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Prime Minister Hon. James Marape says the World Indigenous Business Forum (WIBF) which will be hosted in October is a cost-effective way to promote Papua New Guinea (PNG) as a production country. “APEC 2018 brought leaders; WIBF will bring actual practitioners of business. Don’t downplay the significance of this event. In fact, this is much bigger and better, and a most cost-effective way to promote our country as a production country and to promote network of buyers from other countries,” said Prime Minister Marape. Prime Minister Marape said this in his keynote address at the Sponsors Night that was hosted by the Ministry of International Trade and Investment last night. Prime Minister Marape thanked Hon. Kessy Sawang, then Vice Minister for International Trade and Investment and now Minister for Labour and Employment who was instrumental in securing Government support as the major sponsor of the WIBF 2023 to be hosted in PNG for the first time. Prime Minister Marape said WIBF will teach Papua New Guineans to be productive and innovative. “Papua New Guineans have one of the best assets that any citizen on planet earth can have and that is land. 97 per cent of the land in PNG is owned by indigenous Papua New Guineans but we do not work that land to produce and export to the markets that we have. WIBF will be that moment where large indigenous businesses from around the world will come to the shores of Papua New Guinea and tell us that they are producing in their own places- not putting men to the moon but basic production business from resources available within reach. They will teach us not to wait for Government handouts but to be productive and innovative,” said Prime Minister Marape. Prime Minister Marape after his keynote address launched a promotion video for the WIBF PNG 2023 which will be aired on EMTV and NBC TV stations starting today and leading up to the hosting of the event in October 24-26, 2023. The Government of Papua New Guinea allocated K2 million as its contribution towards the event and NCD Governor, Hon. Powes Parkop announced last night that NCDC being the host city and the co-host of WIBF 2023 will support with K1 million. Sponsors who have come on board to support the event are Department of International Trade and Investment (K300, 000- Platinum Sponsorship), Special Economic Zone Authority (K300, 000- Platinum Sponsorship), TISA (K300, 000- Platinum), Santos (K300, 000- Platinum Sponsorship), Kumul Petroleum Holdings Limited (K300, 000), Trans Wonderland Limited (K250, 000- Gold Sponsorship), MRDC (K100, 000- Bronze Sponsorship), and Telikom (K100, 000- Bronze Sponsorship). More sponsors also pledged their support last night and these included Kumul Minerals Holdings Limited (K250, 000- Gold Sponsorship), OK Tedi Mine (K100, 000- Bronze Sponsorship), PNG National Gaming Control Board (K100, 000- Bronze Sponsorship), and the Australian High Commission to PNG pledged to sponsor a corporate box at the Sir Hubert Murray Stadium during the Opening Ceremony at the cost of K50, 000. “PNG wants to host the best WIBF ever hosted before. No other country in this journey that started 13 years ago have had their National Government to be host of the event. The Cabinet through Prime Minister, Hon. James Marape decided that our Government will be the host and I thank NCDC for being the co-host. This is an experience that no other countries in the world had seen. The State itself is the host which means we must lift the level of hosting to a world-class event. Without Governor Parkop and his Amazing Port Moresby Team coming on board this will not be possible,” said Minister for International Trade and Investment, Hon. Richard Maru. “We have asked the organizers and the Chairlady of WIBF in Canada to invite the world media to come and we are even talking about jointly paying for them to come. That’s how far our planning for this event has gone. We want to use this event to not only promote business and connectivity, but we want to help reposition the image of PNG to the world. Through hosting this event we want to promote PNG as a country of many cultures, friendly people, full of investment opportunities, and a country that can also be responsible in providing food and energy to the world in the future,” said Minister Maru. “It is also an important opportunity for our SMEs and even our landowner companies. We have so many success stories and we are hoping to share a couple of them to the world; we want to tell the world that we have indigenous companies and institutions that we have built on the strength of the generations before us and the generation today,” said Minister Maru.

The Board of Ok Tedi Mining Limited (OTML) has approved in principle a further mine life extension from 2033 to 2050. This marks a significant milestone for OTML, its shareholders and for Papua New Guinea in general and is a sign of the confidence the Board has in the company's ability to deliver over the next two decades. The approval is based on the latest Strategic Business Plan submitted by the Executive Leadership Team and discussed during the OTML Board meeting held in Tabubil on 13th September 2023. This extension brings to life OTML’s Vision to operate with excellence, maximising the value of the mineral resource in an environmentally friendly way, to deliver sustainable economic and social benefits to the mine communities and the people of PNG. Several factors have enabled the extension including a strengthened long-term copper price outlook, additional mine waste management solutions such as Engineered Waste Rock Dumps and a Tailings Storage Facility to minimize impact on the environment, renewal of aged processing plant assets and implementation of other strategic projects that are currently in various stages of completion. Managing Director & Chief Executive Officer, Kedi Ilimbit, said "The approval by the Board on the eve of PNG’s 48th Independence anniversary is a welcomed gift to the communities in which we operate and who provide us the social license to continue, as well as to the people of PNG." Mr Ilimbit further stated, "The revised mine life will see the Company generate in excess of PGK30 Billion in dividends, royalties, compensation payments, and taxes for the benefit of OTML’s shareholders, communities and Papua New Guinea as a whole over the next 27 years." Jeffrey Innes, Chairman of the OTML Board, shared his optimism about the company's future, stating "The latest Strategic Business Plan gives the Board confidence in OTML's continued operational success. Mr Innes added, “OTML has tripled its value in the last six years and the outlook is a positive one." The mine life extension reaffirms OTML's commitment to sustainable growth, economic prosperity, and community well-being supported by environmental sustainability, community development and operational excellence.

