Dr Fabian Pok and the acting Department Secretary Kepsey Puiye to intervene and settle the issue.

“This must be done within this month before more problems will emerge here n at Hides PDL 7 Project site in Hela,” Hawai said.

Angry landowners from PDL 1-6 entered the main gate in two truckloads and started throwing stones on the building, sources said.

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Papua LNG group signs MOU with Papua New Guinea

Rick Wilkinson | Oil and Gas Journal | 16 November 2018

The Papua LNG joint venture partners led by Total SA have signed a memorandum of understanding with the government of Papua New Guinea for development of the Elk-Antelope gas-condensate fields, known as the Papua LNG Project.

The scope of the agreement includes priority terms and conditions forming the basis for a gas agreement as well as a timeline for negotiation. The gas agreement is scheduled for finalization during first-quarter 2019.

The MOU follows the Papua LNG and the ExxonMobil Corp.-led PNG-LNG joint venture parties reaching broad alignment earlier this year on the preferred downstream concept for the next phase of LNG development in Papua New Guinea.

The plan involves the construction of three 2.7 million tonne/year capacity LNG trains on the existing PNG-LNG plant site at Caution Bay just west of Port Moresby. Two trains will be supplied with gas from the Elk-Antelope fields and the third train by gas from existing PNG-LNG fields and the yet-to-be developed P’nyang field in the Western Highlands. Together Elk-Antelope and P’nyang contain an estimated 11 tcf of undeveloped 2C gas resource.

The Papua LNG Project is based on the Elk-Antelope reseources in petroleum retention license PRL15 in the Eastern Highlands. Total has 31.1% interest, ExxonMobil has 28.3% interest acquired when it bought InterOil Corp. earlier this year, and Oil Search Ltd. has 17.7%. These percentages are after the state of Papua New Guinea has backed into the project for 22.5%.

Papua New Guinea Prime Minister Peter O’Neill labeled the MOU as “another historic moment for Papua New Guinea and the beginning of the development of the second LNG (Project) in our country.”

He said, “Today’s memorandum paves the way for us to enter into a project gas agreement which will be negotiated between the parties over the next 3-4 months and to be concluded by Mar. 31, 2019.”

Peter Botten, managing director of Oil Search which, like ExxonMobil, is a participant in both joint ventures, said pre-FEED downstream studies on the three-train development concept are well under way. The scope of the engineering work includes design, process, and layout optimization of the expansion concept from the gas inlet to the LNG loading arm.

“Work taking place includes the brownfield tie-ins, compressor driver selection, LNG loading and shipping, condensate treatment, storage and loading, and execution planning,” Botten said. “We expect this will underpin entry into the full FEED stage.”

Botten added that discussions between the government negotiating team and the P’nyang (PRL—3) joint venture are well advanced. “With an integrated FEED entry decision required to advance the three-train expansion at the PNG-LNG site, completion of the gas agreement between the government and the PRL-3 joint venture is expected to occur in a similar timeframe to the Papua LNG Project,” he said.

The recent MOU for Papua LNG was signed as a show piece for Papua New Guinea during the Asia Pacific Economic Conference (APEC) in Port Moresby in the presence of Papua New Guinea Prime Minister O’Neill and Total Chairman and CEO Patrick Pouyanne.

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Major Project Agreements Must Be Reviewed To Benefit PNG

There have been many complaints of a lack of benefits coming from the LNG project Photo: RNZI/Johnny Blades

The Current Business Model and Tax Concessions are Cheating PNG of Revenues and Landowner Benefits

Post Courier | November 15, 2018

In the period leading up to and eventual start of the multi-billion kina PNG liquefied natural gas (LNG) project in 2014, there was much fanfare and grandstanding of the promise/premise that the project would single-handedly transform PNG.

In fact, the project has delivered some much-needed tangible developments in terms of major infrastructure, additional employment and spin-off business opportunities as well as foreign exchange revenue. However, there are still many unresolved issues that demand National Government’s most swift and appropriate remedial action.

