The mining and petroleum sectors have been big contributors to government revenue in past years and will continue to be the main revenue contributors, says Executive Director of the PNG Chamber of Mines and Petroleum, Greg Anderson.
Anderson said in a statement that the sector have also created thousands of jobs, often in remote locations that require the creation of significant infrastructure and provision of better education and health services.
He made this comments after the government proposes to make changes to the Mining Act.
Anderson said he is hoping that the Government will carefully consider the implications of these amendments for future economic growth and prosperity.
"In past years the Organisation of Petroleum Exporting Countries (OPEC) acted as a 'swing producer' to try and maintain higher oil prices. This role has been undermined in recent years by an upsurge in oil production from oil shale deposits in the United States.
"As a result the oil price has dropped from $US115 a barrel in mid-2014 to a current prices around $US30 with no evidence of any recovery in the immediate future.
“The price for LNG is usually determined by current market conditions in accordance with long-term contracts with an upper and lower price setting. Spot prices have fallen to about $US7.60 per million British Thermal Units (MMBtu)."
Anderson added that prior to the start of LNG exports in May 2014 gold had been PNG's top export item, except for a few years when high copper prices made exports from Ok Tedi, PNG's only copper producer, the top export earner.
However, the price of gold has fallen from about $ US1,900 per ounce in 2011 to a current price of around $US1,050. This drop of $US 850 an ounce represents a 45 per cent fall in export value. In the same period copper prices have fallen by 55 per cent, or $US2.50 a pound, to around US$2, and nickel prices have plunged 69 per cent from $US 13 per pound to less than $ US4 per pound.
"In this environment, many companies have been forced to severely cut operating costs,resource industry jobs have been lost and direct mining and petroleum taxes have fallen from K794 million in 2014 to K300 million last year from a peak of K2 billion in 2011," Anderson said, noting that this excluded tax payments from many companies that provide goods and services to the industry.