The Government of Papua New Guinea is set on establishing carbon-negative clean energy as its priority over crude oil and coal even as it takes its place among carbon-trading countries. Prime Minister James Marape revealed this recently at the Petroleum and Energy Conference at Hilton Hotel along with planned major legislative measures as PNG is set to embark on the new trend of developments in the oil and gas sector. “The world needs energy, it's just necessary as it needs food supply, which Papua New Guinea have in abundance including its natural forests,” Marape said. “Papua New Guinea is positioning itself toward the global agenda of zero carbon emission and becoming a major energy competitor, that is why the National Energy Authority was created to develop policies to regulate meaningful energy development that will enhance the nation forward,” he said. "Investors, be assured that Papua New Guinea have never missed a cargo of LNG (liquefied natural gas) shipment in the country, and it is committed to working with development partners in the petroleum and energy sector,” said the Prime Minister. Marape also underscored the shift to a production sharing arrangement regime from the current concession base licensing system, which was introduced by the Minister of Petroleum and Energy Kerenga Kua in the forum. Kua said the reform will not affect current projects including the PNG LNG Project, Papua LNG Project, and P’nyang Project with its developers Exxon Mobil, Santos, and Total Energy respectively. “Most of the countries around the world are using production sharing arrangements for its oil and gas sector and therefore it is fitting for the government to do away with concession-based licensing system as it will avoid the crippling loan burden faced in the country,” Kua said. "We want to achieve maximum benefits for our resources. Instead of being spectators, we want to negotiate and achieve maximum benefit for the nation. Therefore, before the end of the year, the government will be introducing a bill in parliament to establish the National Petroleum Authority that will manage the oil and gas act and administer the Production Sharing Regime,” the minister added. “There will also be an organic law set in place before parliament for the Production Sharing Act and Domestic Market Obligation Act, alongside with the Government’s National Content Act for Papua New Guineans to be involved meaningfully in the oil and gas sector,” said Kua. Minister for Trade and International Investment Richard Maru, who also attended the conference, acknowledged the shortfalls faced by the nation, including the inefficient supply of electricity services in the country. He challenged the National Energy Authority to bring in strategies that will help relegate timely and low-cost power services in the country. “Drastic measures should be taken with the appalling state of electricity problems in the country, especially in my province East Sepik, as we go out without power for weeks. If radical measures need to be taken, then so be it,” he said. “I am challenging the National Energy Authority to look into low-cost electricity generation that will benefit the country, and my ministry is happy to work along with investors who would want to venture into this space,” said Maru. The three big global players at the PNG Petroleum and Energy conference -- Exxon Mobil, Total Energy, and Santos -- were encouraged to invest in nature-based solutions to mitigate their global emission footprint, which they said are currently on track.

A visionary collaboration unfolds at the heart of Buang LLG, Bulolo District, Morobe Province – the 9MW Bapa Hydropower Project, a partnership between contractors AG Energy Ltd, local landowners, and the district. The impact of this venture reached a crescendo on August 18th, as we celebrated the monumental breakthrough of our Phase One achievement: a striking 1200-meter tunnel with a width and height of 3.8meters. Apart from AG Energy’s Managing Director Allan Guo and staff, the event was attended by esteemed guests, with the District Member, Honorable. Sam Basil (Jnr), PPL Chairman Mr. McRonald Nale, Mr. David Wissink, General Manager of Environment and Community Affairs at Wafi Golpu, Mr.Sujan Ghimire, Senior Hydropower and Dam Engineer from SMEC and the notable inclusion of Mr. Justin Parker, a local entrepreneur, gracing the occasion. Over the past two years, the project team, with a majority of local workers, has been diligently working on the tunnel. Local labor was trained by an international team to handle explosives, lay foundations, and move rock debris. The 1200-meter tunnel is a crucial element for the Dam penstock, The 1200-meter tunnel stands as a beacon of progress, poised to become the conduit for the Dam’s penstock pipes, and the project now looks to move ahead to its next stages. Spanning across the ancestral lands of the Dando, Baiyun, and Kwasang clans, the project's significance is underscored by Mr. Nalai Iru, the clans' representative, he highlighted the increasing number of projects in Morobe Province and the need for enhanced energy sources. This sentiment resonated with Mr. David Wissink from Wafi Golpu, who spotlighted the imminent demand for 100MW during the mine's construction phase. It is with this backdrop that initiatives like the Bapa Hydropower Project shine as pivotal answers to Morobe's energy needs. The resounding endorsement from Mr. McRonald Nale, Chairman of PNG Power Limited, underscores the project's worthiness. AG Energy garners praise as an unwavering partner to PNG Power Limited, and is looking forward to continued collaboration in the future. Bulolo District Member, Hon. Sam Basil (Junior), accentuates the essence of renewable energy, noting the district's contribution of nearly 26MW to bolster the PPL grid. In this light, the Bapa Hydropower Project stands as a testament to progress, enriching the lives of Buang LLG's residents. The district's support becomes a cornerstone for a brighter future. As the celebration reached its zenith, a mesmerizing demonstration by the drilling and blasting team was staged, a reflection of remarkable expertise. AGE's Managing Director, Mr. Allan Guo, extended gratitude with thoughtful tokens to the three clans and the District. In a heartwarming turn, the District and the clans reciprocated, mirroring the unity that propels this transformative project. The 1200-meter tunnel stood not just as a marvel but as a testament to unity, witnessed by an assembly of over 200 attendees. With each milestone, the Bapa Hydropower Project surges forward, a beacon of promise that charts a course towards a future of sustainable energy abundance.