On October 30 2018, it was reported (Post-Courier) complaints by Paguale Kekero resources landowners association from Southern Highlands Province over benefits from the PNG LNG project. The report referred to major clans with population of over 2000 people “left in the dark on LNG project benefits” – royalty and equity payments.

Their complaints followed a public statement on October 25 2018 by Mineral Resource Development Company (MRDC) Managing Director Augustine Mano of PNG LNG pipeline landowners receiving benefits. The concerns relate to Paguale Kekero resource owners not signing any agreement in the Umbrella Benefits Sharing Agreement under the Greenfield and future generations benefits.

The Paguale Kekero landowners concerns are among numerous other claims and counter-claims, be the genuine, not genuine or combination of both. So, the over-orchestrated myth of massive and immediate socio-economic transformation in the livelihood of resource owners, others in the project area and PNG as a whole is increasingly becoming a far-fetch tale.

PNG-wide, similar sentiments have been expressed over resource ownership, equity participation and the sharing of wealth generated from mineral, oil and gas reserves. As more resource owners become aware of their missed opportunities, there is mounting support from indigenous people for greater benefit from what is taken out of their land and sea.

They are rightly doing so because if anyone, these people and their ancestors have been living on and off that land or sea for over 40,000 years from one generation to next. Whilst PNG authorities continue to grapple with this contentious issue, plans are afoot for the ownership of resources to be transferred from the State as is the norm currently to the resource owners.

There has also been numerous calls for a comprehensive review of existing memorandum of agreements (MOAs) with project developers and provinces they are located. Some serious questions remain unanswered in the manner in which past governments proceeded to signing certain major project agreements. In fact, these are still burning issues that need government action by way of review of project agreements.

In that way, many landowner related issues and concerns, equity participation, wealth sharing and tax revenue can be addressed and resolved amicably.

The government must take heed of these concerns and start reviewing major project agreements. The underlying objective must be to cater for increased local equity participation by way of buying shares in these big resource development projects.

On May 14 2013, former Public Enterprises Minister Ben Micah while answering questions in Parliament alluded to the loss of millions of kina in tax revenue resulting from tax exemptions. Mr Micah’s comments may not have attracted much attention, but what he said then is still relevant day and needs follow-up action. There is nothing wrong for the government to admit fault, but take appropriate remedial actions to correct any wrongs of the past in PNG’s national interest and benefit.

A government decision for comprehensive review of agreements the State had entered into with developers in major projects would be well-received and welcomed nationwide. There are numerous concerns and un-answered questions that need clarification for and on behalf of the majority PNG citizens.

Today, questions are still asked why the Ramu Nickel project agreement was signed in China.

What input did relevant PNG State agencies, including Justice and Attorney General, Department of Finance, Commerce and Industry, Customs and Internal Revenue Commission and the Madang Provincial Government have in the Ramu Nickel project?

In December 2013, some agreements were reached and the review of the Ramu Nickel agreement was concluded and signed by relevant stakeholders. That is exactly why reviews in all project agreements are necessary and should be done within the time frame specified in such MOAs.

It must be mandatory and strictly adhered to by all parties. Failure by any of the parties to that MOA should be made to heavily compensate any breaches. There need to be a review of the current business model of the PNG LNG Project.

The review must reveal how exactly PNG entities and individual citizens are benefiting from all segments of the PNG LNG Project.
As it is, PNG is mostly benefiting from only one segment of the project while foreign investors take away much of the profits generated from the other segments.

This is because at the time of signing the project agreement the government then rejected outright the professional and technical advice in adopting the business plan. The LNG Project was and still is far important to the future economic health and well-being of PNG. It single-handedly underpins the future economic advancement of PNG.

This was fully recognised by then government and the technical team was task to deliver the project within the ambit of this objective. The technical team was convinced that the business model for the LNG Project had to be structured in the way, so that PNG and landowners were drivers of the projects, rather than mere bystanders, if the above objective was to be realised.

