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The PNG Customs Service and EastWest Transport (EWT) have signed a Memorandum of Intent (MOI) for the trial implementation of the Trusted Trader Program (TTP) marking a significant step towards securing, streamlining and facilitating legitimate trade in PNG. The MOI was signed at the PNG Customs Headquarters at Waigani last week by Customs Chief Commissioner David Towe and EWT General Manager Nicholas Bury, enabling EWT to become the third freight forwarder to participate in the program in PNG. The TTP, also known as the Authorized Economic Operator (AEO) program, has become a flagship Customs-Business partnership in many countries around the world and is a key initiative under the World Customs Organization's (WCO) SAFE Framework of Standards, which outlines standards for securing and facilitating global trade. Under the program, businesses become recognized as trusted traders by Customs administrations around the world after meeting specific security and compliance standards. Trusted traders typically receive benefits like expedited Customs clearance, reduced inspections and other preferential treatment. "This program is designed to optimize trade security while allowing for seamless movement of goods across borders, thereby minimizing Customs intervention," Chief Commissioner David Towe stated. "Increased Customs intervention at the border raises the cost of doing business, thus, this program aims to secure trade, reduce Customs intervention, and lower business costs. "Given the rising cost of goods and services, Customs is seeking ways to alleviate such burdens," the Chief Commissioner added. The Chief Commissioner said EWT is the third freight forwarder in PNG to participate in the trial program highlighting the importance of public-private partnership in streamlining trade processes. The other two freight forwarders are Express Freight Management and Lae Inland Logistics. "The journey began in October of 2023 when EWT expressed its' interest in joining the program," Customs Assistant Commissioner Compliance and Procedures Roselyn Tei stated. "Following the request, PNG Customs conducted multiple internal compliance assessments and site validations to ensure EWT's security standards were in compliance with the WCO's SAFE Framework of Standards." "We appreciate EWT's commitment and the efforts and resources put together to meet our requests and security requirements," the Assistant Commissioner added. EWT General Manager Nicholas Bury expressed gratitude for the opportunity to join the trial program and emphasized the importance of collaboration between businesses and Government. "While working in PNG over the years I have witnessed increased engagement with the Customs team and everything said here today has resonated with me," Mr. Bury said. "We are strong believers in working together to deliver efficient and cost-effective services to PNG companies and consumers." He added that EWT has made significant investments to align with the program's requirements and is committed to passing on the resulting cost savings to the end consumer. "In a time of increasing cost, programs like this will make a huge difference", he said. EWT and PNG Customs are eager to continue working together as Customs progress and finalize the legal framework of this program. Following the engagement of the third freight forwarder under the TTP program, the next plan for PNG Customs is to bring onboard importers and exporters.

The former Minister for Mining, Hon. Wake Goi MP, recently issued his final announcement, marking the end of his tenure by confirming the processing of outstanding tenement license applications on April 25. A total of 38 license applications were approved, with only three applications rejected. The companies with approved licenses are major industry players like Newcrest Exploration Limited (EL1704), K92 Mining Limited (EL1341), Frieda River Limited (EL1956, EL1957, EL1895), and Lihir Gold Limited (EL485). Small-scale and individual miners also secured approval. Three rejected applications were by Zhong Rui Kuang Ye (PNG) Co. Limited (EL2647), Muta Angas (AML142), and Aking Soap (AML591). The following tenement applications listed are finalized: OUTSTANDING TENEMENT LICENSE APPLICATIONS PROCESSED DURING THE MINISTERIAL TENURE OF THE FORMER MINISTER FOR MINING, HON. WAKE GOI MP.  No TENEMENT APPLICANT LICENSE NUMBER STATUS 1 Amai Waimayoko AML 753 APPROVED 2 Amai Waimayoko AML 754 APPROVED 3 MCC Ramu Nickel Limited EL 2376 APPROVED 4 Newcrest Exploration Limited EL 1704 APPROVED 5 K92 Mining Limited EL 1341 APPROVED 6 Cheroh Mining PNG Limited EL 2396 APPROVED 7 Kainantu Resources Limited (KRL) EL2558 APPROVED 8 Salt Baker Limited EL 2822 APPROVED 9 Parson Kabo ML 304 APPROVED 10 Gnaibo Kaiuk ML 200 APPROVED 11 Gewasa Tukund ML 199 APPROVED 12 Denganu Kapukawa AML 1096 APPROVED 13 Attalus Geasa ML 178 APPROVED 14 Samuel Atsi AML 1157 APPROVED 15 Kipson Lane AML 1167 APPROVED 16 Shalom Mala ML 174 APPROVED 17 Shalom Mala ML 173 APPROVED 18 Wakula Bilebile ML 243 APPROVED 19 Bulolo Small Scale Mining Corporative Society Ltd ML 557 APPROVED 20 Rockwell Mining Company Limited EL 2810 APPROVED 21 Rockwell Mining Company Limited EL 2811 APPROVED 22 Tolu Minerals Limited EL 2780 APPROVED 23 AG Investment Limited EL 2799 APPROVED 24 Amato Asimi, Kwambiko Aimou & Yatapsa Kaimaeto ML 419 & ML 427 APPROVED 25 Gamari Lingwaku ML 1119, ML 1120, ML 11121 APPROVED 26 Moses Monogon AML 132 APPROVED 27 Joe Barwick AML 1026 APPROVED 28 John Giasa AML 1035 APPROVED 29 Api Emmanuel AML 1098 APPROVED 30 Tolu Minerals ML 104 APPROVED 31 Zhong Rui Kuang Ye (PNG) Co. Limited EL 2647 REJECTED 32 Muta Angas AML 142 REJECTED 33 Aking Soap AML 591 REJECTED 34 Meka Yamo ML515 APPROVED 35 Martin Kilimbu AML 643 APPROVED 36 Lihir Gold Limited EL 485 APPROVED 37 Frieda River Limited EL 1957 APPROVED 38 Frieda River Limited EL 1956 APPROVED 39 Frieda River Limited                                    EL 1895 APPROVED      40 Tolu Minerals Limited EL 2662 APPROVED 41 Kumul Investment Limited EL 2806 APPROVED   In addition, MP Goi confirmed that any remaining matters from his office will be returned accordingly. He also stated that the mining vehicle and all assets related to the Mining Ministry will be officially handed over on April 28. Minister Goi said, “Settling these matters is important for maintaining good governance, accountability, and transparency in the administration of the mining sector.” The approved licenses will make way for further exploration and production activities in the country. MP Goi has encouraged all license holders to begin preparations for their respective work programs and to work in collaboration with the Ministry of Mining, the newly appointed Minister -- Hon. Rainbo Paita -- and the Mineral Resources Authority, further thanking the Marape-Rosso Government for their support.  

