Barker: State needs proper team

The National Business

By DALE LUMA
THE State needs a proper project negotiating team to lead project development talks with developers, says Institute of National Affairs executive director Paul Barker.
Barker was responding to the outcome of the recent P’nyang negotiations between the Government and developers.
“Clearly, the State needs a capable negotiating team that can negotiate professionally and realistically with the developers,” he said.
“They should have access to comparative international norms on costs and returns and the details of the negotiating process and positions must be conducted on behalf of the nation with access for public scrutiny.
“These are long terms investments and they provide the opportunity for major short-terms economic stimulation and long term revenue if conditions agreed are sound and risks not unduly born by the State.
“On the other hand, the State must fully recognise the critical role of the investors, and notably the operators, in terms of planning and developing the project, securing finance and taking risk, accessing the market, and choosing this project over alternatives available.
“So they must recognise reasonable levels of expected return, control, risk and so forth.”

5 comments

  • While we commend the State negotiating team for their effort to gain more for PNG, they must not be blind to reality. Investors will investors millions and they need to make money, otherwise it would be unprofitable and unwise for them. I am sorry, we can not buldoze our way if other people are paying for it. If we want to have tthings our way then we should put up the capital to develop the project. The current minister is living in a fantasy world.

    • SNT must never bow down to pressure from those who want big profits at the expense of the national development aspirations interms of environmental and economic sustainability. I personally believe the government is living up to the peoples expectation.This is the beginning of a new era in project negotiation and final development on win-win agreements. No repeats of Panguna and OK Tedi Mine where the people are now suffering environmentally.

  • As the minister has very clearly stated, the investors can leave gracefully. Leave the resources underground as they were before. If they don’t want to agree to our terms, then just back off. We are the owners of the resources, and we want what is best for our people and that is exactly what our government and the state negotiating team have done and will continue to so. Thumbs up to our state negotiating team!
    If the investors are not happy with the terms, just simply withdraw and go home to wherever you come from and invest elsewhere and leave our resources underground.
    Investors came in and bulldozed the agreements for prior LNG projects including mining projects taking advantage of our poor negotiation skills and lack of capital and knowledge. Now, the landscape has changed and you cant come in again and bulldoze your agreements at our lack of knowledge, capital and ignorance. PNGians have learnt from past mistakes and they will now right the wrongs.

  • It is critical that PNG government have professional with experience and understanding of the mining and petroluem industry and the global trend on demand and supply today and projected into the future so it knows what fiscal terms are realisitic. Use of reputable petroluem industry consultants to conduct ondependent evauation of Exxon’s proposal.could also determine or validate if Exxon’s propisal is fair.
    The government also understand whats risk it is taking with respect potentail damage to investors confidence to invest in this country.
    PNG has potential hydrocarbon opportunities outside the Papuan Basin that is not been fully exploited yet. The last thing the government wants to do is drive potential investets current and future away from investing in PNG.
    So as a PNGean I agree with Paul Barker that the government must used qualified profesdional who knows this industry to negotiate fair benefits for PNG and understan the risk and consequences that could affect the country therefore providing the appropriate advise to the government.

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