ExxonMobil and State are aware of demands

Letters, Normal

THE letter by Wotekep Kangtekep (“No point crying over spilt milk, Agiru”, March 23) and two others did me great injustice when they accused me of being late in taking issue with some aspects of the PNG LNG project.
They must have just woken up from hibernation because were they awake, they would know that I have been on the gas project from day one.
I opposed the proposal to pipe gas to Queensland when I was then an ordinary citizen.
I was on top of the PNG LNG project from the day the idea was first broached.
The writer did not know what went on at the negotiation tables where I assisted the State, so the accusation of me being ignorant was unfair.
Whether I protested certain aspects or not are not for public domain.
Let it be left in the locked negotiation rooms of Waigani.
Those who were there know my views and since they were Government ministers and executives of the developers who are in a position to do something about my views, I am satisfied.
Last March 11 was the day PNG finally got the LNG project, not before then.
The project has the funds to advance to construction phase and it had the markets tied down for every tonne it produces.
Even with the final investment decision of last Dec 8, the markets and finances were still being negotiated and could have collapsed any time, setting back the project timetable.
To make a hue and cry in public would have had a huge and detrimental impact upon sensitive negotiations to secure finance and markets for PNG LNG.
As custodian of the resource, I, in particular, had to be extra careful.
After financial closure, there was none of that sensitivity and I could publicly call on the State and the developer to honour their commitments under the Gas Agreement of May 2008.
The umbrella benefits sharing agreement and the licence-based benefits sharing agreement are what we got from the State.
There is no law which give effect to provincial governments to deal and negotiate directly with investors such as ExxonMobil.
I am on record raising the matter of a national content plan and I have gone as far as the vice-presidents of ExxonMobil to demand that.
The fact that I raised the matter of how much money would remain on shore of the total investment and my insistence on local contractors is making public what I have been pushing privately all along.
It is again nothing new or surprising to the developer and the State.
I have made my views known at the right times and in the right forums and, most importantly, to the right audience.
At this moment, the Commerce and Industry, and Petroleum and Energy departments, Independent Public Business Corporation and ExxonMobil are negotiating the very points I raised.
The State has given concessions in taxation and other areas in this project.
This is to attract companies to invest or explore in this country. These incentives offered by the State brought ExxonMobil to our shores.
I raised the matter of relocation which is a compliance issue in the Organic Law on Provincial Governments and Local Level Governments.
It is nothing new. I have to point out to ExxonMobil that it must comply with the requirements of the law and I have done just that.
This is PNG’s biggest project and its biggest opportunity to make it right.
Sure, there are pitfalls associated with such projects but we look at the pits and fill them as we move forward.
As we do so, we look forward to the glittering opportunities.
ExxonMobil is the world number one.
I am confident it will deliver because it has its own reputation to keep.
I am confident it will deliver because, by its own admittance, it aims to change PNG for the better with this one project.
Every kina spent on PNG LNG, the State pays 19.4% and landowners pay 7%.
Spin-off businesses are what come out of the LNG project.
It is not a part of fiscal and technical terms of the agreement.
Now is the time for State to work with ExxonMobil to negotiate with lead contractors.
It will use its best endeavours to ensure our bridge over river time is well constructed and that while the construction costs will be met by it and the team, the benefits to all will be enormous.


Anderson Agiru,
Governor SHP