ExxonMobil recently appointed Dinesh Sivasamboo as its new Chairman and Managing Director of ExxonMobil PNG Limited. This appointment will be Sivasamboo’s second leadership position with ExxonMobil PNG Limited, having previously served in PNG from 2016 to 2019 as its Vice President for Production. Sivasamboo has held numerous, global senior leadership positions over the course of his 30-year career at ExxonMobil. Most recently, he held the position of Chairman and President of ExxonMobil Exploration and Production Malaysia Inc. Prior to that role, he was the President and Managing Director of ExxonMobil Kazakhstan Inc., and held positions in Qatar and the United States. “I am honored to be returning to PNG as Chairman and Managing Director of ExxonMobil PNG Limited. The PNG LNG Project has – through the strength of its partnerships – achieved so much during its first decade,” said Sivasamboo. “I look forward to both leading it into its second decade, as well as building upon its success to help deliver the next phase of LNG projects for this country.” Sivasamboo becomes the company’s fifth Chairman and Managing Director, joining an esteemed list that includes his immediate predecessor, Tera Shandro, as well as Peter Larden, Andrew Barry and Peter Graham.

Prime Minister Hon. James Marape has reaffirmed his government’s commitment to energy reform, economic transformation, and responsible leadership as Papua New Guinea approaches its 50th year of independence. The Prime Minister was speaking at the National Power Sector Forum, jointly hosted by the Government of Papua New Guinea and the Asian Development Bank (ADB) at APEC Haus in Port Moresby. The Forum—the first of its kind in PNG—gathered more than 100 key national and international experts, including government officials, industry leaders, and development partners, to discuss power sector priorities and solutions for achieving reliable, affordable, and sustainable energy to support inclusive and comprehensive growth. Addressing this high-level gathering, Prime Minister Marape expressed deep gratitude to the people and businesses of Papua New Guinea for their tolerance and resilience in the face of decades-long challenges in the power sector. “You have lived with the pain and misery of inefficiencies in our power sector for too long. Thank you for your great tolerance. We have inherited a broken system, but we are taking decisive action to rebuild and reform,” the Prime Minister said. Since assuming office in 2019, the Marape Government has made significant progress in stabilising PNG Power Ltd, investing over K400 million and implementing major structural reforms at both board and executive levels. A key milestone has been the establishment of the National Energy Authority (NEA), now tasked with regulatory oversight and energy policy development—freeing PNG Power to focus solely on electricity generation and distribution. “Energy drives the world. From electricity to water and transport, energy is central to human advancement. We want to ensure 100% reliable, clean energy access to our people—well before our 70th anniversary in 2045,” Prime Minister Marape declared. The Prime Minister committed to going beyond the current 70% national electrification target, pushing for universal access through decentralised power solutions, private sector partnerships, and provincial leadership. He also delivered a firm message to the public service and SOEs: “If you cannot do the job, leave the job. I have no time to waste. Our people deserve better, and the time for excuses is over.” Energy reform, he emphasised, is central to his government’s broader vision of building a K200 billion economy, capable of supporting a growing population of more than 10 million. When he took office, the economy stood at K79 billion. Today, it has reached K120 billion, with projections to exceed K130 billion by year-end. Reinforcing PNG’s reputation for fiscal responsibility, Prime Minister Marape noted that the country has never defaulted on its international debt obligations, including during the global COVID-19 crisis. “We peaked at 52% debt-to-GDP during COVID, but today we are back to 47%. We continue to honour our debts, our covenants, and our credibility as a borrower,” he said. With a landmass larger than Japan, the UK, and New Zealand—and one of the most culturally and linguistically diverse populations in the world—Prime Minister Marape said that energy solutions must be tailored to the country’s geography and decentralised realities. He reaffirmed the Government’s focus on provincial-level energy initiatives, empowering provinces like Morobe, East New Britain, and the Highlands to pursue investor-friendly, locally driven solutions. “We must stop managing PNG Power like it’s 1975. This is 2025. Let private capital in. Let innovation lead. Let’s not waste another 20 years.” As PNG looks toward 2045, the Prime Minister invited development partners and investors to join the country’s transition to clean, renewable energy, including opportunities in hydrogen, thermal, solar, and hydroelectric power. “This is a country with global potential in clean energy. Let’s build a mature, energy-secure, climate-resilient economy together,” he concluded.

In a decisive address at the National Agricultural Industry Public-Private Sector Partnership Conference recently, Prime Minister Hon. James Marape, MP, reaffirmed  the Government’s commitment to prioritizing agriculture as a cornerstone of national development. This pivotal gathering underscored the Government’s ongoing efforts to enhance agricultural productivity as a means of sustaining economic growth and improving the livelihoods of Papua New Guineans. Prime Minister Marape highlighted the significance of the agriculture sector, which has been strategically divided into four vital components: the main Agriculture Department, Coffee, Cocoa, and Oil Palm. This restructuring aims to refine focus and boost the productivity of these subsets, integral to the nation’s economic framework. “For four consecutive years, we have witnessed a growth of four percent in the non-resource sector,” PM Marape stated. “This growth is a testament to the effective harnessing of economic activity and productivity that sustains our people.” The Prime Minister also addressed graduates in attendance, urging them to leverage their education and communal resources to foster agribusiness initiatives. “With your wealth of knowledge gained from learning institutions, you can utilize your lands and collaborate with your tribal clansmen to drive business success. This is your opportunity to make a profound impact,” he said. PM Marape committed to taking the insights and outputs from the conference back to his office to form actionable strategies to further advance the agricultural sector. He referred to the Government’s price support program launched in 2020, and emphasized the critical need for an established policy mechanism, particularly in light of six years without a robust agricultural structure from the Agriculture Department. “How can we progress without an established policy mechanism?” he challenged. Despite the visible improvements in infrastructure, PM Marape expressed concern over lagging productivity levels. Encouraging the agricultural community, he implored stakeholders to take full advantage of recent legislative changes, including the new income tax act, which offers reductions in taxes and enhanced incentives and tariff measures. “The government is also establishing access to Asian markets, particularly China, and we are actively working with bilateral partners to enhance food security,” Marape added, highlighting the Administration’s efforts to integrate Papua New Guinea’s agricultural sector into the global market. In conclusion, the Prime Minister reiterated his belief in agriculture as a vital driver for the nation’s economic future and a key element in enhancing food security and community well-being. The government remains committed to supporting the agriculture sector and its stakeholders, with a focus on ensuring sustainable growth for generations to come.

