Country’s resource laws has issues: Kua


PETROLEUM and Energy Minister Kerenga Kua says there are several issues with the current resource laws that the country has.
This issues compelled the Government to make recent changes to those laws.
“Why the Government has set out in carrying out a series of legislative reforms in mining and petroleum is because we think that there are certain aspects of the legislative framework that we are working on are not operating to the benefit of the State and the citizens of this country,” Kua told the PNG Chamber of Mines and Petroleum virtual seminar yesterday.
“Looking at the current systems we have, for both mining and petroleum, we operate under a concession based system.”
Kua noted that some of the issues included:

  • Giving away resources, without any compensation flowing back to the State;
  • Buying back part of the resource (as equity) which was once fully owned by the State; and,
  • Going out to the money market to borrow substantial money to finance equity which then adds to the country’s already existing debt.

“Initially, when some commercial reserves are found, development licences are given and project agreements are signed.
“At that moment, the State’s ownership of those resources are then transferred from the State 100 per cent across to the licence holder or the developer,” Kua explained.
“Moments later, the resource owner grants an option back to the State in the case of minerals, 30 per cent option.
“In the case of petroleum, 22.5 per cent.
“When that happens, the State goes into the international money market to look for money to purchase the equity.
“Up to November 2019, the statutory limit for statutory borrowing was 35 per cent.
“In passing the budget last year, the Government also set about amending that particular legislation to increase the ceiling from 35 per cent to 45 per cent,” he said.


  • Thank you Minister. That is old story which we already know about.

    What the people of PNG are waiting for is all the big wigs in the National Haus Tambaran to pass a law so that we can own all our resources by the people and for the people.

  • The honourable Kua misses the crucial issues in the LNG and Nautilus dramas. The resource companies -Especially Oil Search- have managed to obtain expensive capital through PNG’s pipe dream of equitey ownership. How the leadership of PNG was bambouzled has nothing to do with the legal framework but a fundamental lack of expertise. The PNG government has most benefit from a steady income from resources independent of price fluctuations and profitability. The more price and profit play a role, the greater the influence of accountants and lawyers in negotiations. PNG will always be the dominated partner in such negotiations. The honourable Kua could have given a much more interesting historical talk, for example explaining why Ok Tedi has provided such a steady and considerable source of revenue in the period from shifting control to UPNG Sustainable Development Fund until O’Neill grabbed the company.

  • So what? What have we done? are we in the process of making legislative changes for a greater benefit of landowners and state? We want to hear some positive news of steps taken as part of take-back PNG.

  • Government as made good decision but we want ownership goes back to the people or the resources owners. The colonial legalisation removed all the resources out of the country and people suffered as result of this. An example is Porgera mine take over, any interested developers want to joint venture partner with PNG government company they can buy the shares, the resources require free carry shares.

  • Why give resource the developers and we buy shares? PNG lakes leadership for the past 30 years. Can PMJM take PORGERA back as a start.

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