Under the business plan recommended by the technical team, The National Government, provincial governments, local level governments, landowners and other PNG citizens were to have fully participated through share equity in all segments of the project.

This means, under the aborted business model, various PNG entities and groups would have invested and benefit in all segments from upstream, pipeline, processing facilities, shipping and marketing. Unfortunately, this one-in-a-life time investment opportunities for PNG citizens was denied when the government opted to adopting a totally different business model. There were serious concerns and perception among various stakeholders that the originally well-intended ideals of this project was hijacked.

The Ministerial Committee on the LNG Project appointed by the National Executive Council totally ignored and ultimately rejected the business model recommended by the technical team.

Under the current model, the State, provincial governments and landowners are to participate ONLY at the UPSTREAM, by exercising their 22.5 per cent rights under the Oil and Gas legislation. Other than that they have no participation or interests in other segments of the project, namely pipeline, processing facility, marketing and shipping.

Under the current business model, the State and the landowners are complete bystanders, with no tangible control and ownership in the project. This business model defeats original Government policy ambition as well as political and economic aspirations of PNG.

If is it not too late and so there should be review into the business model of the PNG LNG Project to allow the National Government, provincial governments, local level governments, super funds, national owned businesses and individuals to buy shares in all segments of the project.

The current business model must be re-structured to enable maximum participation of government, landowners, and provincial governments, in all segment of the LNG Project.

Allow PNG and its citizens to retain the majority ownership of the complete PNG LNG project chain.

The government should also review the substantial tax exemptions given to the PNG LNG project. This government is in the best possible position to carry out a thorough review of all tax and fiscal exemptions granted to the developers of the PNG LNG project.

Among the concessions for review should include:

  • 30 per cent Corporate Tax rate;
  • Waiver of the 2 per cent Fiscal Stability premium;
  • Foundation Volume pf 10.5tcf;
  • State Carry;
  • Excise and Import Duty Exceptions during construction phase;
  • Special Tax Credits;
  • Applicable Interest to State’s back-in Costs; and
  • Oil to Gas Tax rate Conversion.

The concessions could well have resulted in losses of hundreds of millions of kina in State revenue. The government is morally obliged and duty bound to direct for full review of all major projects so that shares are floated for PNG owned entities and individuals buy into the projects. Then only can PNG citizens boasting of benefiting from resources found in their land and sea. Otherwise so-called landowners and PNG people are fighting among ourselves for bones and crumbs.

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Fighting at LNG site poses threat to workers: Police

PNG Liquefied Natural Gas Plant near Port Moresby, Papua New Guinea.Photographer: Richard Dellman via ExxonMobil Corp.

The National aka The Loggers Times | November 5, 2018

POLICE are concerned that bad blood between a group of Highlanders and locals at the liquefied natural gas site in Gulf over a sorcery-related killing is posing a threat to the company.

Provincial police commander Inspector Silva Sika said the killing at an LNG site village had led to frequent rows and fighting, making it unsafe for the workers.

The deceased was originally from Lufa in Eastern Highlands.

“Police will be deployed again to the site to settle the situation and protect others from outside (the province) working there,” Sika said.

He said relatives of the deceased had attacked the suspect’s brother at the Wabo sub-station village.

Earlier they kidnapped four locals using guns and bush knives and destroyed gardens and crops. Police had settled the matter but trouble started again. Police said they had to make arrests but after few weeks tensions rose again between the groups.

“I have done peace and agreements between the groups but it suddenly started again,” he said.

The deceased was found floating in the river near the village close to the LNG site.

At least one person out of 10 accused of sorcery has been killed and one-third were permanently injured, a joint study by three universities in three provinces revealed.

The research recorded 357 sorcery accusation cases from Enga, Bougainville and Port Moresby between January 2016 and October 2017.

There were 185 victims and at least 20 people killed, with a large number suffering permanent physical injuries. Australian National University Associate Professor Miranda Forsyth said the study was undertaken by the university, the PNG National Research Institute and Divine Word University supported by the Australian government through Pacific Women Shaping Pacific Development Programme.

