Govt used PNG LNG funds to settle loan: Pruaitch

OPPOSITION Leader Patrick Pruaitch says a statement by the Government that the Papua LNG gas agreement is superior to the PNG LNG Project is a myth based on deceit and poor accountability.
Pruaitch said the Government had used revenue from the PNG LNG Project to settle the A$1.2 billion (K3 billion) UBS loan it had raised to purchase a 10 per cent stake in Oil Search.
“There are additional losses that have not been accounted for by Kumul Petroleum,” Pruaitch said.
“These factors have erased much of the benefits that should have flowed from the PNG LNG Project to this country.
“The reference by Prime Minister Peter O’Neill and Treasurer Charles Abel that additional benefits negotiated through the Papua LNG project included a boast that Total/Papua LNG had agreed to retain US$250 million (K842million) in the country, along with 10 per cent of their export revenue is a total nonsense. I do not see any benefit in this aspect of the Papua agreement.”
Pruaitch said the Government, through Kumul Petroleum, directly owned 22.5 per cent of all Papua LNG export revenue but the country could look forward to only receiving 10 per cent.
“This is just not logical but sheer stupidity.”
Pruaitch said even when crude oil and LNG prices fell to low levels – it dropped to US$26 (K84) a barrel in February 2016 compared to over US$70 (K227) now – Kumul Petroleum reported a gross profit of US$289.6 million (K937mil) for 2016.
“This contrasted with a record US$423 million (K1368mil) profit in 2014 after PNG LNG exports had commenced in May of that year.”
He said Kumul Petroleum had a gross profit of US$411 million (K1330mil) in 2017, the most recent year for which it had reported.
“All this money should have been repatriated to PNG, far more than the Government wants Papua LNG to be retained in PNG.”