Landowners urge govt to review royalty arrangements

By PETER ESILA
LANDOWNERS of the Petroleum Development Licence (PDL) 7 in Hides want the Government to review arrangements so they can benefit more from their resources.
Umbrella Hides PDL 7 association chairman Eric Hawaii Ako said in Port Moresby yesterday that there were too many deductions on royalties which resulted in only K19.7 million paid in Hela this month.
The landowners agreed that it had been a long wait of 10 years but the royalties did not add up.
They have demanded a review of the umbrella benefits sharing agreement (UBSA) and Licence-Based Benefits Sharing Agreement (LBBSA) and the removal of the 28 per cent royalty component given to the pipeline and plant site landowners capped in the UBBSA.
They also called for a review and removal of unnecessary costs imposed by ExxonMobil PNG Ltd such as capex (capital expenditure) and opex (operating expenses) and the premium on capital cost on the two per cent royalty.
The landowners also want to their royalty to be exempt from unnecessary corporate income tax.
They also asked for an explanation of why they were left with 0.5 per cent of the royalty and what happened to the other 1.5 per cent.
They want the Government to put a hold on the current royalty payments until further legal clearance on the validity of the payments was done.
Additionally, they want the 4.27 per cent Kroton equity to be paid in cash to compensate the loss on royalty for this period payments.
The landowners also called for a new board of directors to be established for the Kroton Equity Company apart from the block leaders represented by Mineral Resources Development Company.