Twinza is urgently seeking clarity from the Minister for Petroleum, Kerenga Kua as to whether there is support for foreign direct investment into PNG and that the State will honour the deal of July 6.
The Government and Twinza agreed final terms for the Pasca A Gas Agreement, which were reflected in an agreement that both parties committed to use. Negotiations was completed last month and signing is pending.
The Gas Agreement delivers all of the Government’s stated objectives from the project and provide the highest State take of any resource development in PNG, with over 60 per cent of project value (55 per cent nominal State take) as announced by Minister Kua on July 13,
Chairman and CEO of Twinza, Ian Munro, stated that: “It is extremely disappointing that certain State actors appear to be following their own agendas rather than those of the Prime Minister, demanding new terms and revising terms that were announced on the 13th of July.
“Indeed, this is the third time since the negotiations commenced over 12 months ago that the SNT (State Negotiating Team) has changed agreed terms, which were originally announced by the Prime Minister on the 24th of September, 2020.
He said Twinza, as a company with a proud investment history in PNG, will naturally continue to honour the deal struck on the 6th of July.
“Other operators and investors are closely observing whether the Pasca Project can effectively navigate the State’s bureaucracy and vested interests of some individuals in the SNT, to progress toward FEED entry.
“Notwithstanding this setback to investor confidence in PNG, I remain hopeful that the Minister for Petroleum, an experienced lawyer, can ensure the State agencies honour the agreed terms to sign the first Gas Agreement under this Government.
“The signing would indeed set a new fiscal precedent for the industry and finally supersede the Papua LNG Gas Agreement, announced by the O’Neill Government some two and a half years ago”
Subsequently, the Prime Minister, James Marape announced on 13th of July, which negotiations had concluded, with a scheduled initialing of the agreement on 19th of July and signing on the 29th.
“After a month of silence on the State-side, the SNT Chairman returned an extensive mark-up of the agreement late on 6th of August.
“This document bears no resemblance to the agreement of 6th of July, containing over 2400 changes in only 76 pages, and is essentially a new agreement which was provided “with endorsement of SNT, State Solicitor and Minister Kua.”
Mr Munro said the agreement would be unacceptable to any investor and introduces new fiscal terms and conditions, several associated with Kumul Petroleum. This would make the Pasca A Project, or indeed any project in PNG, non-commercial and unfinanceable.
He said for reasons unknown to Twinza, it would appear that the Prime Minister’s strong support for the Pasca A Project, expressed most recently at the media conference of July 13, is not being actioned by the State Solicitor and is being openly undermined by elements within the SNT.
“This is both disappointing and surprising given that negotiations have concluded, and what should be a routine close-out process is being stewarded by the Minister for Petroleum, Kerenga Kua.”
