PNG has 'best' law for petroleum industry

Papua New Guinea has one of the best laws governing the petroleum sector, says an industry expert.

“The Oil and Gas Act  makes PNG attractive for investors,” said Mick McWalter, when speaking at the PNG Extractive Industries Transparency Initiative workshop today.

He gave an example of the tax regime which is not fixed but fluctuates in every financial year depending on the investor’s income.

“Royalty payment to landowners is not a big issue because it is straight across the board.”

Under the Act  resource owners have 2 percent equity in all resources found on their land and the percentage is paid as royalty to them.

However, McWalter said a system must be set up where genuine resource landowners receive their royalties on time. 

“No direct equity is paid directly to landowners but must first go to MRDC Trust and all process must properly manage well, that’s where I have concern.”

Mineral Resource Development Corporation (MRDC) is set up by an Act of Parliament and its responsibility is to manage and invest resource landowners’ royalties for their future benefits.

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