Tag Archives: Peter O’Neill

Peter O’Neill: Government to Ensure Better Deal for Communities

Meriba Tulo | EMTV | 4 December 2018

Negotiating a better deal for Papua New Guinea will be the mantra for the National Government as it looks to finalizing some major projects within the Extractive Industries in the months ahead.

Prime Minister Peter O’Neill made these comments when speaking to EMTV News on Day one of the 2018 PNG Mining & Petroleum Investment Conference.

Addressing the opening session of the PNG Mining & Petroleum Investment Conference, Prime Minister Peter O’Neill elaborated on the efforts by his government in pushing for better deals for upcoming projects within the mining and gas space.

His comments on the back of concerns regarding the perceived unfair distribution of wealth from existing projects operating in PNG.

According to Mr O’Neill, the lessons from current projects will not be repeated, with the National Government aiming to ensure that the country receives a better deal, financially, but more importantly, socially, through respective project agreements.

A major aspect of upcoming projects that the government is keen to complete, is the all-important landowner and clan-vetting exercise, especially within the gas sector – which according to the Prime Minister was rushed during the country’s first LNG project.

The Prime Minister’s comments come at a time when the government is trying to finalise project agreements for the Papua LNG, and Wafi -Golpu Projects respectively.

An MoU between the State and Project developers was signed during the recent APEC Economic Leaders Week in Port Moresby, and according to the Prime Minister, an agreement a similar agreement is expected to be signed for the Wafi -Golpu Project at the conclusion of the Sydney Conference.

Advertisements

Leave a comment

Filed under Financial returns, Papua New Guinea

We Want Greater Share: O’Neill

Gorethy Kenneth | Post Courier | December 4, 2018

PAPUA New Guinea wants a greater share of benefits from major oil and gas companies operating in the country, Prime Minister Peter O’Neill said when officially opening the 15th PNG Mining and Petroleum Conference in Sydney yesterday.

Mr O’Neill told delegates and major oil and gas companies operating both in PNG and those who have interests in the resource sector that the country needs and wants a fairer share of the benefits flowing from the development of these resources.

He said that PNG wanted them to invest in its oil and mining sector and at the same time wanted returns that benefit the people and resources owners.

“I know you will continue to invest in the sector and the government is very much familiar with the ups and downs in the sector which we have all gone through,” Mr O’Neill said.

“The resource sector has the first opportunity to deal with many of our landowners issues and concerns, in many of our remote communities.

“They want to be included and must be part and parcel of the decisions we make in investing and developing their resources.

“The inclusiveness of these communities by making sure that they participate meaningfully in the development of the resource and participating in and — of course, making sure that their standard of living improves and grows is something that is important to the core agenda of our government.

“We want to invest in our people and we want to make sure that they participate. We want to make sure that the benefits that come with the development of the resources is fairly shared.

“We understand very well that investors want a decent return on their investments, but we also, in our country, want a fair share of the benefits coming out of those resources developments.

“It is important that industries continue to support that,” he said.

The conference ends tomorrow.

Leave a comment

Filed under Financial returns, Papua New Guinea

Saonu Raises Concerns On Wafi-Golpu Mining Lease

Post Courier | November 9, 2018

Morobe Governor Ginson Saonu has raised concerns on the pending signing of a special mining lease between the developer of the Wafi-Golpu mine in Morobe Province and the government during the APEC summit next week.

He cited sources from social media who had released a report saying there was already a memorandum of agreement in place, established by the Mining Act.

The issue was interrupted by a court case and the signing of the special mining lease is expected to take place in 2019.

Mr Saonu directed his concerns to the Prime Minister Peter O’Neill during question time in Parliament.

“Would you please confirm or deny, whether the government has agreed to sign a heads of agreement at the APEC Summit? Why was the Morobe provincial government and stakeholders not consulted?’’ Mr Saonu asked.

‘‘If the proposed signing of the heads of agreement is true, will you inform all the stakeholders landowners, state entities and the people of Morobe on what the agreement is all about?’’

He went on to ask the prime minister if it was still necessary to continue and complete the due process and what would be the legal consequences of abandoning the process.

