Tag Archives: LNG

PNG’S RESOURCE CURSE: DOUBLE OR NOTHING REVISITED

Paul Flanagan | PNG Economics | 12 June 2019

Executive Summary

Do the controversial conclusions of the “Double or Nothing: The Broken Economic Promises of the PNG LNG project” report still hold? The broad answer is “Yes” – indeed the conclusions are re-enforced by recent economic data. Fortunately, PNG’s new Marape/Steven government is seeking better terms for future projects. It is too early to tell if it will make even more important but politically difficult policy changes to reverse the “resource curse” approaches of the O’Neill government.

  • Recent PNG National Statistics Office figures have confirmed that PNG Treasury was over-estimating the health of the PNG economy in 2016. The new figures increase the gap between PNG LNG promises and actual outcomes relative to “business as usual” prior to the PNG LNG project (see “statistical details” section below for detail).
  • At a more detailed sectoral level, there is a mixed story with sectors such as health not doing as badly as thought (now ‘only’ minus 27%) but manufacturing doing worse (now minus 32%). The average outcome remains that PNG’s industries were just over one-fifth worse off in 2016 than if they had simply continued the “business as usual” growth prior to the PNG LNG project.
  • Overall, the PNG LNG project massively over-promised and then failed to deliver. This is not because of the fall in oil prices – indeed LNG export returns are higher than predicted.
  • Resource projects on good terms should be good for development – but this requires good policies. The PNG LNG project induced poor policies under the O’Neill government. These poor policies have overwhelmed the potential PNG LNG benefits.
  • The O’Neill government made little progress on the four recommendations from the report designed to address the broken promises of the PNG LNG project (see below). This probably contributed to its fall.
  • There are encouraging signs that the new Marape/Steven government is seeking better returns from its resources. Hopefully, it will also pursue better policies in other policy areas such as competition policy and devaluing the exchange rate to deal with the resource curse. But these will be politically difficult.

Details

The release of national accounts information by the NSO in April shows lower GDP and non-resource GDP (a proxy for household incomes) in 2016 relative to the PNG Treasury forecasts used in the earlier analysis. This has the effect of increasing the gaps between the PNG LNG modelling predictions, and actual outcomes. Specifically, the PNG LNG modelling had projected an increase in GDP of 97% two years after production had commenced. The actual outcome relative to the pre-PNG LNG “business as usual” case was a 6% increase – down from 10% in the initial report. For household disposable income, the prediction was an 84% improvement. The outcome is a decline of 9%, larger than the decline of 6% estimated in the earlier report. Using updated Bank of PNG figures on employment, the prediction was an increase of 42%. The outcome is now estimated as a fall of 26%, slightly smaller than the 27% decline in the earlier report. There is no new data on exports, imports and government expenditure.

The following graph updates that on page 6 of the Executive Summary of the initial “Double or Nothing” report. It contrasts PNG LNG predictions with actuals all relative to the pre-PNG LNG undergrowing growth path (or ‘business as usual’ growth case which was running at 5% growth per annum).

Of course, many people have benefited from the PNG LNG project such as local transport, catering and security firms, the support for local health and education facilities, the work of project partners in responding to the 2015 drought and 2018 earthquake, some tax and dividend revenues, and some landowner benefit payments (although see a related Jubilee Australia report “On Shaky Ground” (see here) which discusses some adverse local impacts and broken promises at the local level). However, taking a helicopter view of the entire economy, household incomes, government expenditures, employment and import levels were worse by 2016 than if the pre-PNG LNG underlying ‘business as usual’ growth trends had continued.

The reasons for failing to deliver had nothing to do with the fall in oil prices in late 2014 – see here (although a continuation of historically high oil prices would have helped). Indeed, as shown by the first columns in the above graph, the PNG LNG project is actually earning more in export incomes than initially projected. The reasons for failure are linked to the O’Neill government’s policy shortcomings in not addressing the well-known “resource curse” risks of a major resource project:

  • a 50% build-up in spending before revenues flowed that has led to the largest on-going budget deficits in PNG’s history;
  • crippling foreign exchange shortages due to poor exchange rate policies;
  • a failure to put enough policy effort into other critical sectors of the economy;
  • unwise state investments such as the Oil Search purchase funded by the UBS loan; and
  • growing corruption.

