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Desmond Tsianai, newly appointed Acting Commissioner for the Bougainville Electoral Commission, was sworn into office today. Mr Tsianai was appointed as the acting Bougainville Electoral Commissioner by the Bougainville Executive Council following the untimely passing of the Late Acting Commissioner Mr. Winterford Toreas.
Speaking during the swearing in ceremony, Mr Tsianai acknowledged the former Bougainville Electoral Commissioner, George Manu, for his leadership and mentoring since the establishment of the Office of the Bougainville Electoral Commissioner. Mr Tsianai also acknowledged late acting Commissioner, Winterford Toreas for his brief leadership to the organisation.
Acting Commissioner, Mr Tsianai vowed to work with the ABG and stakeholders to plan and deliver democratic elections in the Autonomous Region of Bougainville.
He said one of his immediate tasks is to deliver the 2023 South Bougainville Former Combatants By-Election on time and within budget.
"Polling ended on Friday the 17th of November and counting commenced on Monday the 20th and is currently underway in Buin".
"We aim to announce the results by the end of the week and return the writs to the house speaker on the 27th of this month", Mr Tsianai said.
He said after the election, OBEC will focus on its planning and preparations for next Electoral events in the Autonomous Region of Bougainville.
The appointment will lapse after a period of 6 months or earlier should a new substantive holder is confirmed by the Bougainville Senior Appointments Committee to this post.
Mr Tsianai was the Director of Elections Management until his appointment as the Acting Commissioner for the Office of the Bougainville Electoral Commissioner.
New Porgera Limited (NPL) welcomes the passing of the Mining (New Porgera) (Amendment) Act 2023 by the National Parliament on 29 November 2023 which paves the way for the mine to reopen this year.
Since the grant of SML13 on 13 October 2023, representatives of NPL have spent the last six weeks at Porgera and Tari holding face-to-face meetings with over 1,000 landowners and their legally designated agents, explaining the company’s proposal for compensation agreements prior to reopening the mine.
More than 1,200 landowner agents, representing more than 85% of the agents, have signed “Consent Compensation Agreements” with NPL to allow the mine to reopen as soon as possible with the parties agreeing to engage in substantive negotiations on new compensation rates after mining resumes. Importantly, to ensure that landowners are not disadvantaged by the deferral in negotiations, NPL has agreed to make a backdated “true-up” payment to landowners for any increase in compensation rates agreed or determined after the mine reopens.
The amendments to the Mining Act passed by Parliament yesterday do not affect those Consent Compensation Agreements that have already been signed by landowners, which will be fully honoured by NPL. NPL notes that the Amendment Act also preserves and protects the right of landowners to be properly and appropriately compensated.
The Amendment Act and the Consent Compensation Agreements that have been signed ensure that the wishes of the overwhelming majority of landowners to see the mine reopened before year-end and the benefits begin to flow again, will be realised.
Jerilai Pujari Holdings Limited (JPHL) and OM Holdings Limited (trading as Oilmin Field Services- OFS), have jointly announced their partnership, resulting in the establishment of Jerilai Pujari Field Services Limited (JPFSL) with an equal 50% ownership stake with equal representatives from both companies sitting on the JPFSL Board.
In 2014, the 11 clans which own the lands comprising PRL15, the licence area for the Papua LNG Upstream Project, formed Koko Nene Henaru Resources Limited (KNHRL) to represent their commercial interests. As the Papua LNG project has evolved, so too has KNHRL, which recently rebranded as Jerilai Pujari Holding Limited. (JPHL). This new entity continues to represent the commercial interests of the PRL15 clans and has begun seeking out strategic partnerships to deliver meaningful, generational change to the people and communities of PRL15.
Oilmin Field Services originated in the Highlands of Papua New Guinea and has evolved into a prominent leader in the field services sector, Oilmin proudly boasts a track record of over three decades of successfully executing projects for major Oil and Gas clients throughout PNG. A cornerstone in Oilmin's history can be attributed to its extensive 15-year history operating in the Gulf Region and PRL15. Beginning with Chevron during early exploration, Interoil during initial growth and culminating with TotalEnergies as the current Operator, Oilmin has been a constant presence in the region working with local communities and clients alike. The Oilmin Board recognised the opportunity of a Joint Venture, to further cultivate the enduring trust and shared values that have been developed over the years between Oilmin and the PRL15 communities and its people.