In a region where digital transformation is both a challenge and an opportunity, global payments leader Visa is actively working to bridge the financial gap through inclusive innovation. In the recent Innovation PNG Conference 2025 in Port Moresby, Visa Country Manager for New Zealand and the Pacific Islands Anthony Watson revealed an ambitious 2030 vision to drive further economic growth in Papua New Guinea. The vision, Watson said, complements the PNG Government’s goal to connect 70 percent of the population to the internet by 2030. Visa “supports economic growth in mining, agricultural, forestry and fishing sectors which rely on foreign trade,” he said. “These are the sectors PNG has a strong reliance on in foreign trade. Therefore, by offering a secure digital payment solution that is reliable and fast to move funds between consumers, businesses and government agencies, Visa supports PNG in foreign trade,” he added. Visa plans to introduce new, low-cost, mobile-based services that help sellers get paid quickly and safely, secure eCommerce services, and enable international money movement for foreign trade services. To support this vision, strong fraud protection will be critical. In a media release, Visa revealed global investments of over $10 billion over the last five years into technology and innovation to reduce fraud and increase network security. “This advanced technology, including AI-driven fraud prevention tools, will be critical in protecting PNG consumers against sophisticated threats,” it said. In an exclusive interview with PNG Business News, Watson shared his strategic vision for Papua New Guinea and the broader Pacific market, painting a compelling picture of a region on the cusp of rapid financial evolution. Anthony has been with Visa for 15 years, starting in Melbourne, Australia back in 2009. He has held senior roles across Client Services, Product, Sales and Strategy working in several countries in Asia Pacific. With a background in product development, risk, and digital business operations, Watson has a passion for supporting tech entrepreneurs in developing new businesses models that help support growth in digital commerce and access to financial services. Visa continues to explore opportunities and partnerships in PNG and the wider Pacific region, the Country Manager said. “The message is clear: a collaborative, forward-thinking, and inclusive digital payments ecosystem is not just a vision, it’s a mission in motion,” he added. “My role as Country Manager is to develop and execute the market strategies we have. I’m also in charge of our business operations and provide leadership to our team across the markets in which we operate.” Watson acknowledged the complexity and opportunity in the local market. “Visa operates in over 200 countries globally. So, we are a very inclusive organisation, taking the needs and considerations of local markets into the types of products and solutions that we've developed,” he said, while highlighting PNG’s unique geographic diversity and the variety of communities that necessitates tailored approaches. “Our observations have been, there has been a growing population adopting more of mobile technologies, meaning e-wallets become quite interesting. The adoption of internet banking has been strong,” he said, emphasizing the need for small businesses to move away from cash handling. “Businesses really need to look and see the trends that are occurring globally are moving much more to digital capabilities, including online. Even just the fundamental face-to-face transaction... being able to transact digitally is going to be really important, as we think about the behaviours that are shifting as the younger generation starts to come through.” Innovation, FinTech, and the PNG Payments Ecosystem On the role of innovation and financial technology (FinTech) start-ups in PNG’s evolving payments landscape, “there is so much opportunity,” Watson said. “Particularly as we start to see more of the new technology that's out there converging with payments. That creates an interesting dynamic for start-ups, FinTechs, or young entrepreneurs who are looking at opportunities across the country to solve some fundamental challenges,” he said. These opportunities extend beyond just small business support, Watson pointed out. He expressed optimism for the FinTech landscape in PNG, but acknowledged that challenges remain. “It cuts across new consumer experiences, local governments; what they’re doing in terms of disbursements and collections, and even large opportunities like cross-border payments. “There’s still a lot of work to be done. But being able to pick up those global trends and apply them in a relevant local context is going to be important,” he added. Mobile and Digital Identity: The Future of Payments Asked what innovations in the digital payment space excite him the most, Watson didn’t hesitate to answer: “First would be mobile.” “I’m very excited when we think about PNG’s growth and adoption that’s occurring across mobile infrastructure. I can see an enormous adoption starting to occur over the next decade, particularly on smartphone infrastructure.” He also highlighted the potential of a digital identity as a “transformative element” and emphasized the need to support small and micro-businesses. “Where we start to look at digital identity becoming an underlying credential that payments link to for authentication, online shopping, and a bunch of different use cases, that certainly excites me,” he said. “Solving for the small merchant challenge, how they can collect funds efficiently using low-cost technology, particularly mobile-oriented, is critically important. We have several solutions already deployed globally that we believe are very relevant to the local market context.” PNG’s Place in the Global Digital Payments Landscape With experience leading Visa operations in multiple countries, Watson was asked how PNG compares in terms of digital payment evolution. “Firstly, it’s really difficult to always compare one country specifically to others... They’re all vastly different,” he explained. “But I also see a lot of similarities.” “Sometimes we overestimate what we can achieve in 12 months, yet we underestimate what we can achieve in 5 to 10. That is an important context when we think about PNG. “It’s not just about looking at the near-term opportunities; it’s a bit of a marathon. The type of solutions we bring into the market must reflect that.” Cybersecurity was another major focus “Fraud, scams, and cyber security are really top of mind. That’s globally, of course, but certainly applies across the Pacific Islands as well. We're using available technology, particularly AI, to help protect consumers, businesses, and governments,” he said. Finally, he spoke about reinventing the consumer experience. “There’s such a great opportunity for us to redevelop and rethink the consumer experience across PNG. I think there’s going to be a lot we can do in terms of new experiences and value propositions.” Watson stressed the importance of constructive regulation in collaboration with regulators and financial institutions in Visa’s engagement to support an inclusive ecosystem. “Visa as an organisation is in favor of regulation. When it is done correctly and applied in the local market, it creates a nice set of guardrails that allows the industry to move fast,” he said. “Foreign investors, tech companies, and FinTechs welcome regulation because it provides certainty on what they can expect.” He added that good regulation leads to positive outcomes. “We want principle-based outcomes. We need to ensure that it’s not bad regulation that creates a productivity drag on the economy.” “The role that Visa plays across the country in terms of economic growth is vital, and infrastructure is key to achieving those outcomes. We welcome further engagement with government in support of what they are trying to achieve.”