Forsyth said of the cases identified in Enga, at least 37 per cent of the incidents resulted in killing through the use of torture, followed by seven per cent of cases in Bougainville and four per cent of cases in Port Moresby.

She said that four per cent of cases in Enga resulted in tribal fighting.

The study revealed that 63 per cent of the total in Enga resulted in major physical violence and so did 36 per cent in Bougainville and 31 per cent in Port Moresby,”

Sixty-seven per cent of the cases in Enga resulted in the burning of the accused, seven per cent in Bougainville and eight per cent in Port Moresby.

Other forms of accusation included forced imprisonment, damage of property, threats, minor physical violence and clothing removed.

The PNG government developed a comprehensive sorcery and witchcraft accusation-related violence (SARV) national action plan in 2015 to address the problem of sorcery accusation-related violence.

The Australian government is working in partnership with Papua New Guinea in all core areas through the Pacific Women Shaping Pacific Development Programmeand justice services and stability for development programmes.

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Upstream LNG Landowners ‘Left In The Dark’ On Benefits

There have been years of complaints of a lack of benefits coming from the LNG project. Photo: RNZI/Johnny Blades

Simon Keslep | Post Courier | October 30, 2018

The Paguale Kekero Resources Landowners Association of Southern Highlands province has raised their concerns regarding benefits of the Liquefied Natural Gas project.

Yesterday association general sectary Paul Kewai Ipakasa and chairman Simon Kayako told Post-Courier their people especially 11 major clans including a total population of over two thousand people are left in the dark on LNG project benefits (royalty and equity payment).

They were referring to statements by Mineral Resource Development Company managing director Augustine Mano and published by this paper last week (October 25, page 20) “PNG LNG pipeline landowners to receive benefits-MRDC.”

The two raised concerns on issues regarding no agreement signed by them under the Umbrella Benefits Sharing Agreement despite gas pipelines under the Greenfield and future generation’s benefits without guarantee.

“Since 2009 till now there were no agreements under Umbrella Benefits Sharing Agreement despite having gas pipeline passing through our land,” said Mr Ipakasa.

According to Mr Ipakasa they come under segment 4 and spin-off benefits for their future generations remains uncertain.

The two called upon MRDC to consider their issue and put business agreements in order especially to fully benefit landowners whose land has gas pipelines passing through.

In relation to Mr Mano’s comments in the article referred to, he explained that while the pipeline determinations have already been made by the minister in reference to the onshore 300 kilometres of the entire 400 km pipeline, those areas not in dispute are being processed and assisted for the flow of benefits.

“There are eight (pipeline) segments which ministerial determination has been made for those areas where there are no disputes.”

“These are the ones we are going to proceed with their preparations of opening up their account, appointment of their board and then start making payments,” Mr Mano said in the report.

He made comments in a previous interview that for upstream pipeline landowners it has been a huge obstacle and that MRDC was aware of landowner frustration, however, mentioned that the areas that are still in dispute will be overlooked and carry on with the ones that are not in dispute pending their outcomes.

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CEDAW and Extraterritorial Obligations: PNG Activists Highlight Australia’s Role in Human Rights Violations

Papua New Guinea activists Ruth Saovana Spriggs (left) and Sabet Cox in Geneva. Image still from forthcoming IWRAW Asia Pacific video

Nikta Daijavad | IWRAW

At IWRAW Asia Pacific’s most recent From Global to Local training programme, run in parallel to the 70th CEDAW Session, we were joined by two activists from a small group of Papua New Guinea women working to expose the gendered harms of Australia’s large-scale extractive industries – which have operated across many provinces of Papua New Guinea for five decades. Dr Ruth Saovana Spriggs (left, above) is the director of the Bougainville People’s Research Center (based in the Autonomous Region of Bougainville), and Elizabeth (Sabet) Cox (right, above) is a technical advisor to HELP Resources and Voice for Change (based in the Sepik and the Highlands regions of Papua New Guinea) and an emerging women’s organisation in Hela – the site of Papua New Guinea’s controversial vast and expanding gas fields in a context of underdevelopment and armed conflict. These four local NGOs were supported by Development Alternatives with Women for a New Era (DAWN), to prepare and submit a shadow report to the CEDAW Committee’s review of Australia, held on 3 July.