Mr. Jomu Peniai, Chairman of the JPHL Board and a Director on the Board of JPFSL, expressed confidence in the partnership with Oilmin “If you look back; when Interoil was active in the PRL15, Oilmin was already there (as a contractor) even though TotalEnergies has taken over and has now established itself in the PRL15 area, Oilmin still remains as a contractor to the major companies, that shows that Oilmin has set a benchmark that is difficult to compete with”
JPFSL has been contracted by TotalEnergies EP PNG Limited (TEPPNG) to provide all Camp Management, Catering, and Maintenance Services for in excess of 400 personnel at its main Logistical Base, Herd Base. This contract also extends to the Supply of Remote Temporary Camps and associated Labour Hire.
Mr. Graham Leo, General Manager of JPFSL, underscored the JPFSL Board's vision to establish itself as the leading Catering and Camp Management Company with an aim to bring about real generational change to the people and communities of PRL15. JPFSL has successfully obtained internationally recognised ISO Certifications for Food Safety and Quality Management Systems, a reflection of our commitment to hold our company to a higher standard.
With a focus on the people of PRL15, JPFSL is committed to offering accredited training and development programs designed to equip our workforce with globally acknowledged qualifications. These qualifications not only enhance career prospects within JPFSL but also provide transferable skills.
For the local communities, the Camp Catering Contract represents a potential avenue for local farmers to supply their produce while also creating opportunities for the expansion and diversification of their business as JPFSL secures additional Catering and Camp Management Contracts.
Mr Leo added “The future of JPFSL is looking promising with the upcoming Papua LNG Construction phase over the next 5 years. The construction phase presents JPFSL with a unique opportunity to continue building capability and lay the foundation for future generational growth for the peoples and communities within PRL15.”
Newcrest Mining Limited and the National Energy Authority (NEA) have formalized their collaboration by signing a Memorandum of Understanding (MOU) aimed at identifying, developing, implementing, and financing potential renewable energy initiatives in selected locations across Papua New Guinea (PNG). The signing ceremony, which marked a significant milestone in the extractive industry, took place on September 13th, 2023, at the Hilton Hotel in Port Moresby during the Petroleum & Energy Conference.
National Energy Authority (NEA) Managing Director, Ronald Meketa, underscored the groundbreaking nature of this MOU, stating, "This MOU is a first for the extractive industry, leading the way for other capital-intensive operators, and/or for net emitters operating in PNG, to align their operations with the government vision to address the country’s lack of electricity coverage by developing renewable energy projects throughout the country at the same time achieving their own target in its transitioning to become a net-zero emitter by 2050."
Meketa further elaborated on the significance of this collaboration, saying, "As the custodian of the National Energy Policy 2017-2027 target to provide electricity to 70 per cent of households in the country by 2030 by harnessing renewable energy sources, the MOU sets out the framework for closer cooperation and partnership with the Newcrest Mining Limited to deliver strategically placed development of renewable energy projects throughout the country."
He praised Newcrest Mining Limited's commitment to the cause and added, "From the MOU, relevant parties will enter into separate implementation Agreements to operationalize the areas of cooperation stated therein."
Newcrest Mining Limited has already begun mobilization of a dedication to develop a technological roadmap towards decarbonization, including their supply chain, as a critical part of building a business for the future.
Newcrest Mining's intervention into the country’s energy space also reflects its appreciation of the National Government’s vision to address the country’s lack of electricity coverage to improve the socio-economic development of PNG.
Both the National Energy Authority and Newcrest Mining Limited have acknowledged there are options for hybrid power systems that will improve current power system and establish new power generation systems for areas where there is lack or unreliable power supply.
Mr. Meketa said the effort by the NEA and Newcrest is also consistent with the global effort in addressing climate change and greenhouse effect by providing greener and friendlier energy for the government, businesses, civic societies, and the people of the country.
Prime Minister Hon. James Marape officially inaugurated the Fisheries Small-Scale Vessel Monitoring Platform, known as the NEMO tracking system, on Tuesday, November 21, 2023, at Parliament’s State Function Room.