Three legends in Papua New Guinea’s tourism industry were honoured with Lifetime Achievement Awards during the 2025 National Tourism Conference & Expo (NTC) Gala Dinner on April 10 at the Hilton Hotel in Port Moresby. The recipients included Bob Bates, Proprietor of Trans Niugini Tours; the late Sir Peter Barter, represented by his son Andrew Barter and daughter-in-law Juanita Barter; and the late Max Benjamin, represented by his wife Cecilie Benjamin and son Cheyne Benjamin. The awards ceremony, which closed the two-day event, celebrated their extraordinary contributions to the development and promotion of tourism in PNG, organizers said. The Lifetime Achievement Awards were proudly sponsored by the Platinum Sponsor of the National Tourism Conference & Expo, the Mineral Resources Development Company (MRDC) and its subsidiaries. The awards were jointly presented by the Prime Minister, Hon. James Marape, and the Minister for Tourism, Arts & Culture, Hon. Belden Namah. An audience of tourism operators, government officials, development partners, and community leaders gathered under the conference theme “Honouring Our Past, Transforming Our Future.” Bob Bates’ Adventure and Eco-Tourism Bates was honoured for his more than four decades of dedicated service, becoming a cornerstone of adventure and eco-tourism since his arrival in PNG in the early 1970s. Through Trans Niugini Tours, he has been promoting cultural authenticity, environmental conservation, and community-based tourism. Bates established eco-lodges in some of PNG’s most remote and spectacular regions, including Rondon Ridge, Karawari Lodge, and Ambua Lodge, and organized cultural tours and expeditions that have brought PNG’s rich diversity to the global stage. Bates, upon accepting the award, said: “I thank you all for this honour, although I must say, I’ve still got another 40 years in me, so it’s not quite a ‘lifetime’ yet!” Chief Executive Officer of the PNG Tourism Promotion Authority (TPA), Eric Mossman Uvovo, commended Mr. Bates for his remarkable contributions. “Mr Bates is a name that resonates across the tourism industry not just in PNG but internationally. His deep respect for local culture, his investment in sustainable tourism, and his pioneering spirit have inspired generations.” “On behalf of TPA and the entire tourism family, we extend our heartfelt congratulations and thanks for his dedication to Papua New Guinea,” Mr. Uvovo said. Barter’s legacy honored The late Sir Peter Barter’s outstanding legacy was also celebrated during the Gala Dinner with the Lifetime Achievement Award presented to his son Andrew and daughter-in-law Juanita, who accepted the honour on his behalf. After arriving in PNG in the 1970s, Sir Peter Barter went on to establish Melanesian Tourist Services Ltd, which operated the Melanesian Discoverer expeditionary cruise and the iconic Madang Resort Hotel. His efforts helped position Madang as one of the country's premier tourism destinations. Beyond his achievements, Sir Peter made profound contributions to national development. He founded the Melanesian Foundation to support community development and was deeply committed to promoting the countries cultural diversity. As a former Minister for Health and Bougainville Affairs under the Somare Government in the early 2000s, he played a pivotal role in the peace and reconciliation process after the Bougainville Civil War, later serving as Governor of Madang Province. TPA CEO Uvovo, praised Sir Peter’s enduring influence. “Sir Peter Barter was not only a pioneer in the tourism industry but a statesman, philanthropist, and a prouder Papua New Guinean than most Papua New Guineans. His efforts extended far beyond economic gain, he championed peace, culture, and inclusive development through tourism,” he said. “On behalf of TPA, I thank Andrew and Juanita for travelling to Port Moresby to receive this honour. It was a truly special moment,” said Uvovo. Benjamin deeply rooted in Marine Conservation, Eco-Tourism The late Max Benjamin was the third recipient of the Lifetime Achievement Award accepted by his wife Cecilie and son Cheyne. Max Benjamin’s legacy is deeply rooted in PNG’s marine tourism.  Arriving in the 1960s, he and Cecilie established the world-renowned Walindi Plantation Resort in Kimbe Bay, West New Britain Province. Walindi gained international acclaim for its world-class diving, marine conservation efforts, and commitment to sustainable tourism. Max Benjamin’s vision helped put PNG on the world map for diving and marine eco-tourism. Scientists, divers, and eco-travellers from around the globe were drawn to Kimbe Bay, attracted by its biodiversity and the Benjamins’ tireless work to protect it. In her acceptance remarks, Cecilie Benjamin also shared a powerful reminder of PNG’s uniqueness. “A wonderful conference and an award that is a proud achievement for my husband,” said Mrs Benjamin. “Please, never compare Papua New Guinea to anywhere else on earth. This country is unlike any other with its cultures, its biodiversity, and its pristine beauty. There is no place like PNG.” TPA CEO Uvovo said: “Max Benjamin was more than a resort owner, he was a true champion of eco-tourism, a protector of marine biodiversity, and a mentor to many in our industry. His passion and commitment to Papua New Guinea’s natural beauty and people have left a lasting legacy. “On behalf of TPA and the tourism sector, we are grateful to Cecilie and Cheyne for travelling to Port Moresby to accept this award in his honour,” he said.