As documented in Chapter 5 of the earlier report, the O’Neill government continued to ignore local and international warnings that PNG LNG required appropriate policies to manage the possible adverse impacts on other parts of the economy once the construction phase was completed. PNG slid into classic resource curse policies. Indeed, those making such warnings were often attacked – a classic case being when Isaac Lupari accused me of being unprofessional and working for former Treasurer Don Polye when all I did was to correctly claim that the fall in oil prices in late 2014 would affect 2015 budget revenues. His claims that PNG would largely be sheltered from such falls was false as was his claim that I was still working for Don Polye (although I admired Don Polye including for his stand on the UBS loan and I did work for Polye as a public servant when he was Treasurer). If such warnings had been listened to, the O’Neill government could have made a more rapid fiscal response which would have lessened PNG’s current debt burden.

The “Double or Nothing” report was condemned as “utter nonsense” by former Prime Minister O’Neill (even though he subsequently admitted to the press that he hadn’t read it). Oil Search CEO Peter Botten promised to subject the report to “rigorous analysis” by an independent accounting firm to “demonstrate that there are some serious flaws in the Jubilee report”. This was not done, or at least the findings have not been released over the last year. Fortunately, former Treasurer Charles Abel did acknowledge that project returns were indeed below par. More recently, the Papua LNG project partners have been more cautious in selling the latest project and we do not have the black magic PNG-GEM model making more overly-optimistic promises. However, the PNG public still does not have access to the economic modelling behind such key claims that the Papua LNG fiscal agreement “divides the net free cash flow 50/50 between PNG and Total led developers”. More transparency is required.

It is encouraging that the new government appears to be taking a more balanced approach towards the resource sector and its potential contribution for inclusive development. Prime Minister Marape’s discusses PNG’s resources as going beyond minerals and gas to agriculture, forestry, fisheries and human resources. Given his strong legal background, including as a former Attorney General, appointing Kerenga Kua as the new Petroleum Minister should help address local concerns about current and prospective LNG agreements.

There is also positive language on gauging views on what needs to be done to create a healthy economy even if it means he doesn’t make many friends (see here). The strong stance on corruption is welcome. However, some policy corrections to move away from the resource curse will be extremely challenging politically. For example, PNG has an over-valued exchange rate which acts as a subsidy on all imports and a tax on all exports. It reduces incomes for rural households yet lowers the cost of living especially in urban areas (the latter because more consumption is imported). However, urban elites appear to have a stronger voice in PNG than the much more numerous rural poor. PNG has also moved away from competition and trade policies that would balance the resource sector and allow PNG to benefit from its strategic location in the Indo-Pacific region. Policies such as high tariffs to protect local manufacturing are understandable but economic history shows the costs for the many outweigh the benefits for the few. These are two examples of the vexed political economy challenges facing the new government. Addressing such policies are critical to addressing PNG’s resource curse. They are at least of equal importance as getting a better direct benefit return from resource projects. Time will tell if the new government will tackle such difficult political economy challenges, challenges that must be addressed to make PNG a much richer black Christian nation.

My next article will explore the different economic impacts of the construction phase and the production phase of large resource projects. The dramatically different economic impacts across these two phases could help explain why former Prime Minister O’Neill wanted to push through the Papua LNG project against the advice of his local team.

Recommendations Re-visited

The “Double or Nothing” report included four recommendations for the PNG government.  One year on, how have they gone? Following are the four recommendations, with some comments on progress shown in italics.

1. PNG should return to more inclusive development policies while better managing the resource curse. There is a need to address the overvalued exchange rate, ensure the new medium-term fiscal plans are implemented in a  transparent fashion, and re-design the SWF to ensure all resource revenues flow to the budget.

As noted above, there are some positive messages that the new government may consider action in such policy areas. Over the previous year, there had been no improvement in managing the exchange rate (the sovereign bond did not address the underlying issues), the medium-term fiscal plans faced major inconsistencies between the 2019 Budget Strategy and the actual 2019 Budget, and there was little progress on the SWF (which needs to be redesigned anyway).

2. PNG should establish a clear policy framework for all future resource projects (and extensions) that ensures PNG gets a better and earlier share of the resource pie than current agreements. No new resource projects should be approved until this framework is completed and publicly released.

This was not adequately done prior to the Papua LNG agreement. While the new deal has improved some elements of the PNG LNG deal, there clearly was a lack of internal agreement as to whether enough extra had been gained.

3. Projects should not be approved without the production and release of transparent, verifiable, contestable and independent economic modelling by the government; this modelling should include a completely new independent model that includes net costs to the budget.