Developed by the National Fisheries Authority (NFA), the NEMO tracking system is a groundbreaking initiative designed to strengthen the management and monitoring of small-scale fisheries across Papua New Guinea. Prime Minister Marape, during the launch, underscored the significance of sustainable fisheries for the economic development and well-being of coastal communities.
Prime Minister Marape stated, “Our marine resources are invaluable assets that need to be managed sustainably to ensure their availability for future generations. The NEMO system will play a crucial role in monitoring and regulating small-scale fisheries, promoting responsible fishing practices, and safeguarding the livelihoods of our coastal communities.”
The introduction of the NEMO system represents a substantial leap forward in the management of small-scale sustainable fisheries in Papua New Guinea, reaffirming the government’s commitment to responsible resource management, environmental conservation, and the well-being of coastal communities.
The NFA and the government will collaborate closely to ensure the seamless implementation and continued support of the NEMO system nationwide. This comprehensive system incorporates electronic reporting devices, vessel monitoring systems, and data management tools.
These cutting-edge technologies empower small-scale fishers to accurately report their catch, monitor fishing activities, and adhere to regulations. The data collected through the NEMO system will also support scientific research, fisheries assessments, and the development of evidence-based policies.
Beyond its environmental benefits, the NEMO system is expected to contribute significantly to the socio-economic development of coastal communities. By promoting sustainable fishing practices, the government aims to enhance the long-term viability of small-scale fisheries, improve fishery yields, and create new economic opportunities for local fishers.
The Central Provincial Assembly sat for its third assembly meeting and presented its Ministerial Statements on Friday 16th of November on the floor of the Central Provincial Assembly chambers.
Two most notable statements presented were the Central Provincial Government’s (CPG) Revenue and Expenditure Performance against the 2023 Annual Budget with key initiatives undertaken to support Central Province’s socio-economic growth and progress along with the Works and Transport statement.
In her capacity as chairlady for Finance, the Governor for Central Province Hon. Rufina Peter presented a favourable report amid the backdrop of rising prices of fuel and basic goods and services attributed to both international and domestic factors including the shortage of foreign currency, rising inflation and Russia-Ukraine war.
“Central Province has remained resilient and focused in our efforts to diversify the revenue base and for our local economy. We in the Central Province have some major developments projects in PNG such as the PNG LNG Project and have benefited from the revenue from the PNG LNG,” Governor Peter said.
She also revealed that the CPG is now working on some major economic projects that will change the economic landscape of the province.
These projects include the Papua LNG Project, which is at the preparatory stages. By the first quarter of 2024 an invitation to the Development Forum for the Papua LNG Project is expected, to negotiate with other key stakeholders including Gulf Provincial Government and the National Government.
Central Province will maximise its benefits as host to these two LNG projects along with the Kido Limestone Project, Tolokuma Gold Mine, the Forest operations in the Abau District and the Connect PNG Project.
In her statement, Governor Peter admitted that her government has not fully tapped into the renewable resources of agriculture, tourism and fisheries to commercially develop these industries.
“We are working together with the National Government and its agencies, and other key partners on new initiatives to expand our economic base on agriculture, fisheries and tourism projects such as the expansion of Rigo rice business model, the Goilala Coffee and Cocoa Development Projects in the coastal regions, and the Special Economic Zones (SEZ) for a couple of potential sites in the province.”
While Governor Peter has been hard at work initiating these projects for the effective revenue generation for the province to sustain the provision of public goods and services, consistent maintenance of existing infrastructure and developments of new infrastructure, the Governor revealed that more needs to be done by the CPG.
“I must be honest to highlight that in the last couple of months, I have found out that our service delivery mechanisms, especially the bureaucracy of the Central Provincial Administration (CPA) is very slow in collecting and generating revenue. CPG is and will continue to do its part to improve our governance processes for and the revenue collection and generation.”
Highlighting CPG’s revenue and expenditure, the Central Governor presented the following figures.
“From the total approved budget of K191, 267, 173, and the revised budget of K210, 547, 230 the total actual received to date is K136, 940, 883. This comprises of (i) iInternal rRevenue, (ii) Recurrent (Functional Grant Transfers) and (iii) Development Grants.”