 Michael McWalter picks up his prior discussions of petroleum sector reform (Issue No. 3 2024) and describes in more detail exactly what a Production Sharing Contract, or what a PSC, is all about. In my commentary of PNG Business News, Issue 2, 2023 entitled: Petroleum Sector Reform for Papua New Guinea, I wrote about the need to apply better governance to the sector to achieve optimal outcomes for the State. In particular, I spoke of the need for the petroleum revenues arising from petroleum resource development to be deployed wisely for the benefit of the people of PNG on capital formation activities like: education, health, social welfare, infrastructure, etc. – all of which should promote the National economy to grow, and thus improve livelihoods.  This translation of the value of resources with appropriate management into sustainable development is often called the value chain, and each aspect of the chain needs most serious and competent management.   There is little point in mobilising one’s natural resources to make an income for the State, if that money is not put to good purpose, but rather wasted one way or another by folly or malady.  Those resources may only be produced once, and not again; they are finite and have value now at such time as that kind of resource is sought after in global markets. We must remember that there may come a day when oil and gas are no longer consumed with such avid demand as today. This might eventuate as more investments are poured into the development of renewables sources of energy and advancements are made with cleaner nuclear fission and sustainable thermonuclear fusion. Oil and gas might become a quixotic, antiquated and outmoded source of energy, and thus attract considerably less value.  So, if a government is going to foster investment in petroleum exploration and development, it needs to embrace such grave and important responsibility to ensure that the Nation’s petroleum business is conducted most professionally and with total accountability. Government must ensure that the resultant revenues from subsequent production are appropriate, reasonable and respected as being derived from the overall patrimony of the people of the Nation.  This requires investment by the State in professional excellence to manage, moderate, administrate and regulate the sector and its operations firmly and fairly.  The oft cited National Petroleum Authority (NPA), which was first defined in the Government’s 1976 White Paper on Petroleum Policy and Legislation by two of our greatest leaders, Sir Michael Somare and Sir Julius Chan, has been repeatedly conceived, only to be still born. Into that vacuum, Kumul Petroleum Holdings Ltd, PNG’s de facto National Oil Company (NOC) has steadily and bravely taken the lead and embraced National development in the oil and gas sector, and all that it entails. Meantime, the Department of Petroleum and Energy has valiantly tried to keep up with ever increasing core and essential petroleum sector functions, like licensing, operational approvals, and data collection, whilst otherwise becoming absorbed, and perhaps overwhelmed, in the peripheral though, absolutely essential tasks of dealing with project area landowners, their benefit claims and their many other concerns and worries. Plans for a NPA have been formulated in great detail several times over in the last few decades, only to be forsaken, lost, sidestepped, and derailed time and time again. The whole notion of the NPA was to bring together a cadre of PNG excellence to lead the petroleum sector as the guardian of PNG’s petroleum resources. The members of that cadre were to have been well-paid for their experience and important responsibility, and as an Authority of the Government, the NPA might have been able to retain and attract some of PNG’s finest graduates in such exciting and challenging work.   I also discussed the vital need for the commerciality of petroleum developments without which investment by the industry in field development would be withheld.  I discussed how the 2020 amendments to the Oil and Gas Act imposed a test on a proposed petroleum development project that the applicant’s proposals should reflect a minimum expected return to the State over the life of any recovery of petroleum. However, that minimum expected return to the State is not specified in law and is only examined and determined by the Petroleum Advisory Board (PAB), and then considered by the Minister at the time of application for a development licence.  This leaves investors with great uncertainty and unnecessary risk throughout the period of exploration, appraisal, development planning and the application phase of petroleum resource development.  There is thus now no absolute certainty of development if a discovery of commercial extent is made. Either the PAB or the Minister may set a threshold minimum expected return to the State during the consideration of an application for development. This is at a very late stage in the cycle of petroleum resource development investment and comes just before the investing companies have to elect to develop their discovered petroleum accumulation, or not. If a field development is marginally economic, the setting of such a minimum expected return to the State might in some circumstances make corporate consideration of development uncommercial, and as a consequence the field might be left undeveloped. In any normal distribution of petroleum accumulations, there are a few large fields, a fair number of medium size fields and many smaller fields. It would not be wise to disadvantage the development of smaller and often smaller marginally economic fields, which tend to be developed after the larger fields have been found and produced, and which can readily sustain a domestic petroleum industry populated by smaller, and likely, local companies with smaller investments.  Oddly, as I said in 2023, the potential introduction of Production Sharing Contracts (PSCs) would obviate such a risky situation because the terms of development are normally locked into a PSC when originally negotiated and agreed between the State and the investing companies as contractors to the State at the outset. Being a contract, any capricious demand by the State for unexpected returns on petroleum development pursuant to a PSC would end up with the contract being the substance of legal proceedings.  I now want to pick up on my themes of a year ago and discuss optimal and necessary arrangements for petroleum development in the light of some creeping petroleum policy change in recent years, and a keen desire by the Government to change the PNG petroleum regime and to adopt the use of PSCs. I particularly wish to demystify PSCs. Figure 2: Much has been written on PSCs. Celebrated analyst, Daniel Johnston, is prominent with his simplified mapping of fiscal and commercial regimes. King & Spalding, an American multinational corporate law firm, has also written a most comprehensive book on the topic, ex libris McWalter.   WHAT ARE PRODUCTION SHARING CONTRACTS?   The notion of a Government sharing the production of oil and gas arising from the development of a successful petroleum exploration campaign by companies as part of a commercial venture was first developed and employed in Bolivia in the 1950s. A Production Sharing Contract (PSC) is an arrangement between a host Government and an international oil and gas company (IOC) for the division and allocation of the oil and gas produced between those two parties under a contract which provides for the exploration for and the development and production of petroleum resources. The allocation of a share of the production to the IOC serves to recompense the IOC for its investment and to provide a reasonable reward for its success. The Government, as owner of the resources, also provides a mechanism called a cost recovery allowance to the contractor for its work, but keeps the rest of the petroleum produced. The PSC was introduced in Indonesia in 1966, and PSCs of this kind or variants of the same are used extensively to agree the arrangements for oil and gas exploration, development, and production with oil and gas companies. PSCs of one kind or another are used in over 40 countries, throughout the world.   The PSC is not the only manner by which a government may grant oil and gas exploration, development and production rights to commercial investors and gain a share in the value of successful petroleum production.  