Ruth and Elizabeth focused their advocacy on Australia’s failure to meet its extraterritorial obligations (ETOs) in relation to its financing of, and development cooperation with, risky and socially and environmentally destructive Australian extractive companies in Papua New Guinea. In recent years, activists have increasingly called upon states to fulfill such obligations. Relying on the Maastricht Principles on Extraterritorial Obligations in the Area of Economic, Social and Cultural Rights, they argue that states are obligated to ensure that non-state actors which they are in a position to regulate, including private individuals and transnational corporations, do not violate human rights. The Women’s International League for Peace and Freedom, for example, submitted shadow reports on the extraterritorial obligations of SpainSweden, and France with regards to arms transfers for the 61st, 63rd, and 64th CEDAW Sessions, respectively. FIAN International similarly submitted a shadow report on the extraterritorial obligations of Germany with regards to coffee plantations owned by German transnational corporations that were illegally evicting peasant communities in Uganda (66th CEDAW Session).

In Australia’s case, the state has provided critical financial support to extractive industries that have been assessed as high-risk for social and environmental impacts. In Bougainville, for example, Rio Tinto of Australia operated the Bougainville Copper Limited mine between 1969 and 1989 – until tensions over the dumping of tailings in the Jaba River, grossly unequal benefit sharing arrangements, and an influx of migrants from other provinces eventually erupted into a decade-long civil war with the Papua New Guinea government, with military support from Australia. When a military response failed, Papua New Guinea imposed a total blockade on goods, services and supplies, resulting in the loss of an estimated 20,000 lives, and countless war crimes of sexual violence. Ruth’s research has revealed that local women lost their traditional matrilineal authority, especially in relation to land rights and decision making. They witnessed huge social and cultural upheaval, bore the brunt of a long armed conflict and barely received USD20 in cash benefits annually.

The Australian government’s secretive Export Credit Agency – the Export Finance and Insurance Corporation (EFIC) – provides critical loans to ‘close the deal’ on new projects operated by Australian extractive companies when risk-averse banks will not. In 2009 EFIC provided a AUD500 million loan to enable Exxon Mobil and joint venture partners Oil Search and Santos to proceed with a liquefied natural gas project in the remote Hela region, despite warnings that support for the project could exacerbate already-existing armed conflict and violence against women. The lessons from Bougainville and from a succession of mining disasters have not been learned, and the gas fields in remote Hela Province have created a nightmare situation for women. The gas project start-up ignored the land-based armed conflicts among men and the extreme forms of sexual and gender-based violence against women and girls. Worsening armed conflicts have undermined Hela’s rudimentary governance, service delivery and justice systems and rising impunity for daily murders, assaults and rapes.

Ruth and Elizabeth advocated four priority obligations of the Australian government:

  1. guarantees of women’s security and access to justice in areas impacted by Australian extractive industries, including establishing a complaints mechanism to provide reparations for past harms;
  2. Australian companies to undertake substantive gender analysis and to ensure women give free, prior and informed consent prior to extractive project start-up;
  3. institution of gender-equal benefit sharing in land-owning and impacted communities; and
  4. gender-equal access to jobs and training in Australian-owned extractive industry companies.

Throughout the process, women leaders from the remote Hela province in Papua New Guinea communicated daily with Ruth and Elizabeth, expressing their great hopes that their voices would be heard. They have since expressed their appreciation to the CEDAW Committee and the process.