The Governor called on the Assembly to stand united and deal with corruption, incompetencies, inefficiencies, insubordination and lack of professionalism, for fear of failing to perform duties and responsibilities as public servants and political leaders of today.
“When we do fail to perform our duties and responsibilities, we do injustice to the people and businesses of Central Province, not just today but for generations to come,” she said.
Following the Governor’s presentation of the financial report, elder statesman and Abau MP Sir Puka Temu commended Governor Peter.
“In my 20 years here in this Assembly, this is the first time that a sitting Governor has presented a financial report to this Assembly. Governor, it’s comforting to know the status of the budget and I want to commend you on the excellent work you have done.”
Sir Temu called for tougher penalties when he drew reference to Governor’s concluding remarks on corruption and ineffeciencies with the CPA.
“Governor, I want to suggest that stronger penalties are due, I am tired of hearing that the Governor has allocated funds and directives for work to be carried out and nothing is done by the Provincial Administration.”
“This has to stop and we cannot allow this to continue, we need to find out where the problem is and get a surgical knife and cut it out, I suggest a one-to-three people ‘razor team’ to find out why this is happening, because I do not want to come back in 2024 and see that Governor has done her part but nothing has been done by the administration so all you heads of divisions, take note.”
Other statements presented were the Works and Transport Statement, including the Tourism Statement and the Commerce and Extractive Industry Statement.
The Central Provincial Assembly adjourned to the 19th of December for their final sitting for the passing of the 2024 Budget.
Hosting the World Indigenous Business Forum (WIBF) in Port Moresby from October 24-26, 2023, is a wonderful opportunity to promote Papua New Guinea as a tourism destination, says the Minister for International Trade and Investment, Hon. Richard Maru. Minister Maru said this recently during the announcement by the Tourism Promotion Authority (TPA) to support the WIBF with the gold sponsorship of K250, 000.
“It is a clear objective of our Government to not only host the World Indigenous Business Forum but importantly use it as an opportunity to market our country as a tourism destination and as an investment destination, apart from our indigenous businesses mingling with their counterparts from all over the world to build partnerships and learn from the success of many very successful indigenous businesses worldwide,” said Minister Maru.
“There is so much negative news on the media about our country. This is really an opportunity for TPA to step up and market our country as a tourism destination and also as a destination for potential investors in the tourism sector to invest in things like casinos, hotels, and ferries, etc. This is really a wonderful opportunity; this is in fact the biggest opportunity after APEC 2018 to really promote Papua New Guinea and put PNG on the world stage,” said Minister Maru.
Minister Maru said TPA’s support was an investment that would pay dividends for many years to come.
“This is an opportunity to promote tourism in a big way, so we are really excited about your sponsorship. With this sponsorship, TPA will be given the opportunity to be one of the three PNG guest speakers at the World Indigenous Business Forum where TPA can really market PNG’s tourism sector in a big way. It also gives them a chance to have a booth where TPA can use to promote our country,” said Minister Maru.
Minister Maru said over 400 international guests were expected to attend the forum both as delegates and as speakers, and international media were also expected to come.
“We also understand that many of the foreign delegates who will be coming are CEOs of their own companies and one thing we want to do is to attract them to stay for another week or two or go back and bring their families for a holiday in Papua New Guinea,” said Minister Maru.
Minister Maru also announced that there was a grand opening ceremony being planned.
“I am excited to announce that we are planning a grand welcome ceremony with NCDC and the Amazing Port Moresby team where all our own delegates and the foreign delegates and their families will be welcomed at the Sir Hubert Murray Stadium with a big cultural show where the 22 provinces will welcome them. This will be followed by the 2-day event and on the evenings of these two days including the closing ceremony we will still be promoting PNG culture and PNG as a tourism destination,” said Minister Maru.
Minister for Tourism, Arts and Culture, Hon. Isi Henry Leonard thanked Minister Maru and the WIBF Secretariat for the opportunity to participate in the WIBF.
“When we talk about tourism in Papua New Guinea, our product is the country. You are bringing the world to the country, and it is a great honor for TPA to participate in the World Indigenous Business Forum as this is an opportunity that we will showcase the opportunity that we have not only as a destination but also as a place where you can invest in tourism industry; the potential is right here. PNG is one of the last frontiers of the world that needs to be discovered, so we need this platform where we can participate to make that awareness,” said Hon. Leonard.