Prior to the development of the PSC, exploration and production of oil and gas was typically governed by way of a licence or a concession agreement, and such regimes still remain in effect in many different places around the world. In many developing nations, the PSC is now the most common means by which a government allows corporate investment in the oil and gas industry. It provides a company or consortium of companies the right to explore and produce oil and gas.  In many jurisdictions, there are political or nationalistic reasons for the adoption of PSCs as they perceptibly provide the Government with greater and more direct control over its resources and the ability to exert National sovereignty over the industry more readily.   After gaining independence in 1945, Indonesian’s concessions regime came under attack by certain nationalist groups leading to the nationalisation of Royal Dutch Shell’s assets. Indonesian Law 44/60 abolished the old concessionary system and specified that: “Oil and gas mining shall only be carried out by the State and implemented by State enterprises,” and further that, “the Minister may appoint other parties as contractors of the State enterprises.” Alas, a decline in foreign investment in Indonesia’s oil and gas sector inevitably ensued. To mitigate this decline, the government eventually negotiated and agreed in 1962 with the Pan American Indonesia Oil Corporation, a subsidiary of Standard Oil of Indiana (later to become Amoco), a new contract based on legislation that was much more favourable to the Government.  The other large foreign petroleum investors, Caltex (a venture of Chevron and Texaco), Shell, and Stanvac (a venture of Socony [Standard Oil of New York] and Vacuum Oil and Standard Oil of New Jersey, later to become Exxon) followed by signing Contracts of Work in September 1963. These early PSCs were widely considered to be less controversial than the previous concessions system, as they enabled the government to maintain formal ownership of the resources until sold, while permitting the IOCs to exploit them for and on behalf of the Government. These contracts provided for the recovery of the costs of the contractor up to an agreed percentage of overall production plus an agreed, but often scaled, share of the produced oil and gas as a reward for its investment. Although often cited as the example of the use of PSCs, in 2017, in a somewhat odd twist, the Indonesian Government established a new form of PSC called the Gross Split PSC. This completely abolished cost recovery systems pioneered in the classic PSCs of the 1960s. Instead, this new arrangement simply relies on an agreed split of the actual production between the Government and the IOCs, typically 43% to the contractor for oil and 48% to the contractor for gas production, with the balance of production going to the Government. Due to a loss of faith in Pertamina (Indonesia’s national oil company) in the late 1990s (an audit had shown that Pertamina had allegedly lost about US$6.1 billion from inefficiency and corruption in 1997 and 1998) the Indonesian Government took steps to rein in control of the industry at the Ministry level, but they had no financial ability to manage the proceeds of the sale of oil and gas which were remitted to the revenue account of the National government.  Without any retained funds, this then entailed the Ministry having to seek parliamentary appropriations to pay the cost recovery allowances to the IOCs, but then the Indonesian Parliament questioned these payments. This brings home the need to think through the implications of changes in regime and the management of any given regime, especially if one is contemplating changing from a licence or concessionary regime to a contractor-based one. What is a PSC? In a PSC, a government makes a contract with an IOC to provide the necessary and requisite financial, technical, management, environmental, social, planning and logistical skills in order to explore for, and hopefully, if successful in finding oil and gas accumulations, to produce the oil and gas. The host State (that throughout most of the world, normally owns the subterranean resources) will usually be represented by the Government or a Government Petroleum Ministry, Department, Authority or quite often some other type of agency of the State, such as its National Oil Company (NOC), which will take delivery of the State’s share of production and generally manage the commercial aspects of the PSC. The IOC is typically granted an exclusive time-limited right to explore for petroleum accumulations, appraise any discovery, plan and execute development and produce oil and gas within a defined area, generally known as the contract area. Under the PSC arrangement, the IOC bears the entire risk of the project, both technical and financial. If a commercial discovery is declared, the IOC becomes entitled to a portion of any subsequent petroleum produced as an effective payment for its efforts, in addition to recouping all its costs from the production. Conversely, if no discoveries are made, the IOC receives nothing. The Government retains ownership of all the oil and gas produced, save for what oil and gas is allocated to the IOC as cost recovery petroleum, or is the subject of sharing between the IOC and the NOC as profit petroleum. This causes the Government to be involved in selling its share of the produced oil and gas.  In some jurisdictions, the IOC is allowed to keep the physical oil for itself, and the IOC makes just cash payments only to the NOC, based on the sale of the NOC’s petroleum entitlements; in others, physical oil and gas allocations are used to reward the IOC. The extent to which the NOC is involved with the exploration, development and production process varies from country to country with some NOCs seeking to take a significant lead in the business other than a just managing the PSC, whilst other NOCs take only a small participating interest in the commercial venture, so as to be within the operating consortium and to learn from it. There are commonly four key financial aspects to a PSC: royalty, cost recovery petroleum, and profit petroleum, though many other relevant matters are agreed in the PSC. Figure 3: Contents of a PSC: A sample from Equatorial Guinea, after the Republic of Equatorial Guinea, 2006    Royalty Most often and foremost, the IOC is typically expected to pay a prescribed or agreed royalty as a percentage of the gross value of oil and gas production to the State as valued at the point of export from the contract area. The royalty is often, at the State’s option, taken as a physical share of production, or alternatively by way of a payment by the IOC equivalent to the sale price of the State’s royalty share of production. Sometimes, the percentage rate of royalty may be the subject of bids for a contract area by competing oil and gas companies when bidding for the same or similar areas.  Royalty is a payment made in kind or related to produced volumes and price without regard to the profitability of the business. Therefore, in times of low petroleum commodity prices it has the effect of digging deep into profitability.  However, for a host Government, royalty is an assured payment regardless of profitability, but proportionate to the value of the produced oil and gas. Cost Recovery Petroleum Following payment of any royalty, the IOC is normally entitled to a pre-determined maximum percentage of gross production from which it may recover all its genuine costs, with any costs not recovered being carried forward to the next accounting year. Such production is known as cost oil and cost gas, and again may be taken in cash or kind. Obviously, the IOC attempts to maximise cost recovery early in the cycle of production up to the agreed maximum percentage limit, so as to recoup its expenses soonest, and likewise the Government will scrutinise the costs submitted to it for recovery as to their genuine eligibility. That scrutiny involves approval of all procurements and sub-contracts of the IOC, and represents an enormous accounting burden for the Government.   