Mine negotiations to start

The National Main Stories

CABINET has endorsed a submission on the Pasca Offshore Gas/Condensate Project in Gulf and is ready to start negotiating a gas agreement with the operator Twinza Ltd.
Prime Minister James Marape last Friday said they also agreed that the composition of the state negotiating team (SNT) led by the Minister for Petroleum Kerenga Kua should be the same as the one for the Papua LNG and P’nyang project.
It is chaired by the Chief Secretary Isaac Lupari.
The committee members are Petroleum and Energy secretary (deputy chairman), Treasury secretary, managing director of Kumul Petroleum Holdings, State Solicitor, managing director of the Mineral Resource Development Corporation, Governor of Bank of PNG, Commerce and Industry secretary, and the commissioner general of the Internal Revenue Commission.
“The NEC (national executive council) has approved funding for the operations of the SNT and direct it to commence and conclude negotiations for the signing of a gas agreement over the next couple of weeks,” he said.
Cabinet endorsed Kumul Petroleum Holdings Ltd (KPHL) as the State nominee.
KPHL is at liberty to decide whether to take up the statutory equity of 22.5 per cent in the Pasca A project.
“Based on the Open Book Economic Model, the Pasca A Project cost projection ranges between US$2.5 and US$3 billion (K8.6-K10.3bil) to commercialise the gas resources with a provisional exploration expenditure (or sunk cost) of US$87.8 million (K302mil).
“The project is expected to provide better overall returns for the 10 to 12 years project production life span and while it is (relative to the PNGLNG and Papua) a small project, it is expected to contribute significantly to our economy over the life of the project.”
He said the gas agreement must be signed before a petroleum development licence was granted.

6 comments

  • I wish our government, Landowner and other PNG Businesses own more than 33 percent in the gas project. If not up to 45 percent stake shares ownership we PNG get.

  • The reality is the national government receives about 20% of the revenue through taxes once the project is operating. Plus the percentage for landowners and provincial government. If the national government wants a 16% interest in the project, they usually do not have the funds and need to borrow; they end up being “carried along” by the international company. If the landowners and provincial government claim 8% of the revenue and the national government 23%, plus the national government receives another 20% through taxes, they will be taking in 51% of the revenue. At that level it is no longer worthwhile for the international company to move forward with the project, because they have 100% of the upfront costs, and receive less than 50% of the proceeds.

  • You can’t just sit and talk. We own the resources yes, but business is business. If you want to take ownership, why don’t you put in the capital instead of sitting on your flat behind and expect free handouts just for owning the resources.

  • Eric gives a sorry explanation as why PNG should not demand anything for allowing its God given resources to be removed from the land or the sea.
    If you want to run a business on my land then you pay me a rent.
    My contribution is my land or ocean and the resource underneath that you desire to exploit.
    I don’t have to pay you anything.
    Why should anyone in this case the State of PNG pay anyone to come and take its resource?
    Tuna companies from America etc pay the South Pacific nations to catch in their economic zones. Those nations do not pay any company to come and fish in their waters. Why should that policy be different for mining companies?

  • QATAR ECONOMY

    Before the discovery of oil, the economy of the Qatari region focused on fishing and pearl hunting. A report prepared by local governors of Ottoman Empire in 1892 states that total income from pearl hunting in 1892 is 2,450,000 kran. After the introduction of the Japanese cultured pearl onto the world market in the 1920s and 1930s, Qatar’s pearling industry crashed. Oil was discovered in Qatar in 1940, in Dukhan Field.The discovery transformed the state’s economy. Now, the country has a high standard of living for its legal citizens. With no income tax, Qatar (along with Bahrain) is one of the countries with the lowest tax rates in the world. The unemployment rate in June 2013 was 0.1%. Corporate law mandates that Qatari nationals must hold 51% of any venture in the Emirate.
    As of 2016, Qatar has the fourth highest GDP per capita in the world, according to the International Monetary Fund.It relies heavily on foreign labor to grow its economy, to the extent that migrant workers compose 86% of the population and 94% of the workforce.Qatar has been criticized by the International Trade Union Confederation.The economic growth of Qatar has been almost exclusively based on its petroleum and natural gas industries, which began in 1940.Qatar is the leading exporter of liquefied natural gas.In 2012, it was estimated that Qatar would invest over $120 billion in the energy sector in the next ten years.The country was a member state of Organization of Petroleum Exporting Countries (OPEC), having joined in 1961, and having left in January 2019.
    High-rise buildings in Doha.
    In 2012, Qatar retained its title of richest country in the world (according to per capita income) for the third time in a row, having first overtaken Luxembourg in 2010. According to the study published by the Washington-based Institute of International Finance, Qatar’s per capita GDP at purchasing power parity (PPP) was $106,000 (QR387,000) in 2012, helping the country retain its ranking as the world’s wealthiest nation. Luxembourg came a distant second with nearly $80,000 and Singapore third with per capita income of about $61,000. The research put Qatar’s GDP at $182bn in 2012 and said it had climbed to an all-time high due to soaring gas exports and high oil prices. Its population stood at 1.8 million in 2012. The same study published that Qatar Investment Authority (QIA), with assets of $115bn, was ranked 12th among the richest sovereign wealth funds in the world.
    Qatar Central Bank’s office in Doha.
    Established in 2005, Qatar Investment Authority is the country’s sovereign wealth fund, specializing in foreign investment.Due to billions of dollars in surpluses from the oil and gas industry, the Qatari government has directed investments into United States, Europe, and Asia Pacific. As of 2013, the holdings were valued at $100 billion in assets. Qatar Holding is the international investment arm of QIA. Since 2009, Qatar Holding has received $30–40bn a year from the state. As of 2014, it has investments around the world in Valentino, Siemens, Printemps, Harrods, The Shard, Barclays Bank, Heathrow Airport, Paris Saint-Germain F.C., Volkswagen Group, Royal Dutch Shell, Bank of America, Tiffany, Agricultural Bank of China, Sainsbury’s, BlackBerry,and Santander Brasil.

    The country has no taxes on non companies, but authorities have announced plans to levy taxes on junk food and luxury items. The taxes would be implemented on goods that harm the human body – for example fast food, tobacco products, and soft drinks. The rollout of these initial taxes is believed to be due to the fall in oil prices and a deficit that the country faced in 2016. Additionally, the country has seen job cuts in 2016 from its petroleum companies and other sectors in the government.

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