Fortunately, there was little PNG-GEM spruiking of the new Papua LNG project. However, it did appear to be making claims of future revenues as well as benefit sharing that were not verified by transparent figures or modelling.

4. PNG should urgently clarify some of the confusing figures in the most recent EITI reports that royalties and development levies paid by ExxonMobil are not being received, and explanations provided as to why the level of what should be identical payments are so different.

EITI continues to do a good job in PNG given data limits. However, key information such as the Kumul Petroleum Holdings annual accounts have not been released. Recent data indicates that PNG Treasury had been claiming as “dividend revenues” funds that were actually just “advances” financed by loans from BSP.

Overall, progress against the four recommendations had been poor. That said, it is quite possible that the original report helped confirm and strengthen views in PNG that future projects needed considerably better deals. As stated a year ago “As the government considers this report, there are potential benefits for PNG in terms of encouraging public discussion about PNG’s future options and even supporting PNG’s negotiating hand with the LNG companies. Hopefully, with the benefit of hindsight, “fake news” comments will fade and true benefits will be understood.” Given developments over the last month, possibly the O’Neill government didn’t deal adequately with the broken promises of the PNG LNG. The new government appears committed to not repeating that mistake in terms of benefit sharing. Time will tell if it will also address the crucial underlying “resource curse” policy issues.

Statistical background

The PNG National Statistics Office released updated national account figures for the PNG economy on April 10 2019. This release included detailed figures for 2015 and 2016. The new numbers would be more robust that the earlier PNG Treasury estimates, although they are likely to still be too high. The release also provided consistent figures for 2006, but these did not include new growth rate figures for 2006. If it had, this would have allowed a re-estimation of underlying growth rates which had been based on the three years growth rates for 2007 to 2009. Given that 2008 was actually a year of recession according to the NSO (with growth falling by 0.3%) the inclusion of 2006 information is likely to have lifted the estimate of “business as usual” real GDP growth to slightly above 1.7% per annum in per capita terms, or 4.8% without taking population factors into account. More detailed justification around the “business as usual” growth rates are provided here. The next article will also provide some sensitivity analysis around “business as usual” growth rates.

Using the same methodology as outlined in appendix 2 of the earlier report, three actual 2016 values are updated (shown in green in the following table). These lead to three updated figures for the difference between what the 2016 value would have expected to be if “business as usual” pre-PNG LNG situation continued and the actual 2016 value.

The updated story at the sectoral level also produces slightly worse outcomes. The following table sets out the expected sectoral impacts from the PNG LNG modelling in the second column. The third column covers the gap between the underlying sectoral ‘business as usual’ growth path and the available PNG Treasury figures for 2016. The fourth column uses the recently released 2016 NSO data (except for agriculture exports which continues to use BPNG data). Some sectors have not done as badly as set out in the initial report. For example, the health sector has “only” declined by 27% when the original estimate was a decline of 33%. Other sectors have done worse. For example, the manufacturing sector has declined by 32% rather than the initial estimate of a decline of 23%. The overwhelming story remains – all sectors in the PNG economy outside of the petroleum and LNG sector have gone backwards relative to their underlying ‘business as usual’ growth performance prior to the PNG LNG project. The average decline is now 23%. This is an extraordinary missed opportunity with poor policies pushing PNG away from the “business as usual” pre-PNG LNG case. It is also a remarkable contrast to the foreshadowed gains averaging 36% from PNG LNG partners.

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New PNG cabinet puts Oil Search and UBS Australia on notice

PNG PM James Marape unveiled a surprisingly bold cabinet on Friday.

Angus Grigg and Lisa Murray | Australian Financial Review | June 7, 2019

Papua New Guinea’s new Prime Minister, James Marape, has appointed one of the most outspoken critics of a recently signed gas deal as the responsible minister and taken a swipe at Australia’s Oil Search in announcing a cabinet full of surprises on Friday afternoon.

In swearing in Kerenga Kua as the Minister for Petroleum, Mr Marape noted he was a lawyer who “shared his vision” for reforming the sector and maximising gains for PNG.

Mr Kua has previously said the $US14 billion ($20 billion) Papua LNG project, agreed in April, should be reviewed for its legality, potentially opening the way for the deal to be renegotiated.

The new Prime Minister has said he would not seek to unwind existing contracts. However, looking into the legality of this and other deals could be a way to reopen negotiations.

“We will come to a position that everyone is comfortable with without disrupting business,” Mr Kua said when asked about the Papua LNG project after being sworn in.

“But [we will] ensure there is an equitable distribution of benefits which come out of these resource projects.”