In driving the importance of agriculture throughout the Central Province, the Southern Regional Department of Agriculture and Livestock hosted a weeklong workshop ending on the 8th of September with the local Avi Avi Cooperative society being the host venue in Aipeana village, Mekeo.  Cocoa and vanilla farmers came from the nearby Inaui village to share their experiences and challenges in a conducive environment. The workshop also looked at issues faced by cocoa and vanilla farmers and what can be done to mitigate these issues. Augustine Maino, a cocoa and vanilla farmer from Inaui, told participants that if agriculture has to work, three other agencies must also play their parts to enable the industry to be successful. These agencies, Maino said, are "the farmer, DAL, and the Government. When these three bodies are aligned and doing their jobs, there is no excuse that agriculture will not move forward, this coupled with good managers who are honest and equipped, will see a smoother transition.” Central Governor Rufina Peter could not attend due to other commitments, but a small delegation led by Michael Atuai, the Governors Agriculture Projects Officer, represented her.  In making his remarks, Atuai apologized on behalf of the Governor for her absence, and noted the concerns shared by the farmers. “One of the things missing in a culture like Mekeo and Kairuku society is our Chiefs are often forgotten. I thank you for this point and Governor will be informed accordingly. I am happy when I see young leaders like Patrick Avi, it's always good to see young people taking the lead in economic aspiration," he said. "A lot of youths don’t always work hard in this, and Patrick is an example. The good Governor will be informed of the things discussed at this workshop and the challenges faced.”  Southern Region Director for DAL Leka Mou thanked Governor Peter for sending a team to see first hand the work being carried out. Mr. Mou also spoke of the importance of having a plan that "combines all commodities into one.” “Last week, Michael Atuai and I were at Kwikila station and we are putting together a final plan. For the past week we have been working very hard to put this plan together which will be completed tomorrow so that in the space of agriculture everyone will be on the same page in the province, which will also align with Governor Peter's five year development plan,” he said. The farmers from the two Mekeo villages of Inaui and Aipeiana completed the workshop invigorated with new skills and assurances that support will be given from DAL and the Central Governor's office.

In a further stride toward enhancing Papua New Guinea's capital market, PNGX Markets, the operator of the nation's stock exchange, has introduced further updated Listing Rules. The move is aimed at propelling the development of a more robust financial ecosystem within the country. With a commitment to establishing a world-class capital market that garners international recognition and respect, PNGX has proactively revised its Listing Rules. The changes are designed to bolster the pathway for overseas companies to list as exempt entities within Papua New Guinea's market framework. The initiative seamlessly aligns with a recent pronouncement by the Minister for International Trade and Investment, the Honorable Richard Maru MP, who unveiled his vision to elevate the scale of the Papua New Guinean capital market in the next four years. The integration with the recently introduced Takeovers and Mergers Code, supports the drive for international recognition and respect, presenting a unified regulatory framework. Beyond these substantive changes, the revised Listing Rules encompass a number of minor amendments, collectively working to refine and reinforce operational structure of the market. Effective as of Monday, September 18, 2023, the amended Listing Rules propel Papua New Guinea into a new chapter in its financial narrative. As the nation positions itself on the cusp of an evolved capital market, the evolution led by PNGX Markets remains pivotal in shaping the growth trajectory of both the resource and non-resource sectors over the next 5 years. The amended Listing Rules, Procedures and Appendices, together with an explanatory document, are available in both markup and clean format at https://www.pngx.com.pg/regulations/. The amendments were approved by the Securities Commission on 30 August 2023. The Takeovers and Mergers Code is available from the Securities Commission of Papua New Guinea.

