Oil Search maintains it pays tax

Prime Minister James Marape recently urged Oil Search to pay its fair share of tax owed to the Government and people of Papua New Guinea.

“I like to believe that PNG governments in the past and present have had quite a significant input into what Oil Search is today and without that support, Oil Search shares will still be pegging along the same track as Santos and many of the companies operating in the country,” Marape said at Oil Search’s 90-year anniversary gala dinner event in Port Moresby.

“I want to pay my respects to the landowners of the entire areas in which Oil Search has operated since 1929, some of them here tonight, me included.

“But as we sit in the porch, affluent modern 21st century environment, tossing to the occasion lest we forget the tribesmen and women whose territory we operate in are still living a life of the 19th century,” said Prime Minister Marape.

He urged Oil Search and other companies in the oil and mining industry to have the landowners involved in the downstream processing of their resources.

In his speech, the Prime Minister mentioned that the oil and gas industry must respect PNG laws, policies and regulations so the people as shareholders can benefit.

“(A landowner) deserves the same life you live in Port Moresby. A life where easy access to medicine is there for them; life where better school not just school and free education but school with quality interventions; life where when traveling on sealed roads; life where electricity is in the houses and homes,” said Prime Minister Marape.

He also thanked Oil Search for many of their interventions in communities where it operates, but placed on record that it was not its core mandate.

Prime Minister Marape said: “You are doing that out of generosity and heart and obligations because you are living in those environments. So going into the future we will not be asking much of you in terms of community service obligations but we will be asking you to pay your fair share of tax.

“We will be asking you and others in the industry for a greater participation in downstream processing; we will be asking you for clearer better definition of what local content is.”

Oil Search, in response, made a number of statements, including giving support to the call by Prime Minister Marape for companies such as itself to pay its fair share of tax.

Oil Search stated that it has long supported revenue transparency and applies a consistent approach to integrity and transparency matters, including making available its 2018 Transparency Report that brings together information on all payments made to governments and socio-economic contributions and describes the company’s approach to tax transparency.

The company also said it maintains a transparent and constructive dialogue with government and tax authorities, regarding its tax approach and disclosures.

Above all, Oil Search stressed it pays taxes in full compliance with the letter and intent of the laws that govern its operations.

Oil Search reported that in 2018 alone, the company contributed K1.5 billion to socio-economic development in PNG, of which K218 million was in community investment, among others.

Between 2013 and 2018, the company spent K309 million in delivering community development programs focused on power, education, health and enterprise development.

The Oil Search Foundation was donated K200 million to support the PNG Government deliver and strengthen services in health, women’s protection and empowerment, education and hygiene.

Other expenditures include K903 million on Infrastructure Tax Credit Scheme projects.

Meantime, Prime Minister Marape stressed that from the hinterlands of Southern Highlands to the floors of Kikori plains and right down to Port Moresby, the stories are similar right across the country.

“’For those who are left behind, their children will haunt the memories and will haunt our future and that is the challenge we face about giving opportunity to those out there to celebrate life.”

(Oil Search file picture)

Salome Vincent