Michael McWalter, former Director, Petroleum Division and Adviser to the Government of Papua New Guinea and erstwhile petroleum adviser to the Governments of Ghana, Liberia, Cambodia, Sao Tome, and South Sudan comments on the evolution of Papua New Guinea’s oil and gas industry and how Papua New Guinea has fostered the industry into some of its largest investments in LNG production.
(First of two parts)
When we examine the ingredients required for the development of petroleum accumulations, Papua New Guinea has all that is required, though we do not necessarily know the links between all of them. But the evidence of petroleum endowment is manifest, widespread, and substantial.
Oil abounds in Papua New Guinea. We know this from the oil seeps first identified by gold prospectors in 1911 along the Vailala River in the Gulf Province, to the seeps in the Nipa Valley in the Southern Highlands - used traditionally as body paint and as a kerosene substitute, and sold in the local market, and from the Matapau oil seeps in the Wewak Basin of the East Sepik, which hosted Papua New Guinea’s first oil production pre-World War Two, or the greenish-yellow oil that oozes out of the ground at Wonia, south of the Fly River in the vast Western Province. There is nothing quite like the presence of oil to excite oilmen, and that is what Papua New Guinea has done for over a hundred years.
The commercial oil accumulations and seeps found in the Papuan Basin before 1992 have been attributed to Jurassic sources, with peak generation occurring in the Late Cretaceous prior to the formation of the existing structures. However, in 1992, an oil seep was discovered at Lufa in the Eastern Highlands after a series of earthquakes. This oil is geochemically very different to all the other oils found in the Papuan Basin. It was found to the north and east of the present oil discoveries that occur within the western Papuan Basin and it is indicative of an undiscovered Tertiary source rock, which is currently at or near peak generation. However, most of this likely source rock in the north may be covered by overthrusted allochthonous terrain, and this play remains to be properly explored.
There is no doubt that we have plenty of structure as evidenced by the surface topography and terrains, whale-back mountains and the overall formidable geography of the island of New Guinea. The mainland of Papua New Guinea has been formed by interaction between the Australian Plate in the southwest, and the Pacific Plate in the northeast. Between these two major crustal elements: the platform, and the oceanic crust and island arcs, lays a highly-deformed mobile belt. It is arguably one of the most tectonically complex regions of the world and is host to an abundance of the known tectonic processes: including the opening and closing of ocean basins, terrane accretion, ophiolite obduction, subduction reversal, and ultrahigh-pressure rock exhumation.
Figure 2: Tectonic structure of Papua New Guinea
For the oil man, the evidence of extensional systems of late Triassic and Palaeocene age, an extensive Mesozoic passive margin, abundant Palaeogene shelf sedimentation, and Miocene carbonate deposition, all overwritten by late Miocene- Pliocene collision - which produced the present day Papuan Fold and Thrust Belt, and Papuan Foreland provide the essential structural ingredients and key sediments within which oil and gas may accumulate.
The late Jurassic/early Cretaceous sands form excellent reservoirs, such as the Toro Sandstone and Digimu Sandstone, as do the vuggy Miocene carbonate reefs. The Pliocene Orubadi and Upper Cretaceous Ieru Formations provide reasonable seals, though the faulting of these units due to the continued compression and reactivation of deep-seated faults means that their sealing integrity is not always assured.
Having all the ingredients of a petroleum system is a great starting point for our business, but that same geography that arises from the geological history has made onshore Papua New Guinea a formidable place in which to explore for oil and gas.
Papua New Guinea has been likened to the European Alps where the snow has been removed and the land covered with dense rain forest. The mountains of Papua New Guinea rise up to more than 4,500 metres above sea level and they are the subject of continued uplift. So, when continuous heavy rainfall amounting to as much as 10,000 millimetres per year in some places is dropped on the land, it is no small wonder that vast deltas and wetlands border much of the mainland.
Figure 3: The rugged spine of the island of New Guinea and the adjacent swamps and deltas make access for petroleum development most challenging.
