K120mil set for petroleum deals

A TOTAL of K120 million has been approved to settle capped petroleum memorandum of understanding agreements (MOAs) dating back to 2009, an official says.
Department of Petroleum secretary David Manau said this dated back to when licences and projects were discussed during oil production prior to the PNG LNG project where the umbrella benefit sharing agreement (UBSA) and license based sharing agreements (LBSA) came into existence.
Manau highlighted this in a paid advertisement yesterday.
“There were various project grants under the PNG LNG project regime, granted under UBSA of 2009 and the various LBSA of 2009,” he said.
“These project grants are defined under those arrangements.
“During that time, the majority of the landowners pointed the State to its ‘unkept promises’ under the current oil projects.
“Hence, the State valued the outstanding commitments at K235 million as a final payment in lieu of the outstanding infrastructure commitments for existing oil projects and Hides PDL (petroleum development licence) 1 GTE.
“Within a span of 12 years since 2009, to date, a total of K115 million was already paid out for infrastructure projects sporadically.
“It took about two years since 2019 for the department to establish correct records with relevant state agencies and receive project submissions from stakeholders. Last June, Petroleum Minister Kerenga Kua sponsored an NEC (National Executive Council) submission for the K120 million outstanding capped MOA.
“And with the support of the prime minister, NEC approved it through NEC decision 119/2021.”
Manau said the expenditure implementation committee (EIC) was also established pursuant to the Oil & Gas Act (1998), to complete this task through a legally mandated process.
“Amidst very limited cash flow situation given the Covid-19 pandemic, NEC approved in full K120 million to extinguish the burden that was on the State for 13 years,” he said.
“The EIC formally met on Feb 2-4, 2022 and a quorum was achieved and therefore project proposals recommendations elevated from the EICS (expenditure implementation committee secretariat) technical screening, were deliberated upon.
“The warrants for funding in February going forward will be issued from Finance and Treasury departments for the payments of the capped MOAs.”