By DALE LUMA
THERE needs to be proper clarification under the new organic amendment in the Oil and Gas Act defining the state’s return, says Mineral Resource Development Company (MRDC) managing director Augustine Mano.
Responding to queries from The National, Mano said there needed to be proper consultations between all stakeholders.
He said provincial governments and landowners were a large component of this and currently there were a lot of landowner issues that needed to be addressed and proper definition was needed for equity and benefit sharing from resource projects.
“It was introduced in the recent amendments to the Oil and Gas Act and will feature prominently in the proposed new law on ownership of hydrocarbons and minerals,” Mano told The National.
“MRDC’s concern lies on the new organic amendment about ‘State returns’ where there is no clarity in provincial government and landowner participation.
“For example, there is no mention of landowner or provincial government equity.
“Even how much and the formula for royalty and development calculation is not included.
“Bottom line is there needs to be proper consultation with relevant stakeholders so lessons learnt in the current Oil and Gas Act can be incorporated to mitigate landowner legacy issues and risks.
“What everyone is entitled to needs to be clear before going to development forums to discuss benefit sharing between provincial government and landowners.”
MRDC is mandated by the Oil and Gas Act 1998 to manage project benefits for project area landowners which are held in trusts by corporate trustees which are subsidiaries of MRDC.
Speaking during the recent mining and petroleum conference in Port Moresby, Petroleum and Energy Minister Kerenga Kua said there were several issues with the country’s current resource laws that needs addressing.
These issues had compelled the Government to make recent changes to those laws.
Kua noted that some of the issues included:
- GIVING away resources, without any compensation flowing back to the State;
- BUYING back part of the resource (as equity) which was once fully owned by the State; and,
- GOING out to the money market to borrow substantial money to finance equity which then adds to the country’s already existing debt.