Profit Oil The oil and gas remaining after the payment of royalty to the Government and the cost recovery allowance to the IOC by the host Government is known as profit oil and profit gas, and it is generally divided between the IOC and the Government in accordance with the production sharing provisions agreed and defined in the PSC. Quite often the Government’s share of profit oil and profit gas increases as the production rates increase. Income tax Finally, the IOC is quite often required to pay income tax on its share of net benefits which should strictly amount only to profit oil, as cost oil and cost gas represent only a recoupment and recovery of costs. However, the application of income tax varies from jurisdiction to jurisdiction and in some cases the IOC’s notional income tax due is often paid by the NOC, or the State on behalf of the IOC, such that there is no financial impact on the IOC, there being just a journal entry between different parts of the Government. An income tax superposed on the PSC regime without appropriate tax deductions can rapidly make a fair PSC regime become a very hostile one.  In the calculation of the net take to the State under a PSC, one has to include the results of any Corporate Income Tax and all and any other taxes, levies or imposts that affect the outcome of the overall PSC.  In some PSCs, there is simply no tax, and the royalty, cost oil and gas, and production share are deemed to be final fiscal devices. Figure 4: It must be noted that the production or profit oil split is not the same as the overall net take to each party, after Daniel Johnston in International Petroleum Fiscal Regimes and Production Sharing Contracts      Government Involvement The objectives of the parties when negotiating a PSC and its terms will generally be diametrically opposed.  An IOC will strive to negotiate for itself as much independence and control as possible over operations, and it will want any State intervention in the running of the project to be kept to a minimum. Naturally, it will be keen to keep its costs low, by negotiating the highest cost recovery allowance and the largest production share it can, and it will seek the full recovery of all its costs. The Government will wish to have an overall say in the development of its resources in an orderly and systematic manner that creates synergies for future development. The Government will also wish to make as much money as possible, reduce cost recovery allowances, and have access to an IOC’s resources and relevant expertise, without spending much time and money. The Government may also have economic priorities for domestic petroleum supply to its economy to mitigate energy import requirements and obviate foreign exchange requirements. Throughout the contract from exploration to development to production, the Government will want to ensure that the IOC is undertaking a technically appropriate exploration work programme with appropriate levels of investment and that the exclusive right to access land or the offshore area is being used efficiently. In addition, the Government will typically be concerned to secure as many rights and benefits for the people and local businesses, including affected local communities, as possible.  This is generally accomplished by the optimisation of jobs and training for local workers through requirements to use local goods, services and contractor and subcontractor services as far is feasible and practical – this is what is typically called local content. Figure 5: The main elements of a PSC, after Hassan Harraz, Tanta University, Egypt, 20106   Why the PSC Model? The obvious advantage of the PSC model for a government is the minimal risk on its part throughout the value chain of the enterprise. It is thus able to reap the benefits of its natural resources without having to spend its own time and money even for development. This is not to say that the State does not pay. It inevitably pays for its share of all and any costs of exploration, development and production through the cost recovery process payable to the Contractor. In most cases, the Government will not have the technology needed to explore for and produce oil and gas, and so contracting the help of an IOC that has the appropriate skills, capacities and technology is usually necessary in order for the Government to exploit its natural resources optimally, especially in the offshore areas. The same is, however, also true for licence and concessionary arrangements where even if the host Government has an equity option to take up a participating interest in a petroleum development project it will still pay for at least its pro rata percentage share of sunk and past exploration, appraisal and development planning costs up to the point of the establishment of facilities for development and the commencement of the recovery of the petroleum. As and when exploration proves to be successful, the Government can secure long-term supplies and/or exports of oil and gas in a PSC regime, which it can trade as it sees fit. The long-term nature of a PSC enables the Government to predict future levels of oil and gas for domestic use, export and to make provisions in the national budget accordingly. Alternatively, the PSC model can be most lucrative for the State, if it takes the option of taking its share of production as a cash payment, rather than in kind. It is also very common for PSCs to contain provisions that as the production rate increases, the proportion of the production attributable to the Government may also increase, meaning that a significant and increasing proportion of the value of profit oil is paid to the host Government and its representative entity defined in the PSC. In all cases, at the initial stage of petroleum resource development, the IOC bears substantially all the financial risk. If, and only if, exploration proves successful and the discovered oil and/or gas accumulations are developed and produced, the IOC may be able to recover its costs through cost oil and/or cost gas and an agreed share in the profits of the remaining quantity of oil and gas. As to whether the PSC model is more favourable to the State than to IOCs in contrast to the licence or concessionary system, ultimately depends on the rates used for the various fiscal and commercial parameters in each system. In a concessionary regime, costs are only recovered slowly as depreciation allowances against assessable income. The speed of the recovery of costs depends entirely on the terms set by law and those allowed to be negotiated in the framework of a PSC. It may or may not be possible for an IOC to negotiate the terms of a PSC with more, or less financially and commercially attractive terms for petroleum development than a licence or concession arrangement might otherwise have offered under a prior regime. It is all about the terms of the selected regime, whichever is applied. Figure 6: Some terms of the petroleum regime may still be contained in legislation whilst others will be negotiable depending on the particular regime, after Daniel Johnston in International Petroleum Fiscal Regime and Production Sharing Contracts.     One possible negative aspect of the PSC model is that it is an agreed and contractual arrangement, and not the product of binding and enforceable legislation. Thus, any breach of the PSC by either party will constitute a breach of contract for which civil relief may be obtained.  Pursuant to the PSC model, the State always remains the owner of the resources, with the contract establishing the applicable compensation arrangements and level of NOC or Government involvement in the asset. The negotiation of a PSC is up front before any investment is made in exploration by the IOC, so the terms are locked in.  PSCs tend to afford IOCs less freedom to run an asset, with Contractors being subject to restrictions and required approvals in addition to those contained in the applicable legislation and regulation. Commonly Used Alternatives to the PSC There are several substantial alternatives to the PSC model. The differences in these alternatives are mainly in relation to the level of control granted to the IOC, the level of involvement of the NOC, and the compensatory arrangements for the investment made. Licences Generally, under a licence arrangement, there is normally little scope for an IOC to negotiate specific fiscal or commercial terms in relation to its exploration and production rights. Licensing regimes and their terms and conditions are typically standardised and embedded in legislation, such that the terms of each licence are near identical. This regime is most common in developed countries, e.g. UK, Norway, the Netherlands, and Australia. The terms of licences may change from time to time as the Government seeks to restrain or encourage sector investment.  