GOV’T GIVES EARLY XMAS GIFTS TO LOs
The Papua New Guinea Government and five PNGLNG-impacted provincial governments as well as landowners today received a whopping K551.82 million through the country’s leading oil and gas company, Kumul Petroleum Holdings Limited (KPHL).
Prime Minister, James Marape was presented a cheque of K200 million on behalf of the State while the five provincial governments were presented cheques totalling K62.635 million. Landowners from these provinces will also be receiving a total of K189.189 million.
In a momentous presentation ceremony that pointed to the strength of equity ownership as espoused by Prime Minister Marape, these dividends – benefits directly from the PNGLNG project agreement – was presented to the beneficiaries.
PM Marape received for the National Government and provincial governments whose governors were not present, while witnessing Gulf and Southern Highlands governors Chris Haiveta and William Powi express their gratitude at the “long-awaited, two governments-later” payments.
With the non-transfer of the 4.27 percent equity as agreed to under the Kokopo UBSA in 2009 since 2014, Prime Minister Marape’s Government directed KPHL to honour the spirit and intent of the PNG LNG project agreement which has seen PNG rack up to K5.2 billion since the first gas shipment in 2014.
This preferential dividend of K281.82 million is to acknowledge the fact that the National Government since 2013 has failed to allow these beneficiaries to exercise their purchase options and the State, instead, used the 4.27 percent parcel of equity from 2014 into the failed UBS loan for Oil Search Ltd Shares and on other government commitments.
The Marape Cabinet, thus, directed KPHL to reconcile ‘opportunity cost’ and ‘time value’ losses and for the five PNGLNG provinces and their landowners to be accorded due benefits now and going forward into the future.
The State was earlier this year presented with a cheque of K100 million, bringing the total to K300 million with this payment as per the KPHL 2021 annual operating plan and consistent with national budget 2021.
Based on the percentage distribution, Hela provincial government was paid K28.5m, SHP K19m, Gulf and Central K6.3m each, while Fly River received K2.52m. Altogether this totals K62.635 million.
In a press statement today, Prime Minister thanked and commended KPHL, its board and management, while calling the company “flagship company of PNG”.
He said the delivery of the Kroton equity and other benefits has been outstanding for a long while and it was good to see this being addressed finally.
He added that the delay in the delivery of this 4.27 percent equity was one of the reasons for his exit from the previous PNC-led government.
“It is very unfortunate that $291 million or over K1 billion of what would have been the 4.27 percent Kroton equity money was squandered through the O’Neill submission that his cabinet approved for the ill-fated Oil Search shares. It was painful, “ he said.
“That is why today is a beautiful day to witness this happen, as we continue to take back more of our resources for our people. This is one tick off on my commitments to our country.”
The Prime Minister has urged that the five provincial governments spend the monies wisely to develop their provinces which still remains far from being developed despite carrying PNG’s oil and gas productions since 1990.
In the meantime, PM Marape has instructed KPHL to detach the 4.27 percent fully and set up a separate subsidiary structure to manage investments and pass through benefits for the beneficiaries.
He has indicated that additional equities that might be available in PNGLNG, Papua LNG or P’nyang gas resources subject to negotiations his government is holding with present joint-venture partners and will present greater opportunities for more equities for Kumul, provincial governments and landowners going forward.
It is this subsidiary holder of 4.27 percent that will hold additional equities moving into the future for our provinces and land owners of Western, Hela, SHP, Gulf and Central provinces.
The Prime Minister has called on all provincial governments and landowners to establish this permanent structure outside of Kumul to manage their equities in those projects.