BARNABAS ORERE PONDROS
THE K60 million allocated to facilitate the licence-based forums for the PNG LNG project will be managed by a chartered accounting firm and not the Petroleum and Energy Department to avoid “careless spending” experienced during the Kokopo Umbrella Benefits Sharing forum in May.
“Based on experience of careless spending during the Kokopo BSA forum, the Government has decided to engage Deloitte Touche Tohmatsu to control expenditure,” a reliable source said.
The source also revealed that resource firm Oil Search Limited was also engaged to control the spending of the K60 million by way of providing logistics, catering and other services required on the ground during the forums.
“The Department of Petroleum and Energy will not control the funds, they will have to work with Deloitte to ensure spending is done in an accountable and transparent manner,” the source said yesterday.
The source did not say if the money had been disbursed by Treasury, but confirmed that the arrangement was to ensure the K60 million was not spent according to budget and approved work plans.
The source explained that the process would be that DPE would have to submit a requisition with work plans based on budget and then Deloitte will disburse.
“Deloitte will control all funding and spending aspects to ensure everything is done according to budget and according to approved plans,” the source said.
Without proper work plans, any requisitions would be denied, the source added.
“Oil Search will manage all the logistics during the forums as it already has existing equipment and facilities on the ground.”
Oil Search will be responsible for catering, transportation and will also engage its own existing contractors to provide other services needed during the forums.
This revelation will ease concerns that have been raised by various stakeholders that the widespread abuse of funds faced during the Kokopo BSA must not be repeated.
It is also understood that Government decision to engage independent managers for this round of talks was because financial reports from the Kokopo BSA are yet to be disclosed.
Earlier, Petroleum and Energy Minister William Duma said the K60 million was to ensure all landowners take part in the upcoming licence- based forums leading up to granting of licences for the PNG LNG project.
The forum was a massive undertaking that would involve thousands of landowners in nine licence areas.
The forums would be conducted in or near the project areas as set by the Oil and Gas Act.
Portion 152 landowners started their licence-based forum in Port Moresby last week, and are expected to sign today.
The others forums will be in the Southern Highlands at Kutubu, Gobe, Moran, Angore, Juha, Hides petroleum development licence (PDL) 1, petroleum retention licence 11 and Hides PRL 12.
At the end of the forum, DPE will issue various petroleum licences and petroleum processing facilities licences that will pave way for the final investment decision.
A source at ExxonMobil said: “The PNG LNG project is on schedule to make a final investment decision before the end of 2009”.
It is understood this is set for Dec 9.
At the time of going to press, the Treasury Department and DPE did not respond to emails and telephone messages requesting confirmation of this arrangement.