Landowners must invest for future

AS the country’s status in the regional energy market becomes more prominent, resource landowners have to move away from being passive recipients of royalties.
It would be illogical for the custodians of that which earn premium returns for the country to remain in their state of dependency on the State and project developers.
They should become active participants in the various stages of project development and value chain in the production and sale of the resource
For this to happen they need assistance from the Government and stakeholders.
What we have seen so far is that landowner participation has been related to fringe or allied business activities.
A Petroleum and Energy summit in Port Moresby some time ago was told that demand for liquefied natural gas (LNG) could double by 2030.
This is great news for the country as by then, there would be a second LNG supplier and national gas incomes would have increased tenfold.
Japan will continue to be the biggest buyer of LNG in the Asia-Pacific region.
This was announced by a Japanese government official a few years ago.
It is good to see the Mineral Resources Development Company (MRDC) encouraging landowners to participate in large energy developments such as the LNG.
It is encouraging to see the MRDC shifting its focus from managing landowner benefits to active participation by owning and or managing one or more elements of the value chain in especially the energy sector projects.
Landowners need to be considered as able partners and treated with dignity and respect.
Opportunities and empowerment are the key to this partnership rather than narrow commercial interests and the doubt of the past.
The country is increasingly becoming a key player in the energy sector, thus it is crucial that it has a master plan which clearly outlines parameters for downstream processing, access to resources, ownership of oil and gas supply and power generation and supply.
An effective domestic market obligation and state-ownership of value chain from gas supply to generation are essential elements of the gas master plan.
Through its project-specific subsidiaries, MRDC currently holds 2 per cent participating interest in Gobe oil project, 2 per cent in Moran oil project, 6.75 per cent in Kutubu oil project and 2.80 per cent in the PNG LNG project.
Its mining interests include 33 per cent equity in Ok Tedi Mine, 2.5 per cent in Ramu nickel and cobalt mine and 5 per cent in Porgera gold mine.
The combined value of these interests constitute quite a handsome sum by any PNG landowner group’s reckoning.
Converted to cash or otherwise, these interests can easily be used as bargaining chips for landowners to participate in any future venture in the extractive industry.
Last week we witnessed the payment of millions of kina to landowners in Gulf.
How they will use the money is their business.
But they should be provided some guidance in that regard, such as investments, lest they spend everything on things which will not generate any returns for them and their children.
Landowners should remain passive recipients of project royalties forever. They own the resources and given adequate financial and technical backing, they should also be investors themselves.
They should become more aggressive to own companies in the oil and gas sector.
That is the only way they can fully benefit from their resources.