Amendments will be made to the Oil and Gas Act following a review exercise to identify how benefit streams contained in the act are not suitable to off-shore gas projects.
Acting Secretary for the Department of Petroleum and Energy, Kepsie Puiye, tells Loop PNG that process is ongoing and amendments could be made to sections of the act, such as the benefit streams.
He said current potential off-shore gas projects such as ‘Pasca’, which lies within the periphery of the Gulf Province boundary, would see a change in how benefits are shared between the Province and the state.
For example, one of the clauses of the oil and gas act is for a free carry equity royalty of two percent for landowners. However, there are no landowners living 100 kilometres out at sea where the off-shore gas field is located.
“Whether there are landowners or not, when dealing with off shore projects, yes we’ve looked at that. A good example is the Pasca Gas Project. Pasca is a small gas field operated about 100 kilometres outside of the borders of Gulf.
“But there’s a provincial government in place. So we will work very closely with the provincial government where the gas fields are located.”
Puiye says through the provincial government administration arrangement, they can look after the whole population.
“So having a project off-shore is really a good thing because then you’ll divert the two percent to the entire province so everyone benefits, and not just a small group of people,” he states.
However, Puiye says there is a distance limit within the provincial boundary and if it enters state waters then that is something to deliberate on.
“Obviously we will make amendments to the oil and gas act based on the needs that we are seeing as part of that review exercise. How to deal with certain benefit streams like the royalty and development levy, the amendments will actually address that,” he added.
Loop PNG file photo