Mr Marape used the occasion to take aim at Oil Search chief executive Peter Botten, following a speech Mr Botten made in Sydney on Thursday.

“Peter Botten knows me. I’m investor friendly but I also have to win for the 8 million shareholders of this country,” he said.

Prior to this the Prime Minister said he would not apologise for his comments on getting a better deal for the country out of resource projects.

“If you don’t like the way I’m speaking … pack up and leave,” he said.

This skirmish follows Mr Botten saying that any delay in the Papua LNG project would have it leapfrogged by other projects around the world.

“We can’t wait too long before our place in the queue slips,” Mr Botten said. “The government is aware of this, as is the new Prime Minister.”

ExxonMobil and Total are spearheading the PNG LNG and Papua LNG projects, in partnership with Australian resources players Santos and Oil Search.

Shining a light on corruption

The other surprise move on Friday was the appointment of Bryan Kramer, a popular but outspoken opposition figure, as Police Minister.

Mr Kramer, who has over 117,000 followers on his Facebook page, has said former prime minister Peter O’Neill should face criminal prosecution and has written scathing articles about the UBS loan affair.

He said the deal, which had PNG borrow $1.2 billion from UBS to buy into Oil Search, would “go down as one of the dumbest investments in PNG’s history”.

His appointment should ensure ministerial-level support to further investigate the loan affair, which cost PNG $400 million.

On Friday, Mr Kramer said his main priority was keeping the people of PNG safe but he would also be looking at high-level corruption.

Shane McLeod from the Lowy Institute said Mr Marape had delivered a pointed and substantial shake-up of the ministry.

“Bringing across prominent opposition voices Kerenga Kua and Bryan Kramer – and placing them in key portfolios of Petroleum and Police – shows that Marape is serious about distancing himself from his predecessor, and shining a light on resource deals and allegations of corruption,” he said.

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Oil Search CEO says new PNG leader unlikely to demand big concessions on gas deals

Oil Search CEO Peter Botton

* Oil Search CEO confident on Papua LNG, P’nyang deals

* Comments follow PNG PM vowing to raise revenue from resources

Jonathan Barrett | Reuters | 6 June 2019

The head of Papua New Guinea-focused energy firm Oil Search Ltd said he did not expect to make any significant new concessions on a gas deal it and ExxonMobil Corp hope to strike with the South Pacific nation’s new leader.

Commodity and energy firms with projects in the resource-rich archipelago like Oil Search have been closely watching the agenda of Prime Minister James Marape since his election by parliament last week on a platform of economic reform.

A policy speech Marape made on Wednesday offered investors some relief as he said changes would be slow.

Oil Search managing director Peter Botten told the Sydney Mining Club at a lunchtime address that the P’nyang gas agreement, which has yet to be finalised, would resemble a deal already brokered on the Papua LNG project led by Total .

“I don’t envisage there will be any changes to the Papua LNG gas agreement,” Botten said, meaning the P’nyang agreement would be unlikely to see major change either.

“I am confident about that (but) I’m not 100-percent confident because I need to sit down with the government, as does Total as operator.”

Oil Search has previously said it hopes to agree terms for P’nyang this month.

Marape, a former finance minister, has promised he would be “taking back” the economy and revising resource-sector laws after the resignation of his predecessor, Peter O’Neill.

Marape said on Wednesday that he wanted to increase the amount of revenue flowing from resource projects, after years of underwhelming returns most notably from the gargantuan PNG LNG project, run by Exxon in partnership with Oil Search and others.

But changes would be gradual, Marape said, and unlikely to take effect before 2025.

Papua LNG, operated by Total, plans to develop the Elk and Antelope gas fields to feed two new liquefied natural gas processing units, called trains, at the PNG LNG plant.

Oil Search and Exxon also plan to add a third new train at the plant, partly fed by gas from the P’nyang field.

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Gulf landowners welcome PNG PM’s stand on resource laws

James Marape the member for Tari Pori is the new prime minister of Papua New Guinea.

Radio New Zealand | 5 June 2019

Landowners in Papua New Guinea’s Gulf province have welcomed the new prime minister’s stand on resource laws.

James Marape said his government will review the country’s resource laws which he described as outdated.

Mr Marape and other MPs resigned from the Peter O’Neill-led government in April after it signed with French company Total for the $US13 billion Papua LNG gas project in Gulf.

They cited concerns that landowner interests were being undermined in the agreement, and that the O’Neill government had rushed the deal through without meeting mandatory requirements.