Into this mix, were placed a strange and wide variety of amphibians, distinct and beautiful Birds of Paradise, one of the world’s greatest variety of insects and the most exotic Australasian fauna. And in some latter-day development, modern man who produced the first polished-stone axes some 15,000 years ago became frozen in isolated, early Neolithic, rival communities throughout the mainland and it surrounding islands. With land bridges gone after the last glacial period, only limited seagoing migration occurred along the coastal areas and life for most communities remained isolated for millennia.
Papua New Guinea was never conquered, though many navigators came to its shores from both Western and Eastern ports. No settlements were established and many adventurers were repelled by the local people. It was not until 1973, that Captain John Moresby of the Her Majesty’s Ship Basilik, which was conducting hydrographic surveys along the Papuan coast, found a navigable gap in the reef in front of a beautiful nature harbour. He named that harbour after his father, Admiral Sir Fairfax Moresby, calling it Fairfax Harbour - upon the shores of which Port Moresby was established. In 1883, the Government of Queensland annexed the territory for the British Empire. Oddly, the United Kingdom Government refused to ratify the annexation, but in 1884, a Protectorate was proclaimed over the territory, then called British New Guinea and on 18th March 1902, the Territory was placed under the authority of the Commonwealth of Australia. Resolutions of acceptance were passed by the Commonwealth Parliament, who accepted the territory under the name of Papua.
Figure 4: HMS Basilik (on left)
Figure 5: Captain John Moresby
The new territory enticed adventurers and explorers and it was two gold prospectors, McGowan and Swanson, who in 1911 discovered the oil seeps along the lower reaches of the Vailala River. The Australian Government, aware of the success of the Anglo-Persian Oil Company (later called British Petroleum) in what we now call Iran, commissioned a report and engaged them to conduct exclusive oil exploration for the Government until 1929. This proactive approach perhaps endures to this day. Oil Search Ltd of Queensland joined the foray in 1929 becoming incorporated in Papua. Shell started exploring in 1936 and in 1938 Oil Search joined together with Anglo-Persian and Stanvac (Standard Oil of New York and Vacuum Oil which were later to become Mobil) to form the Australasian Petroleum Company which undertook epic and episodic exploration campaigns for decades searching for oil. Indeed, one well was spudded prior to World War Two, suspended for the duration of the War and only plugged and abandoned after the War.
For years, Oil Search raised money from gentlemen who wished to have a wager on finding oil in Papua by the sale of rights issues, but alas the discovery of commercially viable quantities of petroleum would remain elusive for decades more.
There were nevertheless enormous challenges to access those lands that were seen to be prospective for hydrocarbon accumulations, not the least of which was the formidable geography and the associated paucity of transportation infrastructure, but also the fiercely held manner of customary landownership of those lands. Customary or traditional land ownership was not of such concern (indeed, it was neglected) during the pre-Independence years when the territories of Papua and New Guinea were jointly administered by the Australian Government.
Figure 6: Flag of the Territory of New Guinea
Figure 7: Flag of the Territory of Papua
In the pre-Independence days, perhaps subdued by the cadre of Australian sometimes philanthropic patrol officers (or kiaps) who were administrators, police, judges and jury - all in one, the traditional landowners provided little resistance to the oil companies in accessing lands for oil exploration operations. This was to change radically once the value of that access to privately-owned land under customary title was to be realised in the post-Independence years, and especially so, once oil production commenced.
Papua New Guinea had been the subject of enormous exploration investment in many episodes over many decades, but it was only in 1986 some eleven years after Independence that oil was discovered in commercially producible quantities near Lake Kutubu in the Southern Highlands.
Figure 8: Flag of the Independent State of Papua New Guinea
This discovery at the Iagifu 2-X well underpinned the Kutubu Oil Development Project, which started oil production in June 1992. It also
Figure 9: Oil rig workers look on as the Iagifu 2X well drilled by Niugini Gulf Oil is tested in 1986
In the years after the Kutubu discovery, Papua New Guinea became the subject of great investment interest as many major oil and gas companies scrambled to get Petroleum Prospecting Licences and as many as two dozen new field wildcat wells were drilled per year. However, in the subsequent search for more oil fields, mainly gas was found, which would require much more work to develop. Some additional oil discoveries were, however, made at Gobe and Moran, but alas most of the new discovery wells found natural gas, although that gas was for the most part reasonably rich in natural gas liquids. It rapidly became apparent that the gas endowment was about ten times that of the oil, and with that realisation, exploration waned through the 1990s.