Photo: Participants of the Domestic Tourism Data Methodologies Workshop in Port Moresby, Thursday 1st June, 2023. A Domestic Tourism Data Methodologies and Stakeholder Consultation workshop was conducted in Port Moresby on the 1st and 2nd of June 2023, by The Pacific Private Sector Development Initiative (PSDI) and the PNG Tourism Promotion Authority (PNGTPA). The workshop and consultations emphasized how domestic tourism can strengthen Papua New Guinea’s overall tourism sector, and how domestic travel data capture is crucial to developing informed tourism policies and measuring sector performance.  Facilitators of the workshop and consultation meeting were representatives of the Pacific PSDI: Professor John Cheer of the Western Sydney University in Australia, and Associate Professor Anne Hardy.  Both have a wealth of experience as research professionals who have worked with tourism agencies across the Asia-Pacific region.       The PNGTPA was the host agency of the meetings facilitated by the Pacific PSDI, particularly officers of the Research and Statistics Unit under the Marketing Division.   “My team and I at the PNGTPA are seeking to develop a suitable and consistent methodology for measuring domestic tourism in PNG. This workshop is an important step for us in fostering insight on how to source, gather and visualize data for developing domestic tourism policies and marketing initiatives.  I wish to thank The Pacific PSDI, as well as Professor John Cheer and Professor Anne Hardy for their time and support,” said Noah Mikmik, Research and Statistics Coordinator of the PNGTPA. There were 30 participants at the workshop and consultations meeting – representing various tourism stakeholders in the country, including the National Statistics Office (NSO), National Research Institute (NRI), PNG Air, NCDC Tourism, the PNG Tourism Industry Association and more.  The PNGTPA’s Visitor Arrivals Report for Papua New Guinea has been a key source of data feeding into regional and international travel data reports for almost two-decades.  The PNGTPA’s collection of Incoming Passenger Arrival Cards from the Citizenship and Immigration Authority office at the Jackson’s International Airport has been a crucial component in collating visitor arrivals data for the country.   Since the global pandemic, the PNGTPA’s marketing activities has modified its focus from the international market towards the domestic tourism market.  The biggest challenge in this area is data collection, however the PNGTPA are committed to managing. 

EDITOR’S NOTE: 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 PNG’s oil and gas industry and changes to the petroleum regime made, muted, abandoned and planned. Optimising Benefits for PNG - It is alleged that Papua New Guinea is not getting enough benefit from its petroleum resources and that the solution to such a problem might be for the Government to exact more demanding fiscal and commercial terms on sector investors.  However, the same could be said about almost any source of Papua New Guinea’s revenue that we are not getting enough impact and outcome from the revenues that find their way into the Consolidated Revenue Fund of the Government.  One might deduce that either the quality of Government expenditure is poor and unfocused, or there is gross misuse and misspending of Government funds, but in reality it is likely to be a mixture of both. Efforts to address this problem have include the creation of a National Procurement Commission and support for transparency by the Prime Minister of what has often been called a systemic problem.  But when it comes to petroleum resources, we must remember that it is after all the Government that sets the terms of investment when seeking to develop the Nation’s petroleum resources, and it is the Government that needs to police the regime thoroughly that it has established.  Aside from the poor quality of Government expenditure, the oil and gas companies that invest in Papua New Guinea do indeed need more scrutiny. Transparency of the terms of business and audit by the Government of the corporate taxation returns of petroleum licensees are the normal means by which to ensure appropriate performance and compliance of the oil and gas companies.  Need for Commerciality In the petroleum sector, oil and gas production leads to substantial income streams from sales of produced oil and gas, but getting to the development stage is not automatic. Those revenue streams need to be large enough to recompense the investors, primarily for their exploration, appraisal, development and production costs, and yet be able to pay the various fiscal and commercial demands and requirements of the Government and other local stakeholders.  And more than that, they hope that there will be a return on their investment for their shareholders, whilst they have to reserve enough funds for abandonment of fields, pipelines and facilities at the end of production. The Government needs to understand that its does not share directly in the sales revenues, but rather that it shares mainly in the profit when a particular production project is commercially viable through the taxation of profits and by taking a share of the profits when it holds equity. Fiscal devices like royalty and levies may be charged at rates proportionate to production and its value, but they are not the main devices in the current regime. If the Government exacts too much and a project thus becomes marginally economic and lacks commerciality, then it is unlikely that the project will proceed, especially if its economic viability is too diluted.  This viability requirement extends to all manner of petroleum regimes and likely success has to be weighed carefully against the general and specific risks.   Investment of Revenues When petroleum sector development takes place in the context of poor governance and poor financial management with a very leaky financial system which allows the results of petroleum development -- its revenues to be capriciously handled, misspent, or misappropriated -- the result of that enterprise will obviously be unrecognised, obscured, and unfortunately, all too often diminished. In almost all cases of oil and gas production around the world, the share of the net value stream accruing to the Government from the development of an oil and/or gas field is greater than the share of the net value that the companies get. Generally, a Government should be realising significant revenue windfalls from petroleum development activity, once all costs are paid for. Such revenues should be most carefully invested on public expenditure that is capital in nature for the good of the people, and not squandered on self-gratifying recurrent expenses.  These resources are the treasures of the people, and their value should only be mobilised to enhance the capital-based welfare of the people.    