PETROLEUM Minister Kerenga Kua says certain areas in the laws on the resource sector must ensure that investors, the State and people benefit from projects.
He told a radio show in Port Moresby yesterday that the laws needed to be reformed so that the Government need not borrow to finance commercial projects.
He said when the State signed a project agreement, it forfeited its ownership over the resource thus giving away 100 per cent ownership to the developer.
As a result, Kua said he was keen to see some changes made to the laws to address:
- Losing ownership rights without any compensation;
- Increasing debt level; and,
- Generating more revenue for the people.
“We want to reform the structure of mining and petroleum laws that underpin how the business is conducted and how we all can benefit out of it – the investors, people and the government,” Kua said.
“Investors are more concerned about their rate of return. If they put in K1 billion, they want their profit to be better than over investment destinations. If they were to put money into PNG, we must give them the confidence.”
He said landowners had their dreams to do business.
“So if we are to sell their resource, we have to give them a bigger benefit. We have to extend consultations to the investors and the people.
“Every time there is a mining or petroleum project, when you sign a development agreement you forfeit the ownership of that resource.”
He said the legislation was before Parliament.
“We need to remove borrowing to finance commercial projects in the mining and petroleum,” he said.
“State ownership in minerals and petroleum will remain all the way to the point of sale. We will not transfer ownership on the signing of a gas agreement and mining development contract. All costs for project must be financed by the project.”