Payment awaiting audit: Mano

PAPUA New Guinea liquefied natural gas (PNG LNG) landowners from Hides 4 Petroleum Development License Seven (PDL7), will receive their outstanding equity payments this year once audits are completed, according Mineral Resources Development Company (MRDC).
Managing director Augustine Mano told The National yesterday this would be in line with equity payments for plant site and pipeline landowner payments.
He said royalty payments from Gobe, Kutubu, Moran, Hides PDL1 (Petroleum Development License 1), Juha and Angora were still outstanding and kept with the Bank of PNG.
“It is quite difficult to give exact numbers because royalties are kept in trust with the Bank of PNG while equities are held by MRDC which need to be reconciled,” Mano said.
“PDL 7 landowners were paid all their royalty entitlement from end of 2014-2021.
“The equities were paid from 2014-2016 only and have another five year payment still outstanding.
“Now the equity payment are in line with pipeline and plant site landowners’ payment.
“The balance of the equity payment (2017-2021) will be paid this year when the audits are completed.
“Pipeline and plant site will also be paid their five years outstanding equity.
“Pipeline and plant site landowners will also be paid their outstanding royalties which is still with Central Bank (2019-2021).
“Note that both landowners were paid separately in 2018-2020 from their 2014-2018 royalty entitlement.
“It’s a pity no interest is earned on the funds when kept in trust.
“There are so many formulas for distribution to various beneficiaries which different State institutions pay so these need stakeholder alignments before disclosing figures.
“For example, royalty entitlement for provincial governments and LLGs local level governments) is paid by Department of Petroleum and Finance and not MRDC.
“In the distribution, the equity payment will be much higher than royalty every year.
“The main reason why royalty is small compared to the oil project is because the PNG LNG project deducts almost 70 per cent of two per cent royalty in the form of capex, opex and premium on capital.
“Unfortunately, this formula has been agreed in the Gas Agreement so we can’t change.
“The balance is converted to 100 per cent and 28 per cent given to plant and pipeline under UBSA.
“The 72 per cent is again converted to 100 per cent and 30 per cent given to provincial and LLGs.
“Final 70 per cent is converted to 100 per cent and divided into 40 per cent cash, 30 per cent CITF (community infrastructure projects) and 30 per cent FTT (Investments for Future Generation).”