Need for Better Sector Management If a Government has a general and systematic disregard for monitoring the actual returns and benefits to the State versus the system benefits as designed and devised by prior and current petroleum policy determination, and their corresponding laws, regulations, and agreements, how can the State reliably know what it should have earned as its share in the enterprise of petroleum resource development versus what it does actually earn and receive? This seeming lack of care is often based on a lack of accountability, and a lack of an appropriate sector yardstick (based on good statistical data of the oil and gas industry) against which to measure the sector performance. Pilfering and lassitude, of one kind or another, compound the problem.  So a potent cocktail is created which prompts a demand for sector reform and change, when such is perhaps not fundamentally justified or needed. Perhaps, more ardent and diligent work might rather be required along with firmer enforcement of the current petroleum regime, but this requires heightened professionalism prompted by better terms and conditions for all that are involved in Government administration of such National assets as the petroleum resources of the country. These two problems: the lack of monitoring and accounting of the sector performance and disdain for proper sector management merge in the minds of political leaders to convince them that sector matters are not as good as they could be and therefore need intercession by way of reform. That reform may be beyond the proportions required, or even possible. Making the current regime work effectively using the current provisions of laws, regulation and terms of agreement is paramount to achieving optimum resource sector outcomes. However, if full application of these provisions is neglected for more immediate needs, perhaps inevitably disorder with be propagated and sector performance will suffer in the eyes of the State. Reform should only be embraced if it rationalises and simplifies the petroleum regime and makes it more transparent and accountable to all stakeholders. Any petroleum regime poorly applied and poorly managed will equally give suboptimal and questionable results. The Current Petroleum Regime Indeed, it would seem that no-one in Government today can articulate with much clarity the current Papua New Guinea petroleum policy that defines the applicable petroleum regime.  Over the last eight years, there have been many changes to the petroleum regime through amendments to legislation such as the introduction of dividend and interest withholding taxes, an increase in the rate of foreign contractor taxes, change to deductibility of royalty, a consolidation of oil and gas operations tax rates to a single uniform rate, and the changes to the Oil and Gas Act concerning the treatment of applications for petroleum development licences and the removal of the right to arbitration. Oddly, within the negotiations of recent Gas Agreements, basic application of many of these new provisions has been waived and new devices introduced such as a production levy and a domestic market obligation. If the changes devised in 2015 had been dutifully applied, perhaps these inventions might not have been necessary. Certainly, it is time to rewrite the Petroleum Policy Handbook published by the Department of Petroleum and Energy in 2005, and to state the current petroleum regime unequivocally. It is difficult to invest in a country if the rules of the game are not clearly articulated. Incidentally, if contract-based Production Sharing Arrangements are to be used in the future as has been suggested, all the terms of exploration, appraisal, development, production, and abandonment will have to be most carefully spelt out and agreed to. Companies will not contract their services to Government unless they can clearly see a pathway to profitability if they successfully find hydrocarbon accumulations.     Some New Policy Initiatives A few years ago, the PNG Government, led by its Gas Project Coordination Office, devised a new Natural Gas Policy of which there were several editions during the period of 2016 to 2017, none of which were duly and properly issued, and which sought to introduce changes to the fiscal and commercial terms of gas development.  Some people in Government (and a few in the industry) have taken these to be official policy, despite there being no public record of their presentation to Parliament, formal Government approval, or public dissemination. These variously included an increase in State equity from 22.5% to 30%; a production levy of 10%; royalty and development levy based on 2% of export value (instead of wellhead value); a 5% import duty on all goods and services; a 2% social levy; and 10% domestic market obligation to sell production into local markets at a discounted price; and a withdrawal of foreign exchange exemptions. Such a clamour for more benefits, whilst admirable, was sadly not quantified in any of the gas policy drafts, and the manner in which the draft documents was handled smacked of stealth and the policy clearly lacked transparency in its formulation and enunciation.  It has to be emphasised that petroleum resource development is big business, and its success or failure is enumerated in very large amounts of money underlying it, for all stakeholders. It is the numbers arising from the interaction of a variety of fiscal and commercial devices at different times in the petroleum development cycle that give rise to the overall effective split of the net value between the Host Government and the investing companies.  This cannot be guess work and requires sensitive well-informed economic modelling.    Oil and Gas Amendment Act 2020 In 2020, the Government introduced an amendment to the Oil and Gas Act that fundamentally changed the offering of the National petroleum prospectivity for exploration development and production to investors from that which was firmly established in the 1975 White Paper: Government Statement on Petroleum Policy and Legislation, an extract of which follows:   “But, before we can gain the benefits of oil and gas production, we must first find oil and gas in commercial quantities.  At present, the best way to do this is by relying on foreign oil companies, who have both the technical expertise and the financial capability to mount a major exploration programme. And in order to attract these companies for exploration, while at the same time increasing our own knowledge of our resources and our ultimate ability to control the petroleum industry, we need to offer terms and conditions that are fair and reasonable. “This does not mean that we need to be evenly generous to foreign oil companies.  There is enough potential profit in most oil discoveries so that a company can earn a generous return on its investment, while at the same time the government, as trustee for the people of the country as a whole, can secure significant revenue.  The terms proposed in this policy statement are fair and just.  