In response Mr O’Neill said: “Mr Speaker our government has appointed a state negotiating team. Technical people from the Mining Department, Treasury, State Solicitors office and other government agencies are dealing directly with Wafi Golpu developers, particularly Newcrest and Harmony.

“They continue to discuss the way forward in continuing to develop this mine The negotiations are still in its early stages and there have been no briefings to cabinet or to the prime minister.

“I don’t see any mine development agreement being signed around APEC and certainly any agreement that needs to be signed will be in full consultation with Morobe provincial government and the people of Wau Bulolo particularly the landowners.”

Mr O’Neill said any understanding reached with the developer was about the program going forward.

‘‘There would not be any legally binding agreement but for the benefits of investors and potential financiers of the project, the government and its developers wants to give a clear position about its intentions to develop the mine,” he said.

Leave a comment

Filed under Financial returns, Mine construction, Papua New Guinea

Wafi-Golpu Project To Lift Economic Growth, Says O’Neill

ECONOMIC GROWTH DOES NOT MEAN BETTER LIVES FOR ORDINARY PEOPLE

Benny Geteng | Post Courier | October 16, 2018

The Wafi-Golpu project in Morobe province and Papua LNG in Gulf province will help PNG experience a 3 per cent economic growth when productions begin, said Prime Minister Peter O’Neill.

Mr O’Neill said the two projects, when they start producing will boost the economy of the country at a sustainable rate.

“PNG will experience a medium growth of 3 percent. 3 percent is a sustainable growth for a country.

“The Wafi – Golpu mine will be the basis to deliver infrastructure to the province,” he said.

Mr O’Neill said with the Papua LNG Project there is good progress to deliver the project and the negotiation team is at fiscal terms of project signing and closing to pass concessions.

He said the economy is looking bright at a good economic projection of 2- 3 per cent growth.

He also said there will be no fly in fly out for employees of Wafi -Golpu.

Mr O’Neill made this statement last week during the swearing in of the Lae City Authority interim board following a recent strong stance by Morobean parliamentarians who have made it clear they do not want the practice of fly in fly out in the Wafi – Goplu project.

Mr O’Neill said the country will not repeat the same mistakes of the billion dollar LNG Project deal in Hela Province to the new projects and the leaders have now learnt from their mistakes.

“We built an international airport in Hela and that airport is only used once every month,” he said.

He said these are some instances of missed opportunities that the Government will try to avoid in the upcoming mining projects of the country.

The Prime Minister said the new Wafi – Golpu mine is a bankable project for the country to embrace.

The construction phase of the Wafi – Golpu is valued at K5 billion and is set to be one of the biggest revenue earners for Morobe province when gold production starts.

1 Comment

Filed under Financial returns, Mine construction, Papua New Guinea

‘All Alluvial Mining Should Be Reserved’

PM Peter O’Neill says all alluvial mining should be reserved for Papua New Guineans

Post Courier | May 31, 2018

PRIME Minster Peter O’Neill says all alluvial mining in the country should be reserved for Papua New Guineans.

Mr O’Neill said he agrees with the decision and the stances the Morobe provincial government took in allowing Papua New Guineans to mine and take ownership of alluvial mines.

He said although he was not aware of the letter from the Morobe Goldfield Mine Association, he would instruct the Minster for Mining and the department to look into the concern of the people who did not want explorations licences to be issued to big mining companies.

“I’m not privy to the letter, generally I support the call and stand of the Morobe provincial government that alluvial mines should be reserved to our people.

“Big companies should not be involved in alluvial mining in PNG.”

Mr O’Neill said this during Question Time yesterday in response to Morobe Governor Ginson Soanu who had asked that the Morobe Goldfield Mine Association oppossed the issuing of alluvial mine exploration licences to big companies to be involved in alluvial exploration and mining in Wau-Bulolo.

Mr Soanu said that Morobe provincial government supported the association, which involved villagers and ordinary people, and wanted the Minster for Mining Johnson Tuke, the Department of Mines and MRA not to issue any licence to Harmony Exploration Limited and Abu Exploration Limited for EL2544 and EL2554 in the Wau-Bulolo area.

