Opposition Leader Patrick Pruaitch has welcomed the decision by Oil Search to discuss the future sale of domestic crude oil to the Napa Napa refinery in Kina, rather than US dollars.
Pruaitch says he stood by his earlier statement that it is in the national interest for locally produced resources such as crude oil, copper, gold, fishery and forest products, to be sold to local purchasers in PNG’s national currency, the Kina.
Pruaitch believes it is an infringement of our sovereignty for lenders, or any other entity, to insist that domestic resources have to be paid for in US dollars or other foreign currencies, even when sold to PNG buyers.
Such arrangements add to the cost of doing business and hamper efforts to encourage domestic processing.
“If it is true that lenders to Oil Search or the PNG LNG Project made this a requirement of their loan, the government of the day should disallow this practice in future.”
Pruaitch says he was not convinced by the Oil Search assertion that LNG project lenders had a loan condition that gas and condensate sold by the project must be priced in US dollars.
“I am fairly sure PNG Power is not paying in US dollars for gas used by ExxonMobil to generate electricity for Port Moresby. This should also not be the case for gas-fired power from Hides that Oil Search sells to the Porgera gold mine.”
He states under the 100-Day Plan announced by PNG Treasurer Charles Abel, it was disclosed that discussions are underway for Puma Energy, operator of the Napa Napa oil refinery, to pay for 50 percent of crude oil and condensate purchased from Oil Search in Kina.
Acting Prime Minister Abel on Tuesday confirmed this arrangement when meeting with provincial governors in Port Moresby.
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