The Kutubu project went ahead beginning production of crude oil in June 1992, and it reached a maximum daily production rate of just short of 150,000 barrels per day in 1993. In 1998, the Gobe oil fields and the Moran oil field commenced production. Gobe reached a peak production in 1998 at 34,000 barrels of oil per day, whilst Moran reached 23,000 barrels per day in 2006. These fields helped to keep overall Papua New Guinea production above 55,000 barrels per day up to 2000, but it declined steadily to 40,000 barrels per day by 2010. The peak production at the Kutubu field was achieved when crude oil prices were relative stable at around US$ 20 per barrel, but as the oil fields of Papua New Guinea went into decline during the first decade of the new millennium, the world realised extraordinary crude oil prices. Prices surged over an eight-year period from about US$ 25 per barrel to US$ 145 per barrel on 3rd July 2008, only to fall back to US$ 44 per barrel by 15 Dec 2018, and then surge again back to over US$ 100 per barrel by the end of 2008! For a while, PAPUA NEW GUINEA was making excellent revenues from its crude oil production notwithstanding that the production rate was only slightly more than a quarter of its peak production, because the price was for a while more than four times the price of the early years of oil production. This roller-coaster of crude oil prices has persisted into the 21st century.
Figure 10: The roller coaster of crude oil prices and natural gas prices became more erratic in the last couple of decades (after Ryder Scott)
This price volatility really tested the petroleum regime of the Papua New Guinea Government. Due to its prevalence of petroleum income taxes rather than regressive fiscal devices like royalty, it enabled the Government to capture a fair share of the windfalls of higher profits arising from the elevated crude oil price, and yet enable production to continue with reduced taxation when profits were diminished by low crude prices. Indeed, Papua New Guinea regime has always recognised the significant capital costs of exploration in Papua New Guinea and has shied away from regressive fiscal terms. The original regime was comprised of a petroleum income tax at 50%, with a 2% royalty paid on wellhead value plus a 22.5% State participating interest in any project paid for on the basis of pro rata sunk costs. The regime also had an Additional Profits Tax set to trigger at the rate of 26% - an impossible rate by today’s standards, but a realistic one for the high interest rates that prevailed in the 1980s. Overall, the regime aimed to provide a net 66.6% take to the Government and 33.3% net take to the investors.
The regime was based on extensive consultations between the oil companies and the Government and an underlying White Paper on Petroleum Policy and Legislation formally presented to the Parliament of Papua New Guinea in 1976. It was a fair deal for a frontier area with enormous physical challenges and tantalising signs of oil and gas. Further, the licensing system was a transparent and well-managed system based on a comprehensive law – the Petroleum Act of 1977. Distinct and well-defined processes for applications for licences, grants of licences and the performance of licensees were established. Moreover, to supplement the Act, it was policy that before the drilling of the first well in each and every Petroleum Prospecting Licence, the licensees were required to negotiate and agree a Petroleum Agreement with the State which provided inter alia for the provision of a 22.5% equity interest in each development project ensuing from the licence, and for any other matters which needed to be agreed between the State and the licensee.
When the Kutubu project was launched in 1990 and an application for a Petroleum Development Licence was made, the fiscal terms were well-defined, procedures for development were in place and the petroleum agreement was pre-negotiated. Not only was the regime ready, but the Government had been steadily building up its technical capacity to manage and regulate the petroleum industry. The Petroleum Resources Assessment Group had been established in 1982 with an initial staff of two officers within the Geological Survey, and in 1987 the Petroleum Branch was inaugurated with eleven officers. Then, with Technical Assistance from the World Bank between 1995 and 2000, the integrated Petroleum Division was inaugurated in 1993 with some 29 officers and the Division grew to over 60 by 2004. Papua New Guinea was rising to the challenge of building the capacity of the Government. Far too many Governments neglect to invest in their side of the petroleum business and then through institutional weakness become prey to politically contrived notions, rather than technically and commercially driven sound plans and policies.
(TO BE CONTINUED)
Michael McWalter is a certified petroleum geologist and technical specialist in upstream petroleum industry regulation, administration, and institutional development.