Leave a comment

Filed under Financial returns, Papua New Guinea

“Government Will Not Repeat Mistake With Papua LNG”

Post Courier | May 30, 2018

PRIME Minister Peter O’Neill has told Parliament that the government will not repeat the same mistakes when dealing with the new Papua LNG project or any other resource project.

He said the developer of Papua LNG would have to complete social mapping and landowner identification before any project is developed.

Mr O’Neill also said the government would review the laws to make it compulsory for consultation with provincial governments and landowners.

“We may have to review the legislation around the consultation process, but in terms of the resources sectors in mining, petroleum and gas industry, I think there is quite a very good consultation process between the stakeholders, especially the landowners and the provincial governments,” he said.

“I would also want to announce that in terms of the second LNG project for Elk Antelope, I want to inform Parliament that we have also included the Governor for Gulf in the State negotiation team.”

He said this follows the precedence set by the Somare government in the first LNG project where the governors for Southern Highlands and Hela were included in the negotiation teams so they are fully engaged in every stage of the negotiation that is taking place.

“I certainly do not want to make the mistakes of the first LNG, where landowners were not properly identified now we are having a difficult process of clan vetting as all sorts of clans are popping up and it can be a cumbersome and difficult exercise,” he said.

“That’s what we are trying to avoid and we want to make sure that developers take on the responsibility as stipulated in the Oil and Gas Act and in the Mining Act.

“They must identify and do the social mapping properly so that the right benefits go to the rightful landowners and stakeholders in the projects,” he said.

Mr O’Neill was responding to questions from Gulf Governor Chris Haiveta relating to provincial government representation in the extractive industry and the level of consultation and the time which these consultations are allowed for by the provincial governments and the resource owners.

Leave a comment

Filed under Financial returns, Human rights, Papua New Guinea

Natural gas project that promised economic boom leaves PNG in ‘worse state’: report

Isabel Esterman | Mongabay | 17 May 2018

  • Proponents of PNG LNP, an ExxonMobil-led natural gas project in Papua New Guinea, predicted it would bring massive economic benefits to landowners and to the country as a whole.
  • According to two recent reports by the Jubilee Australia Research Centre, PNG’s economy is worse off than it would have been without the project.
  • Jubilee Australia also links the PNG LNG project to an upswing of violence in the areas around the plant.

In 2008, when a consortium led by ExxonMobil was drumming up support for a $19 billion natural gas extraction and processing project in Papua New Guinea, proponents of the development predicted it would underpin the country’s economy for decades.

Production began in 2014, and now reaches approximately 7.9 million tonnes of liquefied natural gas per year. However, according to two recent reports by advocacy group Jubilee Australia Research Centre, the PNG LNG project has not only exacerbated conflict and inequality in the Papua New Guinea highlands, it has also failed to produce the promised benefits. According to Jubilee Australia’s analysis, PNG’s economy would be better off if the gas had been left in the ground.

Predicted economic impacts of the PNG LNG project compared to actual impacts (based on Jubilee Australia’s analysis of underlying economic trends). While exports have exceeded expectations, GDP growth has been slower than forecast and income, employment and government spending have dropped. Image courtesy of Jubilee Australia.

Big promises

When pitching the project, developers made big promises about the economic and social benefits the megaproject would bring to the country.

One influential 2008 study, an economic impact analysis commissioned by ExxonMobil and authored by Australian consultants ACIL-Tasman (now ACIL-Allen), predicted the project would bring a tremendous windfall not only to shareholders, but also to the people of PNG. It forecast the overall size of the country’s economy would nearly double, household incomes would rise by 84 percent, and employment increase by 42 percent.

Backers of the project argued that these anticipated benefits would more than compensate for any adverse environmental or social impacts a giant natural gas facility might bring in its wake.

Instead, says Jubilee Australia, PNG is today worse off than it would have been if the country’s economy had simply continued developing at the same pace as prior to the launch of the project.

“Currently, on almost all economic indicators, the people of PNG would have been better off had the project not happened at all,” report co-author Paul Flanagen, who has served as a senior adviser to the Australian government and the PNG treasury, said in a press statement.