They allow foreign companies to make reasonable and adequate profit, yet they ensure that the nation will benefit substantially from any oil or gas production, and that as the profitability of any oil venture increases Papua New Guinea will take an increasing share of these profits.”  The above is from the Forward of the White Paper on Petroleum Policy and Legislation 1975 laid before the National Parliament by M. T. Somare, M.P., Minister for Natural Resources and Julius Chan, M.P., Minister for Finance – two of PNG’s most esteemed leaders.  It was a strong foundation. Essentially, the 1975 policy sought experienced companies to invest in exploration at their own risk and to develop at their own risk any discovery to the extent that they were happy with the commerciality of the outcome of development and production, to which the regime would then be judiciously applied. If the commerciality was fragile, the State was not so concerned. This has changed substantially with the Oil and Gas (Amendment) Act 2020 which has introduced new criteria in a new section - Section 56A.  An application under Section 56 (1) of the Oil and Gas Act for a Petroleum Development Licence has to now pass a test as to “the benefit or otherwise to be derived by the State”, notwithstanding matters of project commerciality.  This is reproduced below in full.  Oil and Gas Act Section 56A. Minister’s Instrument of Notification to Applicant. Where subject to Section 56(1), this section applies, the Minister must: (a) by instrument served on the applicant, notify the applicant that this section applies; and (b) seek the advice of the Board on whether the applicant’s proposals should reflect a minimum expected return to the State over the life of any recovery of petroleum from the blocks the subject of the application and, if so: (i) what that minimum expected return should be (specifically or according to a conditional or sliding scale or calculation); and (ii) the appropriate methodology for its assessment or calculation; and (iii) the appropriate milestones for its achievement (and any compensation regime that should apply if those milestones are breached); and (c) based on, but without being limited by that advice, the materials already furnished by the applicant in support of the application and any other information otherwise available to the Minister relevant to the application, form the Minister’s own view on the matters referred to in Paragraph (b) and, by further instrument served on the applicant, notify the applicant of that view; and (d) where proposals already provided by the applicant: (i) meet or exceed the minimum requirements contained in that farther instrument; and (ii) contain binding undertakings to that effect enforceable on acceptance by the State as. an agreement pursuant to, or as an amendment to an existing agreement under, either of Sections 183 and 184, serve an instrument on the applicant under Section 56(l)(a), (b), or (c) as the Minister determines; and (e) otherwise proceed under Section 56(l)(b) save that the Minister must as a minimum require proposals under Section 56(1 ){b) at least satisfying the minimum requirements referred to in Paragraph {d}, and the Minister may in any event, and notwithstanding any other provision of this Act to the contrary, impose conditions on the grant of any application to which this section applies that implement the Minister’s view referred to in Paragraph (c). This is a paradigm shift in the petroleum regime, as investors who have risked their money in exploration, appraisal and development planning can now only pursue a recoupment of their investment by seeking a licence to develop the discovery, if it is not only necessarily commercially viable, but also meets “the minimum expected return to the State over the life of any recovery of petroleum” which criteria is only examined and assessed by the Petroleum Advisory Board and is subject to the Minister’s own view at the time of application.  This is certainly putting the State in the lead and advancing control of the sector, hopefully for the better.   As brave as it attempts to be, such provisions dealing with the benefit arising from the development and production of oil and gas from a field, will likely be swamped by the key exogenous variable of the oil and gas industry, which is the crude oil price itself. However, the fact that a planned petroleum development might be the subject of such scrutiny would in itself be a leap forward in sector management, and the minimum expected return to the State will need to be defined most careful and should consider the extremely volatile nature of the industry. Moreover, such analysis will need to be professionally undertaken emphasising once again the need for better sector management institutions manned by skilled and experienced persons with appropriate technical and financial support. Refusal of Development Also, in the 2000 amendment, the hitherto unlikely outcome of a refusal of a willing application for a petroleum development licence has now become a defined option for the Minister who is now required to assess whether the proposals for development attached to an application will pass an approved threshold level of benefits for the State, and if they do not: to refuse the application. On top of that, the right to take the Minister’s decision to refuse an application may no longer be referred to international arbitration by virtue of the Oil and Gas Act. That option is now closed.    An Avalanche of Change Our dilemma is to see through this avalanche of sought-after-changes and see what the PNG Government really wants.  As the Governors of three Provinces (Gulf, Hela, and Western) said in a joint letter dated 30th August 2020 to the Prime Minister: “What is the end game for the Government with these changes?" Do we want State control on (sic) Licences or increased State take?” One wonders whether, or not it is both, but one ponders how will such desires be fulfilled?    How Industry Can Help If the oil and gas industry is to remain in business in PNG with credibility, it has an implicit, if not necessary, duty of care to guide the Government out of the problems into which it has fallen, by enlightening them as to the commercial limitations of seeking more and more benefits without due regard to good revenue management, good governance and high fiduciary standards, whilst understanding and allowing for the Government aspirations of heightened benefit and control of the sector. Clearly, the concessional terms which highly incentivised the PNG LNG Project should not be allowed to persist, and one might regard it as indecent for the large corporate to try to cling to such incentives. PNG has shown that it can host world class LNG development and can be home to world class companies such as ExxonMobil. The green-field fear factor is diminished, and future projects will encounter fewer hurdles in seeking the support of shareholders and financial institutions. If the oil and gas industry of PNG wishes to be part of that future, it might be wise of it to provide the Government the benefit of its global knowledge, so it may share in that future. PSCs Can and Do Work The Government has expressed its intention to move to a Production Sharing Contract (PSC) system in 2025 and has already introduced enabling Constitutional and Organic Law legislation.  