About 30 minutes by boat from Port Moresby City lies Daugo (Fisherman) Island. Here, water has been essential for the community’s survival, with increased climate change weather patterns affecting the community of about 2,000 people.
To that end, SOURCE Global and subcontractor TWL have delivered safe and quality drinking water to Daugo, generated from innovative cutting-edge technology using hydropanels.
The water project was funded and supported by The Lighthouse Group, the US Department of State, and the Nordic Development Fund.
The PNG Department of Education launched its partnership with SOURCE Global, leveraging SOURCE Hydropanel technology to provide clean, reliable drinking water at Daugo Primary School.
PNG-based TWM Group, who has partnered with SOURCE to support the deployment of renewable water technology in Papua New Guinea, led the project delivery and maintenance services.
Daugo Primary School hosted the momentous event on Wednesday 23rd of November with invited stakeholders and government dignitaries to officially open the water supply project, as school children appreciated the vital service by saying “thank you” to SOURCE Global.
Speaking on behalf of Daugo Primary School, Head Teacher Mr. Cyie Home thanked SOURCE Global and TWL for the water supply project.
"As we all know, water has been a big problem as most of our water tanks have been worn out and water has been unsafe to drink, resulting in the closure of the school, and we are grateful to SOURCE Global for this,” Mr. Home said.
"Other problems still affecting the school, in which our invited guests need to be aware of, are the run-down classrooms and the school uniforms that (students) are in need of assistance,” he said.
“Daugo Primary School and the broader Fisherman’s Island community has faced long-standing challenges with drinking water supply that were largely due to traditional urban water supply methods not being a feasible option to serve remote communities or small islands like ours,” said Sam Lora, First Assistant Secretary Innovation Division, PNG Department of Education.
“The Hydropanel solution was installed and commissioned in a number of weeks and has given our school and community a lasting supply of water that is hugely impactful,” he added.
SOURCE Global Chief Revenue Officer, Robert Bartrop, sees the Daugo Primary School installation as an example of what happens when public and private sector officials work towards a common vision.
"The Pacific Islands have the greatest drinking water challenges of any region in the world. It’s a problem that is especially apparent in villages and small islands like Fisherman’s Island. We are thrilled to be partnering with the PNG Department of Education to invest in vulnerable communities with technology designed to combat water scarcity and climate risks,” said Bartrop.
Operating completely off-grid, SOURCE’s Hydropanels use solar energy to draw moisture out of the air and push it through water-absorbing material. This process passively turns water vapour into drinking water that’s mineralised for health and taste, and kept clean in a storage tank until it’s needed.
Prime Minister Hon. James Marape officially confirmed that Papua New Guinea will take part in the 2025 Osaka World Exposition in Japan, an event set to host 150 countries and 25 international organisations.
Prime Minister Marape emphasised that PNG's participation in this global event will have a significant impact, leading to diversification in the export market and an inflow of capital.
He stated, "This presents a remarkable opportunity for us to promote our nation as a prime tourism and investment destination. It will also enable us to showcase the high-quality products that we are ready to export to the world, including our renowned coffee, cocoa, vanilla, kava, taro, marine products, unique items from our fashion industry, and many more."
The Prime Minister further disclosed that the government has allocated funding in the 2024 National Budget to facilitate Papua New Guinea's participation, including the establishment of the PNG Pavilion.
Additionally, Prime Minister Marape announced the appointment of His Excellency Peter Vincent, PNG's outgoing Ambassador to Malaysia, as the Commissioner-General of the PNG Pavilion. He expressed confidence in Mr. Vincent's ability, citing his extensive experience with Air Niugini, as CEO of the Tourism Promotion Authority, and his role as Ambassador to Malaysia, to lead the efforts in setting up the pavilion and effectively promoting the country and its products at the expo.
The National Expo 2025 Coordination Team or Secretariat will be chaired by the National Trade Office. The coordination team will consist of representatives from the departments of Prime Minister and NEC, Commerce and Industry, Treasury, Finance, National Planning and Monitoring, Justice and Attorney-General, Foreign Affairs, and International Trade and Investment.
Prime Minister Marape concluded by stating, "The political oversight committee will be headed by Minister for International Trade and Investment, Hon. Richard Maru, and will include ministers for Treasury, Commerce and Industry, and Foreign Affairs."