The IOC is typically granted complete control over the contract area and complete ownership over any oil and gas that it successfully produces. Unlike PSCs, where ownership of the resources always remains with the State, in licence regimes ownership generally passes to the IOC at the wellhead, with the IOC’s profits from the sale of the oil and gas produced being the subject to general tax legislation, or specific petroleum taxation legislation. Like in PSCs, if the IOC fails to find commercially producible oil and gas within the limited terms and periods of their licence, they go home empty handed.  In some jurisdictions, the Government has an entitlement to join in at the development stage when the risks of finding oil or gas have been mitigated and it may either chose to pay its proportionate share of costs of exploration and development and participate alongside the IOCs, or be carried in some form or another. This can be a very profitable feature for the Government, but it essentially takes a slice of the venture away from the IOC venture at the proportionate sunk costs only, without any regard or compensation for the commercial value of any oil and gas discovered by the IOC. Concessions A concession arrangement is generally subject to a greater level of negotiation than a licence. The IOC is typically granted proprietary rights over the contract area and complete ownership over any oil and gas that it successfully produces, subject to the payment of a royalty and income tax, each of which may vary in rate depending on the level of production as negotiated and agreed. There may be specific taxes like the Additional Profits Tax (APT) which progressively applies further amounts of tax, the greater the rate of return of the production project. In some jurisdictions, licences have become more concession-like as the terms and conditions of the licences have increasingly become the subject of Agreements with the Government defining those agreed terms which are supplementary to or adjust the current and applicable legislation as sought by and agreed by both the Government and/or the IOCs. Service Contracts Under a service contract, the IOC provides its technical services to the State to explore and develop oil and gas resources, and therefore in so many ways, it is similar to a PSC. However, remuneration to the IOC is usually by way of a service fee or payments based on the value of oil produced in US$ per barrel for oil and other hydrocarbon liquids, or per million British Thermal Units (BTU) of energy for natural gas. The term of a service contract is often very short, leaving an IOC with considerable risk and no guarantee of a long production period Services contracts are common in Iran, Iraq and Kuwait and have also been used from time to time in Indonesia and the Philippines. The Overall Picture By and large, about half the world’s petroleum prospective Nations use licence/concessional systems and about half use PSC arrangements, though many of each of these are strictly hybrids involving features of one regime and the other. No particular petroleum regime is superior to any other and much depends on the degree to which the host Nation wishes to promote or reduce exploration investment according to the terms applied. Sometimes, the IOC will tolerate a slightly tougher regime, if they know that it will be stable and well-implemented in a professional and organised manner. Good subsurface prospectivity and a consequent high chance of finding accumulations of oil and gas can often be spoilt by self-imposed surface risks. Factors that may induce surface risk are Governments that: successively make petroleum regime changes, politically drive or make unqualified determination of fiscal and commercial terms without regard to the ultimate take to each party in the case of success, and the poor governance of the sector in general leading to untimely and late decision making. Indeed, a good regime whether it be a PSC-type or a licence/concessional one, will depend on the enforcement of its terms and conditions and the values agreed for those terms and conditions that determine economic outcomes.  The great difference between PSCs and other arrangements is that PSCs keep control over the produced oil and gas and its sale and disposal with the State, whereas licences and concessions leave such matters and the fate of the industry more to the will and imperatives of the corporates.  The intrinsic control of a contractor by the NOC under a PSC means the Government has to be better equipped, more efficient and more knowledgeable to operate such a regime than under a licence or concessionary regime. The State or its representative (usually its NOC) needs to make the PSC work in its favour as it is the manager of the entire enterprise and needs to lead the way. Any failure to step up to such challenges will result in a poorly planned development of the industry with delays, unrealised synergies leading to lost production, and overall loss of value from the resources. No matter what regime is applied to the development of petroleum resources, there is no doubt that resolute and appropriate petroleum policy formulation and firm and fair administration of the sector will pay dividends for any host Government willing to invest in such. The definition of a petroleum regime is not a new game; it has been done many times across the world by many Governments and there is very sound collective advice on the subject which is relatively inexpensive to access compared to the enormity of the task and the value of managing a Nation’s petroleum resources optimally. Figure 7: The IMF has some excellent specialists in its Fiscal Affairs Department who advise Governments on resource regimes and it has often commissioned books and studies on such matters as in the excellent handbook on Administering Fiscal Regimes for Resource Industries by Jack Calder, formerly of the Oil Taxation Office of the UK, ex libris McWalter.    

Islands Petroleum Charity Colour Run 2025 – We Are One Mark your calendars and join us in spreading colour, unity, and hope across Papua New Guinea! 📅 Event Dates & Locations • 29 June – Takubar Sports Ground, Kokopo @ 7AM • 13 July – Sir Ignatius Kilage Stadium, Lae @ 6AM • 27 July – Sir Hubert Murray Stadium, Port Moresby @ 6AM This nationwide initiative aims to bring communities together in support of vital health and education services. Proceeds and sponsorships—both in cash and in kind—will benefit: ✅ St. Mary's Hospital, Vunapope (ENB) ✅ Nonga General Hospital (ENBP) ✅ Milford Haven Medical Clinic & Primary School ✅ Port Moresby General Hospital (A&E and O&G Departments) Together, We Are One. Be a part of something meaningful.

The Papua New Guinea Chamber of Resources and Energy (PNG CORE) is proud to announce its Highly Commended Recognition in the Best Use of Technology (500+ category) at the 2024 EventsAir Innovation Awards. This year’s awards saw a record number of high-quality submissions, making the judging process highly competitive. Despite the strong field, PNG CORE stood out for its exceptional use of the EventsAir platform, which has greatly enhanced event management and engagement across its operations. “We are grateful to receive this recognition,” said Mrs. Pansy Taueni-Sialis, Chief Operating Officer of PNG CORE. “This award highlights our commitment to leveraging technology to connect stakeholders and in streamlining our operations. The events Air platform has been integral in delivering more efficient, engaging, and impactful events that drive growth and innovation in Papua New Guinea’s mining, oil and gas sectors.” “The platform has played an enabling role in organizing and managing successful conferences, workshops, and seminars, enhancing communication, data management, and real-time engagement for more dynamic events.” “We thank the Innovation Awards organizers, our dedicated team led by Manager Events Sheryl Peter, and partners who continue to drive our digital transformation,” Taueni-Sialis added. “This recognition encourages us to keep adopting new technologies to strengthen the resources and energy sectors and contribute to the sustainable development of Papua New Guinea.” “PNG CORE remains committed to advancing the industry and promoting innovation and collaboration in the nation’s resources and energy sectors.”