PNG LNG Project

Hides landowners have been waiting for over 25 years for their royalties. NCDC Governor Powes Parkop made this point in Parliament yesterday (Nov 26) afternoon when asking the Petroleum Minister, Kerenga Kua, about the progress of the LNG Project.

“Mi been lawyer blo ol landowners involve lo PDL 1-4 back in 1994. And many of these landowners i no kisim royalty blo ol inap i kam now. Because yumi gim excuse olsem i no gat social mapping na second olsem ol landowners i kot. Mi laik askim: What is the status of all these royalties? Social mapping em completed or not?”

He expressed this sentiment during the 10-year celebration of partnership between three landowner companies and the PNG LNG project.

ExxonMobil PNG on August 8^th hosted board and senior managers of the three landowner companies (lancos) of Hides Gas Development Company, Laba Holdings Ltd and Trans Wonderland Ltd at the PNG LNG plant site to celebrate a decade of partnership with the LNG project. Also at the celebration was fellow landowner and Prime Minister James Marape.  

The LOBID exercise, which was formerly known as clan vetting, is an important prerequisite, for a Ministerial Determination under s.169A of the Oil and Gas Act.

Minister Pok said; “The main objective of the LOBID exercise is to conduct a review with the potential beneficiaries in Hides and across the PNG LNG Project footprint, all the information on Project Area Landowners that have been collected, collated and finalised. This needs to be done so that Ministerial Determination is fulfilled, before any release of legislated cash benefits.” 

The book was presented to the Conservation and Environment Protection Authority (CEPA) as one of PNG’s only long term high biodiversity data sets for the country.

The book describes the biodiversity in the Hela and Southern Highlands provinces in 2015 as well as the methods used to undertake the biodiversity surveys. It highlights the large number of plants, frogs and mammals species found in two of the major provinces of PNG.

In a statement on July 20^th, Oil Search Limited Managing Director, Peter Botten, said the mid-term LNG SPA with PetroChina International (Hong Kong) Corporation Limited (PCI) is for a supply of approximately 0.45 million tons of  per annum (MTPA) of LNG over a three-year period.

This SPA takes the total contracted volumes from the Project to 7.0 MTPA, with 6.6 MT of PNG LNG's annual output already committed under long-term contracts to JERA, Osaka Gas, Sinopec and CPC.

Mineral Resources Development Company Managing Director, Augustine Mano, says the Ministerial Determination for the pipeline segments is the first step to realising the payment of royalties and equities.

He said if there are no objections then steps to begin payments will be initiated.

“The royalties are with the Central Bank, the only one that has been paid out to the plant site landowners,” Mano said.

“All the equities are with MRDC and we are just waiting for the clan vetting process to be done.

He said this during the company’s 2018 Annual General Meeting in Port Moresby yesterday.

Botten also highlighted their focus on the expansion opportunities and new developments, address benefit distribution issues and a major drilling program in Alaska.

Botten said following the devastating earthquake in February, they are well on track to restore full production of its operations.

Currently, he says they are at around 80 percent of oil production capacity.

The country has received K14 billion in revenue, with K3.9 billion paid to the state and landowner entities in royalties, development levies and equity payments.

Managing Director, Peter Botten, said landowner benefits of K708 million is held in trust waiting for the completion of landowner identification process.

Botten also said of the 15 licences covering PNG LNG Project areas, 12 are either receiving (Plant Site LOs) or close to receiving benefits. Three are held up by the courts.

The landowners said there is no formal agreement between them, the Government and ExxonMobil and called for a new agreement to be established to cater for their royalty payments.

The landowners are from the 16 ILG clans of the Komo airfield.

The landowners spokesperson Michael Tiki said the Government continues to fail the legitimate landowners by not honoring the UBSA and LBSA agreements in terms of royalty benefits, business development grants, Infrastructure Development Grants and High Impact Projects.

This drop is reflected in the shut in of Oil Search-operated production and the PNG LNG Project following the 7.5 magnitude earthquake that struck the PNG Highlands on 26 February 2018.

Oil Search has now revised its 2018 production guidance to 23 – 26 mmboe, while unit production costs are expected to be in the range of US$10.50 – 13.50 per boe and depreciation and amortisation charges are forecast to be between US$12 and US$13 per boe. Capital cost guidance has been reduced to US$425 – 520 million.