Tuesday, May 1, 2018

LNG hurts PNG Economy

WHILE the PNG-Australia Business Council Forum gets underway today in Brisbane, Australia, a new report on the involvement of Australia in the establishment of the PNG LNG Project, could potentially upset proceedings.

The report has also prompted operator ExxonMobil PNG Limited to come out and declare its dealings.

Papua New Guinea Prime Minister Peter O’Neill, who is still on official trip in Europe, was alerted to it but referred the report to his deputy Charles Abel and Treasury Secretary Dairi Vele, but no response came from them as of late yesterday.

The report, “Double or Nothing: The Broken Economic Promises of PNG LNG”, bluntly dismisses the initial impression of an economic windfall for PNG with the extraction and export of LNG.

The report is also anticipated to reopen a case for the Australian Government to be held accountable for a decision to lend A$500 million (K1.26 billion) taxpayer money to the PNG-LNG project described which it cites as “negligent”.

ExxonMobil PNG Limited issued in a statement yesterday that it remained committed to contributing to the development of PNG, and to bringing economic benefits to the country.

“Government distribution of royalties and benefits to LNG plant-area landowners began in 2017. Payment of royalties and other benefits due to landowners in Hela Province and other upstream areas will commence as the government completes the additional landowner identification process that it commenced in the fourth quarter of 2017. Benefits claims previously filed by certain landowners in the courts have only recently been resolved.

“PNG LNG has contributed some K14 billion (USD$4.3 billion) to local businesses and the government through employment taxes, MRDC and Kumul Petroleum disbursements, development levies, royalties, and license maintenance fees. Of this, more than K3.5 billion (USD$1.07 billion) has been spent with landowner companies.

“Nearly 2600 employees and contractors are engaged in PNG LNG production operations. Approximately 82 percent are Papua New Guinean and 22 percent are women,”

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