Kavo’s criticism of Shell misleading

I WRITE in response to Gulf Governor Havila Kavo’s criticism of Shell’s return to PNG.
Kavo said companies that discre­dited PNG by calling it a failed state should be banned from the country.
Shell left PNG in 2006 by selling its entire assets worth half a billion kina to InterOil.
It was making more than K270 million annually and was one of the highest tax-paying companies in PNG.
Although Shell was enjoying and dominating the downstream of hy­dro­carbon business in PNG, it was the decision of the London headquarters that wanted to scale down its businesses not only in PNG, but othe­r Pacific Island countries as well.
This decision was based on business analysis to focus more on upstream businesses.
Shell did not in any way, as far as I can recall, say PNG was a failed state.
Few months prior to Shell fully selling off its assets and businesses, our then government of Sir Michael Somare and Bart Philemon ap­pealed to the company to reconsider but Shell explained politely that their target has shifted to the lucrative upstream businesses in China and Russia.
Shell would have left PNG a long time ago when we were in a state of bankruptcy and collapse but chose to continue operating during bad times.
Kavo queried about the infrastructures and developments Shell left for us.
Shell has contributed plenty in taxes to the state to look after the likes of Kavo and built infrastructure that he could only dream about.
It is not a company’s responsibi­lity to build infrastructure services, unless it falls under the tax exemption scheme.
It is the state’s responsibility by using the tax monies to build the infrastructure.
How much has Kavo accomplished for Gulf?
He mentioned that there was a need to change the oil and gas laws to ensure developers improve the lives of the people.
These developers are doing all they can within the boundaries of agreements and have contributed enormously to the nation’s development.
Kavo said the 22.5% they give back was nothing compared to the 72% the developers took home.
This statement is of paramount concern.
The only MP in parliament who was vocal on the change of the natural resources act to acquire 50% stake ownership is not Kavo but Boka Kondra who has the support of Mining Minister Byron Chan.
These two MPs have been as­sertive on this issue in the parliament and are trying to get support to amend the controversial resources act.
I never hear or see Kavo support these two MPs.
He seems to be sitting on the government backbench without contributing anything.
I wonder what his real motive is by attacking Shell, an outstanding world-class company.

Richard Makio
Via email