Jubilee Australia’s analysis found that instead of the 97 percent increase anticipated by ACIL-Tasman, PNG’s economy in 2016 was just 10 percent larger than its pre-LNG growth path would have predicted — most of that concentrated in the largely foreign-owned extractive sector. Instead of rising by 84 percent, household incomes fell by 6 percent in the same period, while employment fell by 27 percent.

Even with the moderate increase in the size of the economy, government expenditure to support better education, health, law and order, and infrastructure fell below the baseline by 32 percent, rather than the 85 percent increase anticipated by the ACIL-Tasman report.

Significantly, these decreases came even though production at the facility has exceeded expectations — an increase Jubilee Australia contends was more than sufficient to compensate for the impacts of falling gas prices.

The Tari Gap in Hela Province in the Papua New Guinea Highlands. Photographed in 2003 before the arrival of the PNG LNG project. Image by Ron Knight via Flickr, CC-BY

Falling short

The authors point to several factors.  First, they cite “serious flaws” in the economic impact analysis, describing the forecasts as “extraordinarily over-optimistic.”

Government revenue has also fallen short of expectations due to a combination of generous tax concessions offered to the project, and what the report describes as “aggressive tax avoidance” by the companies involved.

“Exxon and Oil Search” — the second-largest stakeholder in the joint venture — “should be paying half a billion [Australian] dollars [$377 million] to the PNG government every year, since the gas started to flow in 2014,” Jubilee Australia executive director Luke Fletcher said in a press statement. “Instead, they are paying a fraction of this amount, partly because of their use of tax havens in the Netherlands and the Bahamas.”

Drawing on an analysis by the Extractive Industries Transparency Initiative, the authors note that the PNG government received more money from personal income taxes paid by ExxonMobil employees than it did from corporate tax from the company.

Further, the report points to “poor policy decisions made by the PNG government in response to the gas boom.” Exuberant spending in the early years of the project led to debt and deficit when the anticipated revenue failed to flow into government coffers.

Landowners, too, have not received the royalties they expected, a problem Jubilee Australia attributes largely to a failure to vet and identify beneficiaries before production began. Clan boundaries were mapped, but the individuals entitled to payments were not specified as part of the original agreement. This, the reports argues, has been an ongoing source of conflict and uncertainty and has fed into violent unrest in the territories around the project.

“During the construction phase of the project landowners had jobs, families had money, and conflict between clans was minimal,” report co-author and anthropologist Michael Main said in a press statement“When construction ended and people lost their jobs, money stopped flowing, frustrations built up and violent conflict escalated to catastrophic levels.”

A Huli Wigman and youth. The majority of landowners around the PNG LNG site in Hela Province are from the Huli ethnic group. Image by Ron Knight via Flickr CC-BY

‘Utter nonsense’

PNG Prime Minister Peter O’Neill has challenged Jubilee Australia’s conclusions, as have ExxonMobil and Oil Search.

During a May 2 speech in Brisbane, Australia, O’Neill denounced the first of the Jubilee Australia reports as “fake news” and “utter nonsense.” He said he had not read the paper, but accused its authors of aligning themselves with his political opponents.

ExxonMobil and Oil Search, meanwhile, pointed to their royalty payment agreements as well as their corporate social responsibility initiatives, and noted it was the government, and not them, who was responsible for relaying payments to landowners.

“PNG LNG royalty payments due to the government began, and have continued, since the start of production operations in 2014. Payment and distribution of royalties and other benefits due to landowners in the Project is the responsibility of the PNG government and is based upon benefits sharing agreements previously executed between the government and Project area landowners,” ExxonMobil said in a statement to the Business and Human Rights Resource Centre. The company also pointed to its social investment program and its support for humanitarian relief in the aftermath of an earthquake that struck the project area in February.

Oil Search said royalty payments were distributed to the PNG LNG plant site and to traditional landholders in 2017, although it added that “significant payments” were still outstanding. “[W]hat is good for Oil Search is good for PNG. We have a strategic interest in ensuring that we maintain a stable operating environment based on strong and enduring relationships with local communities,” the company said.

Leave a comment

Filed under Financial returns, Human rights, Papua New Guinea