Marape responds to issues raised by Governor Haiveta over delays to LNG project

Tuesday 26 May 2020

Prime Minister James Marape today noted  Gulf Governor Chris Haiveta’s concerns over  resource project delays, particularly in regard to the P’nyang LNG project.

“Unlike in the past where Prime Ministers and powerful parliamentarians have bulldozed through long term project agreements, where the State gives too much away in terms of revenue concessions, I choose to defer and take considered advice,”  Prime Minister Marape said.

The Prime Minister noted that Departments and industry are best placed to provide advice to Government, but that more must be done to ensure that everything possible is gained from critical resource projects.

“Instead of chasing the dreams of so -called  billions of Kina under hasty agreements that give our rights away, we should ensure that we safeguard our nation’s interests and the wealth of generations to come,” Mr Marape said.

Mr Marape said  that  he shared Governor Haiveta’s genuine concern for the State to secure a project agreement for P’Nyang, but indicated that the Governor understands his publicly stated view that the long term financial security of our country must not be sacrificed for short lived and short term gains.

“Governor Haiveta has been involved in our continued State Negotiation work. He knows what we have put to ExxonMobil so far”, Prime Minister Marape said.

The Prime Minister indicated that the P’Nyang discussions have not stopped Papua LNG from progressing, noting that the two projects are “fields apart”.

He suggested that if Papua LNG equity partners and beneficiaries want to find project synergies, then appropriate responses to the Government’s  position on P’Nyang must be honoured by ExxonMobil.

“Gone are the days when agreements are concocted in the inner chambers of a few ‘high and mighty’ individuals.

“Our Government is committed to ensuring  that negotiations are undertaken through the eyes, minds and hands of  specialised officials who have the expertise to provide the best advice to Government”, the Prime Minister said.

The Prime Minister noted that under the approach pursued by his Government that the advice of experts including those in the petroleum sector, the State Solicitor, Kumul Petroleum Holdings, Mineral Resource  Development Company (MRDC) and other relevant offices were playing a critical role as part of the State Negotiating Team.

“Since 31st May 2019 we have had many progressive meetings on P’Nyang and all other resources projects including Wafi Golpu, Porgera, Pasca, and we continue to remind Total of the need to progress discussions on Papua LNG.

“ These delays, as painful as they are in the short term, are necessary.  Simply put, under my watch our country will not continue to give revenue concessions away as we did with PNG LNG and Papua LNG”, Prime Minister Marape said.

The Prime Minister noted that on a positive note, negotiations between the State Negotiation Team and Exxon and Oil Search are turning in the right direction, particularly through the agreed Domestic Market Obligations (or DMO)  that allows for cheaper power and fuel and additional state equity.

“We will shortly be sending Exxon our final position”, the Prime Minister said.

The Prime Minister paid tribute  to Minister Kerenga Kua, Ambassador Isaac Lupari and the State Negotiation Team for their continued efforts in ensuring that the Government’s mandate is achieved so that negotiations can conclude.

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