MRA-type structure eyed for Dept of Petroleum and Energy

THE PNG Chamber of Mines and Petroleum is fully supportive of the national government’s decision to review the Department of Petroleum and Energy and implement a Mineral Resources Authority-type structure.
The chamber, in an information paper on PNG’s oil and gas industry released yesterday, said it appreciated successes notched up by the MRA in administering the regulatory regimes for mining activities.
“For some time, there had been concern within the industry about decision-making with regards to the granting of petroleum exploration licences, and the rules governing petroleum retention licences,” it said.
“Greater transparency is required in the processes applied by the petroleum regulatory body and a move towards an MRA-type structure is seen as beneficial in this regard.
“This concern is reflected in the 2012 report of the authoritative Canadian-based Fraser Institute, which downgrades PNG as a destination for international petroleum investment.
“The report states that PNG is among a number of countries where barriers to investment had increased in the past year.”
The chamber also believes the successful execution of the PNG LNG project will demonstrate that the country is an attractive destination for investment
It said progress to date on the project had encouraged renewed interest in exploration and a number of other gas developments were under evaluation.
“Although crude oil production and exports had been declining steadily for many years, PNG is on the cusp of seeing significant increases in production capacity,” it said.
“Besides an additional 20,000 barrels a day of condensate coming on stream in 2014 with the start-up of the PNG LNG project, condensate production is also proposed in the next three to five years from the Stanley and Elevala-Ketu fields in Western and from the InterOil operations in Gulf province.”
The chamber said like the national government, PNG’s oil and gas industry was keen to see the sector contribute positively to the country’s social and economic development.
“This requires a policy framework that supports transparency and accountability in line with best international practice,” it said.
“In this regard, the chamber and its members are fully supportive of the national government’s ‘platform for action’ agenda drawn up at its Alotau post-election meeting.
“The chamber welcomes the national government decision to review current arrangements with landowners and the Department of Petroleum Energy and Department of National Planning, to ensure that the benefits prescribed in the project agreement with regards to royalties and infrastructure grants achieve their outcomes
“The chamber also welcomes the decision to consult with foreign investors and landowners when reviewing the Mining and Oil and Gas acts.”