The National, Tuesday 30th April 2013
THERE is a push to withdraw the shareholding by five provinces in the PNG LNG project, Hela Governor Anderson Agiru said yesterday.
He said this is to avoid the provinces’ shareholding of 4.22% being diluted under present moves by the O’Neill government to consolidate and restructure state interests in mining and hydrocarbon assets and state owned enterprises.
The provinces are: Hela, which will provide the bulk of the gas resources for the LNG project; Western, where the Juha gas reserve is found from which will come gas for the next train for the project; Southern Highlands, which owned the petroleum and gas projects before separation of Hela; Gulf, through which the oil and gas pipelines run; and Central, which is host to the LNG plant and processing site.
The cabinet on March 14 made a decision to restructure the entire mining, oil, gas, state owned enterprises and sovereign wealth fund structure as they exist today.
Among others, the cabinet gave approval to:
l Consolidate state mining assets and interests in all projects under a company called Kumul Mining Holding Ltd;
l Consolidate all state interests and assets in all petroleum projects under a company called Kumul Petroleum Holding Ltd; and
l Consolidate all state-owned enterprises under a company called Kumul Corporations Holding Ltd.
In all these, a Kumul share in the company would be held by the serving prime minister who would have veto power and all former prime ministers would jointly hold an ordinary share with the Kumul share and the ordinary shares held under a trust to be called the Kumul Trust.
The Kumul Corporations Holding would be a holding company for all state-owned enterprises but Kumul Mining Ltd and Kumul Petroleum Holding Ltd would carry on business, including exploration and upstream, midstream and downstream processing of mining, petroleum and gas interests.
The cabinet also decided to repeal and dismantle Petromin PNG Holdings, Independent Public Business Corporation and the Sovereign Wealth Fund in their current format.
The decision provides for enactment of various enabling acts of parliament and amendments to the organic laws and the Constitution as necessary to provide for the consolidation and restructure.
Agiru said he shared his concerns with fellow governors who were fearful that the consolidation and restructure might dilute their shareholding through state-owned Kroton.
“I think what the prime minister is doing is mature and my United People’s Assembly supports this decision but the provinces have to pay for our interest at sunk cost by 2016,” he said.
The governor said the provinces’ interest would cost about US$400 million or nearly K1 billion.
He said the provinces needed government approval to set up their own companies and independent boards and move their interests there.