K12.9 billion pumped into economy, says OSL

Business, Normal
Source:

The National, Thursday 10th November 2011

PNG’s only oil and gas producer Oil Search Ltd contributed a total of K12.9 billion into the country’s economy from 1992 to 2010, it has been revealed.
OSL is the operator of Kutubu oil fields and the Hides gas field that powers the Porgera gold mine in Enga province.
Of the K12.4 billion direct financial benefits derived by PNG, the national government alone was paid a total of K9.4 billion in the form of petroleum income tax, salary and wages tax, stamp duty, withholding tax and equity dividend.
This was revealed in a media workshop organised by the PNG Chamber of Mines and Petroleum in Port Moresby last weekend.
Non-cash or indirect benefits to landowners through employment wages, loan guarantees, landowner company contracts, tax credit projects, MoA grants, community development programmes, royalty and equity future generation trust payments totalled K2.232 billion to December last year.
The Southern Highlands and Gulf provincial governments and their respective local level governments in impact areas received K814 million through special service grants, infrastructure grants, royalties, equity dividends, MOA grants and development levies.
Direct cash payments to landowners through royalties, land compensation and land rentals and equity dividends totalled K389 million.
The 1996 Oil & Gas Act was important in that it mandated the parcelling of benefits to various stakeholders and particularly that a percentage of landowner benefits were sequestered in community infrastructure and future generations’ trusts.
Oil Search paid equity dividends and royalty benefits in cash in field and not in Port Moresby unlike other resource companies.
The company had established a BSP bank in Moro and assisted landowner groups to open bank accounts for their financial benefits to be paid into.
Meanwhile, the company was also involved in many other community programmes such as education and training.
 On sponsorship expenditure from 1996 to 2010, the company had spent over K7 million to sponsor a total of 1,376 students to various educational institutions.
This included students from project areas in Hides, Gobe, Kutubu, Moran and the pipeline project.
They were being trained in health, secretarial, business, technical and theological studies.