The high-level opposition to the project agreement has resonated with local landowners in Gulf Province.

The Purari Development Association general secretary Roy Daniel Evara said the agreement is flawed because the developer has dictated terms to PNG.

“The agreement itself did not comply to very critical pre-conditions of the Oil and Gas Act, which is the guiding pillar for the industry. An agreement should never dictate to the pillars of the country’s laws. It should only conform and comply with it.”

Roy Daniel Evara said the agreement’s provision for 2 percent equity for them was not enough.

Much of the discourse among MPs around last week’s change in leadership in PNG was about the need to address the uneven benefits from the country’s abundant resource wealth

Landowner communities in Mr Marape’s province, Hela, have been frustrated for several years over the lack of promised benefits from the country’s first LNG project, operated by Exxonmobil, which is also a partner in the Papua LNG Project.

“We do not intend to chase away our investors. They’re here to stay, we encourage them,” Mr Marape said.

“But we will look into maximising gain from what God has given this country, from our natural resources. This leadership is all about placing this country in the right place in taking back our economy.”

Mr Marape has borrowed the Take Back PNG mantra from Oro Governor Gary Juffa.

Mr Juffa argued the country isn’t truly independent because foreigners control its economy, saying PNG’s MPs need to devise laws that enable the country to take true ownership of its economy.

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Academic Urges Govt To Revisit Tax Regime

Post Courier | May 28, 2019

The recent political tussle in PNG has emerged due to inconsistent resource development policies, mainly the disagreements on local fiscal contents associated with the extractive sector, explains an academic.

Senior Lecturer Dr Ken Ail Kaepai of PNG University of Technology said from Lae that PNG needs to critically revise the minerals taxation regimes to develop sound policies and innovative ways of capturing a significant share of the mineral wealth without placing tax burdens on the industry.

“The political tussle between the government and opposition is not new. During the mineral boom periods, Australia had its share of high political turnovers due to arguments over resource rent tax and royalty policies.”

“The idea of national ownership of resources has been People Progress Party’s (PPP) policy platform for maximizing the mineral wealth for PNG.

However, PPP has not pursued it for a policy shift. Currently, the political mindset thinks that equity participation is one way to accommodate national interests com- pared to allowing 100 per cent foreign ownership of PNG’s mineral resources,” he said.

He said that the lack of capital for exploration and project developments restrict the national ownership of mining, oil and gas. The State and landowners do not have the equity capital for procuring equity interests in resource projects.

Dr Kaepai explained that given the limitation, the State has agreed to acquire 22.25 per cent interests in the Papua LNG through a deferred payment of the equity capital, which includes the landowner’s 2 per cent interest.

“The State will bear landowner’s financial burden of their equity interest through KPHL. It means that the landowners will be free-riders at the expense of the State and the society at large.”

“Under this arrangement, the dividends will be delayed over more extended periods required for allowing the State to repay the equity capital sourced from external lending institutions or will enable the investor to recoup its equivalent equity capital cost internally using future positive cash flows from the project.”

Dr Keapai said that the deferred payment of the equity capital shifts the financial burden of providing the upfront capital cost of equity to the investor.

The State’s market capitalization of equity participation in minerals, petroleum and LNG is not clear, and landowner equity participation has been problematic,” he stressed.

Dr Kaepai said that the Panguna was the only mine that consistently paid equity dividends until its premature closure in 1988.

“Local equity participation in Porgera and Lihir gold mines have been problematic and unsustainable, while free-carried interest was offered to OK Tedi landowners under exceptional circumstances associated with the riverine tailings disposal system.”

Dr Kaepai said that a former mining minister, the DMPGM and the MRA misled the GoPNG to take the 30 per cent equity in the failed Nautilus Minerals’ under-sea mining development.

“It is a significant loss of public funds that could have been used to develop the deteriorating health and education infrastructures in rural PNG.”

“It appears that the GoPNG provides tax holidays as compensation for equity participation, and at the pretence of attracting foreign direct investment. “This strategy causes a fiscal dissipation where both tax concession and equity participation could lead to wasteful resource extraction.

“The State and landowners need to critically assess the financial viability of equity participation in Papua LNG, Wafi-Golpu and Frieda projects.

This includes the renegotiation of the Porgera gold mine on a case by case basis.