During Australia’s constructive dialogue, Committee member Nahla Haidar directed incisive questions to the Australian state delegation regarding state loan financing of Australian extractive companies in Papua New Guinea and development grants to company-led corporate social responsibility projects for women. She noted, “There seems to be a failure to learn from the conflict in Bougainville … To what extent will the [Australian] government engage with the UN Principles on Business and Human Rights?” She reminded the delegation that its 2016 Universal Periodic Review had recommended that Australia adopt a National Action Plan on Business and Human Rights, and Australia had responded that it would consider further measures for implementation of the Guiding Principles on Business and Human Rights. This has not yet resulted in an adequate response.

The concerns highlighted in the shadow report on Australia’s ETOs are well reflected in Australia’s Concluding Observations. The Committee recommends that Australia develop a National Action Plan on Business and Human Rights, incorporating a gender perspective, ensuring that all large-scale extractive projects have obtained free prior informed consent from locally affected women, and establishing a specialised mechanism to investigate violations of women’s human rights by corporations based or registered in Australia or receiving subsidies from it.

Despite the lack of a clear commitment from the Australian delegation to address this issue, Ruth remains hopeful that highlighting the nature of Australia’s extractive industries in the international arena will eventually have a positive impact. As she said in our interview, “Unfortunately I was a little disappointed, but at least [the Australian delegation] heard it … And to me, it is a plus that [the issue] is at least registered at this level.” She also believes that continuing to strengthen the relationship between academic research and advocacy-oriented spaces like CEDAW will help bring to light the depth and complexity of the human rights violations taking place in Papua New Guinea.

Elizabeth added, “It’s given me hope that we can do more back in Papua New Guinea, and because the autonomous region of Bougainville is preparing for independence, [this] can be a new starting point for them to hold their independent government accountable to address the rights of women in the new state.”

Bougainville is slated to hold an independence referendum on 15 June 2019.

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Resource Agreements Unfair: Haiveta

Mayur Resources managing director Paul Mulder signing an agreement in 2017 with Gulf Provincial Governor Chris Havieta 

Post Courier | September 18, 2018

GULF Governor Chris Haiveta has told his people that current agreements for oil, gas and forestry were not negotiated in their favour.

Delivering his independence message in Kerema last weekend, Mr Haiveta said he wants all agreements under the UBSA and LBSA re-visited and re-negotiated.

He said he felt his people – the majority resource owners – had been short changed and robbed of their resources.

Mr Haiveta and his people hosted Governor General Sir Bob Dadae over the Independence long weekend.

He said: “Our province recognises that current resource agreements in oil and gas and forestry have not been negotiated in the province’s favour.

“This has meant that essential and strategic infrastructure like ports, towns and roads in the project areas have not been built, leaving the province, Kikori district where the projects are located, particularly to miss out completely.

“Therefore we are moving in this term of parliament to ensure that all these agreements are revisited and they are legally compliable and enforceable by all parties.

“We have resolved the UBSA and LBSA agreements including the Gulf landowners and Provincial Governments benefits from the existing Oil and LNG Pipeline to Caution Bay be re-negotiated.”

He said that for the future, ‘we will ensure that resources agreements are properly negotiated and drafted to include all necessary and possible infrastructure needs for the project areas, including the upcoming LNG, coal mining, limestone, mineral sand mining and timber harvesting’.

Mr Haiveta said: “We are glad the national government has started the process of devolution of powers from Waigani to provinces, and Gulf Province is poised to receive decentralisation of powers soon.

“As a step forward to this, we will be signing the Service Delivery Partnership Agreements soon which will pave the way for a synchronised delivery of services between the two open electorates and the provincial government.”

He said his people have abundant renewable and non renewable natural resources both on the land and in the seas.

“Our sea boundaries encompass an area that is twice our land mass, we have significant marine resources with reef systems such as Pocklington and Eastern Fields that remain unexplored commercially and for tourism.

“We also have the largest prawn fishery in the country which is exploited directly from Port Moresby.

“Our forestry industry composed from Port round logging exports brings little benefit to the province as it is a nationally controlled activity.”

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