Whether such a move gives the Government what is wants, we shall see.  There is nothing intrinsically wrong with a PSC system. The author has worked in many countries with such petroleum regimes: putting some together, pulling others apart, whilst repairing some. The one thing that a PSC gives the Government, if the industry is well-managed, is much better control of that industry for planning purposes and an ability to resolve intra-company wrangles, which often delay project development.    One could say that some of the most infamous despots of the world and their oligarch associates in countries with substantial oil and gas reserves know that to milk the system handsomely, one needs to have a well-run petroleum industry, else there might be nothing to plunder!  But it goes without question that that if we wish PNG to gain optimal benefits from our petroleum industry for the people at large for their development or indeed even for personal enrichment of a political elite, one needs to have efficiency in the business of conducting petroleum exploration, development, and production, and that means good governance and proper understanding and accountability. Competent Petroleum Management Agency Required Normally, good governance is achieved through the Nation having a strong and competent petroleum sector management entity: call it a Department of Petroleum, Ministry of Petroleum, National Petroleum Agency, Commission or Authority, or whatever.  It should have very well-educated staff, who are knowledgeable and experienced.  Some 37 years after the first major oil discovery, there are plenty of experienced Papua New Guinean people within the petroleum industry either working in PNG or in the diaspora, whom if properly remunerated can become the core of the proposed new National Petroleum Authority. Back in the 1970s and 1980s, there was little understanding about petroleum matters within PNG; that is not the case today, and many of PNG’s petroleum technocrats and businessmen are first class.  Indeed, some of the very best have and are leading lives as highly competent international oil and gas men and women around the globe. They need to be seduced to come home and build PNG’s petroleum industry to greater heights. Good Record Keeping Required One of the basic tasks of managing the sector is understanding the range of fiscal and commercial outcomes that may stem from the business. And like all business, whether a simple trade store or a multi-billion-dollar oil and gas company, we can only determine the condition and health of the enterprise if we maintain accurate records. The same too applies to the Government’s management of the petroleum sector. It is not sufficient just to cry and shout without a basis, especially when the main determinant of the sector’s outcomes is the price of crude oil, and consequently due to referencing against crude oil prices, the price of natural gas and LNG. Volumes and prices need to be carefully monitored with respect to all of PNG’s petroleum operations both upstream and downstream, as well as global industry statistics and prices. Economic Modelling Required If one has good sector statistics, one can monitor actual performance against anticipated performance.  That anticipated performance will normally be presented by the licensee as an open-book economic model at the time of submission of their proposals for development accompanying the application for a petroleum development licence. The model should be agreed between the State and the licensees to be as accurate as possible model encompassing all of the costs and benefits to the State and to the licensees. The model should show all scenarios and reflect the implications of crude oil prices and modes of project financing. Even better, the State should have a model of its own, developed in-house using its own petroleum economists, so that they are totally familiar with the contained algorithms and able to vary and adjust the fiscal and commercial terms as needed to assess different policy scenarios and options for the Government. The results of the modelling combined with different projections of the crude oil price should guide decision making about all and any petroleum project.  The ongoing use of the model to reflect real costs and calculated real benefits based on produced actual volumes should be a tool for ensuring that the system benefits are being realised.  No number of National Oil Companies, Government Petroleum Authorities or other entities will be adequate unless this fundamental work is done. We do not navigate the oceans or skies without charts and careful guidance; the same too, applies for a Government wrestling with the development of its petroleum resources: it should not expose such valuable patrimony to reckless unaccountable development, and it must take all necessary actions to ensure measurable account of petroleum operations. The time for the industry dictating development terms for their corporate satisfaction and to their own agenda and timetables has gone. Reform therefore should encompass excellence in all aspects of the business whether it is overhaul and more ardent application of the current petroleum regime, or indeed a move to the use of PSCs.  No single regime brings about greater fiscal or commercial benefit than the other, and any regime has to recognise the fundamental requirement that the development of discoveries of petroleum accumulations, either oil and/or gas needs to be made commercially viable in order for them to be developed. PSCs do indeed bring about more control by Government, but only marginally more than the current regime, were it to be fully enforced and complimented with more comprehensive regulations to give effect to some of the provision of the Oil and Gas Act. PSCs require considerable responsibility on the part of the Government petroleum management agency to lead the sector well for the benefit of the country and its people. One has no doubt that there is enough adequate qualified and experienced PNG people in the sector to accomplish this, but they will need absolute rectitude, dedication, and professionalism to achieve it and gain the desired outcomes. Essential to success will be the support appropriate support from the Government to give it the necessary financial and human resources to take on a more advance role in managing and regulating the petroleum industry of PNG.     Michael McWalter is a technical specialist in petroleum industry regulation, administration, and institutional development with over 42 years’ experience of the oil and gas industry, predominantly in the Ministries and Agencies of newly emerging oil and gas producing nations, particularly in PNG.