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Political disarray in Papua New Guinea rocks Oil Search shares

Tom Westbrook and Sonali Paul | Reuters | May 27 2019

Political turmoil in Papua New Guinea threatened to delay a $13 billion plan to double the country’s gas exports, sending shares in one of the project’s partners, Oil Search Ltd, down nearly 4% on Monday.

PNG Prime Minister Peter O’Neill said on Sunday he would resign after weeks of high-level defections from the ruling party. Sir Julius Chan, twice a former premier, would take over as the government’s leader, O’Neill said.

Political instability is not unusual in Papua New Guinea and has not held back mining and energy investments in the resource-rich country, however protests over benefits failing to reach rural areas have dogged the government and project owners.

It was not clear whether Chan could command a majority in parliament when it resumes on Tuesday.

“We will not choose him. It’s a really bad choice,” opposition lawmaker Allan Bird told Reuters in a text message.

“We want a complete break from O’Neill (and) Chan is just a proxy for O’Neill,” he said.

Chan said on Monday he had been approached by both the government and the opposition to take the role.

“This is not a position I am seeking,” he said in a statement. “However, I love Papua New Guinea, and there is a desperate need right now to unite the country … and to make the wealth of this country work to the benefit of the people of this country.”

O’Neill had resisted calls to resign for weeks but his opponents said on Friday they had rallied enough support in parliament to oust him over a range of grievances, including a gas deal agreed in April with France’s Total SA.

The deal with Total set the terms for developing the Elk and Antelope gas fields, which will feed two new liquefied natural gas (LNG) production units at the PNG LNG plant, run by ExxonMobil Corp.

At the same time, ExxonMobil and its partners are planning to build a third new unit at the PNG plant, to be partly fed by another new gas field, P’nyang.

Credit Suisse analyst Saul Kavonic said the political upheaval could put pressure on the government to negotiate tough terms for the P’nyang gas agreement, which is yet to be finalised, and affect talks on development costs.

“Both these factors heighten the risk of delay,” he said in a note to clients.

Any delays in the P’nyang agreement could hold up a final investment decision on the PNG LNG expansion, which is set to double the plant’s capacity to 16 million tonnes a year.

The uncertainty sent shares in Oil Search, a partner in PNG LNG and Papua LNG, down as much as 3.9% in early trading on Monday. Energy stocks rose 0.6%.

ExxonMobil and its partners had hoped to begin basic engineering planning for the expansion by mid-2019 and make a final investment decision in 2020.

They are racing against projects in Mozambique, Qatar, North America and Australia to produce LNG from the expansion by 2024 to fill an expected gap in the global LNG market. ExxonMobil and Total both have LNG projects elsewhere that could take priority if PNG politics delays them, Kavonic said.

RBC analyst Ben Wilson said he did not think a final investment decision in 2020 was at risk yet and played down the threat that the PNG opposition would seek to renegotiate the LNG agreement.

“Sanctity of contract is critical to ongoing investment in PNG and to the success of future potential sovereign bond issuances,” Wilson said.

Total and Oil Search representatives were not immediately available to comment.

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Kutubu LO’s See No Improvements Despite Oil Flowing For 26 Years

Kutubu LO’s Want Govt To Honour LNG Deal

Post Courier | May 27, 2019

The people of Kutubu have supported the economy of the country but the living conditions are still the same. The people who have never complaint before are now calling on the Government to help improve their lives.

Spokesman and young Kutubu landowner Asi Ibisubu say since 1989, the start of the Kutubu oil project, successive governments have ignored the plight of the people.

He said the wealth of Kutubu has and will continue to support the economy and improve the welfare of other Papua New Guineans so long as the oil and now the gas for the PNG LNG continues to flow.

Ibisubu says the Government should now consider the people of Kutubu and seal the road from Poroma to Moro and beyond so that the people travel on good seal road.

He said the Government should also consider running power (electricity) from Mendi to Kutubu so the people can use the opportunity to improve their lives.

“While we have oil flowing from Kutubu for 26 years, there is nothing to show for and what we ask is if the two project can be considered for the benefit of the people. We still live in Kunai thatched house and continue to live in our traditional way of life after 26 years. There is nothing to be proud of, unlike landowners in the Middle East who owns private jets. While we don’t aspire to be like them, at least we see improvements in our lives would make wonders. We would also appreciate if the laws are changed so it gives us a better deal to improve the lives of the people,” he said.

Ibusubu is also calling on the government to honour many of its commitment made to the PNG LNG project.

The said they have been quiet for a long time but they feel the road sealing and the electricity rollout projects are important for the people of Kutubu to help improve their lives.

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