Mining, petroleum licensing criteria changes

By HELEN TARAWA
THE Government will be introducing a bill for a new Organic Law to move away from the current concession-based licensing system to a production-sharing arrangement for the mining and petroleum industries, Minister for Petroleum and Energy Kerenga Kua says.
Speaking in Parliament during the tabling of an Act on Oil and Gas (Amendment) Bill 2020, Kua said after the new Organic Law was passed by Parliament, the Government would be expected to introduce a number of new bills for a number of acts to provide details for the implementation of new policies.
He said the proposed 2020 Amendment Law was intended to alter key outdated sections of the Oil and Gas Act 1998.
“Those are sections that inhibit or frustrate the state’s ability to secure the best deal possible from PNG’s participation in oil and gas projects,” Kua said.
“PNG continues to be hamstrung by serious gaps or flaws in sections of the Oil and Gas Act which weakened any push under Section 25 of the National Constitution for national interest against commercial interest.
“It is our collective responsibility as members of the people’s House to ensure that PNG claims back on the disparity between national interest and commercial interest which the Oil and Gas Act encourages.
“Corrective measures should be taken at the basic or targeted level before having wholesale changes made.
“Parliament should begin with targeted approach that serves an immediate national interest agenda.”
Kua said one set of changes related to gaps in the sections of the Oil and Gas Act on applications for grants of petroleum development licences.
“These are gaps in the Act which weaken the state’s bargaining position when negotiating petroleum and gas agreements,” he said.
“The other set of flaws relate to the agreements to which the state is party under the Oil and Gas Act. Those agreements are given the status of law and given supremacy over the Act. Having such agreement prevail over the Oil and Gas Act.”