Swire Shipping, a leading provider of sustainable and innovative shipping and logistics solutions, has published its Sustainability Report, which details its goals and achievements in the areas of sustainability and decarbonisation for the calendar year 2022. The Company’s sustainability strategy provides the framework and structure to ensure that it meets its sustainability commitments across Environmental, Social and Governance (ESG) areas, and the progress made on achieving such targets is reported each year. In 2022, key priorities have been identified based on the material sustainability and decarbonisation topics which drive long-term value for Swire Shipping’s business and stakeholders, and alongside the short-, medium-, and long-term targets developed to step up the Company’s ambitions and measure performance. “Our sustainability strategy centres around three core pillars – Thriving Environment, Thriving People, Thriving Partners – and is a mark of commitment to creating a more sustainable future for our stakeholders, customers, employees, and the communities we serve. Driven by targets closely aligned with our business strategy, and with several of the United Nation’s Sustainable Development Goals (SDGs), it encompasses all the areas where we feel we can make the most difference, including our efforts to champion the role of women in maritime, work collaboratively with our internal teams and external partners to continuously improve safety standards across all areas of our operations, and support the communities and natural habitat of the Pacific Islands,” said Jeremy Sutton, Managing Director of Swire Shipping. In 2022, Swire Shipping received recognition for its sustainability efforts and display of good corporate governance, having been conferred the Environmental, Social and Corporate Governance Award at the Seatrade Maritime Awards 2022, one of the most prestigious global award programmes in the maritime industry; as well as a Silver Medal from EcoVadis, the world’s largest and most trusted provider of business sustainability ratings. We have detailed some highlights from Swire Shipping’s Sustainability Report 2022 in Appendix A below. Swire Shipping’s annual Sustainability Reports keep stakeholders informed of its sustainability progress in an open and transparent manner. The 2022 Sustainability Report has been externally assured against the Global Reporting Initiative (GRI) Standards 2021. Sustainability remains central to Swire Shipping’s business strategy, as reflected in its vision statement: to be the leading provider of safe, sustainable, innovative supply chain solutions and our customers’ partner of choice. The Company will continue working with its customers, peers, suppliers and communities towards a more sustainable future. Read Swire Shipping’s Sustainability Report 2022 in full on our corporate website.   Appendix A: Highlights from Swire Shipping’s Sustainability Report 2022: • Thriving Environment A Decarbonisation Roadmap has been developed with short-, medium- and long-term targets to decarbonise vessel operations. Swire Shipping has a target of Net Zero GHG emissions by 2050 and the adoption of near zero emission fuels in its operated fleet. Carbon intensity performance at the end of 2022 was 11% below the annual target. A 64.69% year-on-year reduction in Single-Use Plastic (SUP) water bottles consumed across Swire Shipping’s owned fleet was achieved, bringing the overall reduction in SUP water bottles used on board to 99.67% between 2018 and 31 December 2022. • Thriving People Long-term preventive measures are in place to improve fleet safety, and the Company continues to work closely with its stevedoring partners and other third-party contractors to improve safety in cargo operations (i.e. its SafeWOW Programmes have been extended to another five stevedoring partners in 2022). The Company has set KPIs of achieving increased gender diversity at sea and in the offices. At the end of 2022, 4.3% were female seafarers (Target: 10% by 2026) and 21.8% were female senior managers (Target: 30% by 2025). 217 long service awards were issued to employees ashore and at sea, for lengths ranging from 10 to 30 years, a testament to the company’s ambition to be an Employer of Choice. • Thriving Partners More than 1,100 tonnes of recyclable waste have been shipped out of the Pacific Islands under the Moana Taka Partnership since 2018. Swire Shipping has supported over 100,000 beneficiaries in key stakeholder committees through Corporate Philanthropy initiatives. Westwood Shipping Lines Inc. (a subsidiary of Swire Shipping) received the Blue Circle Award from the Port of Vancouver for the 14th year running; Swire Shipping received the Sapphire recognition tier for four years in a row in the Protecting Blue Whales and Blue Skies programme in the San Francisco Bay Area and the Southern California Region.

With less than two weeks to go before the start of the inaugural Community Affairs and National Content Conference and Expo (CANCONEX), activities in the host city of Lae, Morobe Province have ramped up feverishly in anticipation of the landmark conference.  With more than 700 business delegates expected to descend upon the city for the conference, the demand in the host city has increased significantly, with many leading hotel and accommodation, transport and service providers already booked out for the duration of this event. This has been a massive positive for PNG's second city which is usually overlooked for national business events. In providing an update on preparations for CANCONEX, President of PNG Chamber of Mines and Petroleum, Anthony Smaré spoke of opportunities for businesses in Lae city, with this influx of people who will be attending this event. “Since the announcement of CANCONEX, the Chamber has been assisting our member delegates, both project operators, and landowners, to source flights, accommodation, and transport requirements for their duration of stay in Lae. Although we expected significant demand in a national content conference, even we were taken by surprise by how well the business community has responded and how quickly the main Lae hotels were booked out!" "Given the immense demand for the dates around our event, this has led to a shortage of accommodation options, with many leading accommodation providers reporting that they may be unable to provide for the increase in numbers in Lae. Similarly for vehicles, as well as air travel options into Lae for the conference and expo dates." The Chamber is therefore seeking to provide alternative options for delegates, and is in discussions with a few providers, to ensure that these additional options are provided to those who will be attending this important event. This includes a discount with the PNG Air for flights into Lae, discounted accommodation rates for selected accommodation providers, as well as organizing shuttle services for delegates to the official conference venue on the days of the event. We thank the Lae business community, who have provided the support in ensuring that delegates to CANCONEX are being given priority for services during CANCONEX. We look forward to welcoming all our delegates to Lae, for CANCONEX 2023.” Registration for CANCONEX is still open, with a special 50% discount off the registration price available to landowner representatives from project areas, who are endorsed by their respective project Community Affairs teams.