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Changing the landscape of the petroleum industry in Papua New Guinea

IN LINE WITH THE VISION TO “TAKE BACK PNG”



Article by: Roger Kewa Avinaga

Roger Kewa Avinaga is an accomplished corporate and government executive and Board Director having worked in oil, gas, mining and energy sectors for 20 plus years. He also worked for an international organisation – The World Bank Group. He has in-depth knowledge, understanding and experience of business/commercial environment, financing, project procurement and management, economic/financial modelling, fiscal and regulatory regimes acquired through dealing with oil/mining companies, investors, banks/lenders, multilateral institutions, governments and key stakeholders in exploring new business opportunities, creating partnership, joint ventures, farm-out, project approval process and initiation to of major resource projects.



“Take Back PNG” - Petroleum Sector Perspective

A little over a year ago when the current Government took office it announced the new Government’s vision to lead the country to prosperity through undertaking some fundamental changes including taking hard line policy and legislative changes to the country’s petroleum sector. The Prime Minister said that it didn’t matter if the measures his Government take cost his job as the Prime Minister of Papua New Guinea. The Government adopted the slogan of “take back PNG” and to make Papua New Guinea become the “richest black nation” in the world. This is the bold move the Government announced since Independence. While some took this slogan as a positive vision to rescue and move the country forward others were disturbed off their comfort zone. For the Government to announce and take such a bold stand on “take back PNG” one would assume that the country is in “foreign control”. The Government could see that something is not right with the manner in which the country and its country’s resources has been managed to date. The Prime Minister had seen issues plaguing the nation despite of the fact that the country has abundant resources including oil, gas, minerals, forestry, fisheries and cash crops. The Government firmly believed that these issues will be appropriately dealt with and the country “regained” through translating and implementing the Government’s vision to “take back PNG”.

Current Structure

Taking back PNG may be interpreted from different angles. From the petroleum sector standpoint this may be defined as a vision to empower the role of the State and Papua New Guineans to fully participate through increased ownership and control of the petroleum resources development in the country. To achieve this, there must be drastic and structured changes made to the policy and legislative settings, fiscal regimes, restructuring of systems and processes, technical and compliance, among others. The country must increase ownership of the resources by ensuring the policies, laws, fiscal regimes, systems and processes are designed for fair and equitable distribution of resource benefits to every Papua New Guinean. The Government expects transparency, accountability and honesty in handling project benefits and discourages unfairness, bullying, greed, and everything that is wrong. The Government has also been very clear since taking office that it has no issues with oil companies operating in the country because the country needs them to bring clean money, technology, ideas, experience, skills and knowledge the country needs to develop the resources.

It is probably fair to state that the manner in which the country’s oil and gas resources have been exploited is influenced and dictated by the policy, legislative and fiscal regimes the country has adopted since Independence. These systems have been structured to favour the foreign companies, and not so much the resource host country. The salient features that qualify this view are;

  • Ownership structure – favours the oil companies on account of 77.5% equity ownership foreign companies own and 22.5% equity owned by the State.

  • State has a minority stake on the basis of the 22.5% equity in petroleum projects.

  • The industry is essentially controlled by foreign companies whereas the Government’s role is restricted to regulatory, fiscal and landowner related issues matters.

  • All oil and gas projects are operated by foreign oil companies.

  • Project benefits mostly favour foreign companies on account of more concessions/exemptions (discounts) granted to them. For example, in negotiating the PNG LNG and Papua LNG Gas Agreements the State exempted foreign companies from paying import/export taxes, Dividend Withholding Taxes, Goods and Services Tax, Tax Credit Scheme, among others.

  • National Content Plan – zero to very limited local participation in the construction phase such as PNG companies not taking part in engineering work. On record PNG participation during construction of the PNG LNG accounted for around 10-20%. Foreign companies dominated this area.

  • The State has lost control of the petroleum resources. Foreign corporations have taken ownership and control of the country’s important hydrocarbon assets. PNG’s destiny and future is at stake.

PNG inherited a system that favours foreign companies more than the State. This is why the Government has committed to making fundamental changes and tidying up of the loopholes. The key drivers relevant to the hydrocarbon sector that underpin the Government’s vision to “take back PNG” constitute the following:

A) Elevated participation in the exploitation and development of the petroleum resources,

B) Equitable distribution of benefits across all stakeholders,

C) Maximize value of the petroleum resources for lasting benefits to PNG communities,

C) Self-sufficiency in the downstream and energy supply space,

E) Improve the balance of payment and reduction of debt,

F) Promote sustainable economic growth,

G) Increased revenue generation.

Furthermore, the drivers include increased ownership and control over the country’s important resources and assets, creation of investment opportunities for PNG citizens and reduction in capital flight abroad, increasing spill over effect on sectors of the economy and improving the living standard across communities and societies in the country. These are key economic drivers that will support taking back PNG.

The government has an important role of promoting the national interest through actively facilitating policy, legislation and regulations. Without government intervention, very little will be achieved and the vision to “take back PNG” will not be achieved. Therefore, it is imperative that the Government ensures policy and legislative settings, systems and process re-defined and restructured to ensure maximum value from the resources are generated.

Petroleum is Bigger

Petroleum is bigger than we think and is crucial not to have a narrow view of this resource. The government mustn’t allow foreign companies to continue to play dominant role in the development of the resources. The State must elevate its position through increasing ownership and control of the country’s resources. The Government must be in the driver’s seat. Notice the following salient features of petroleum;

  1. Petroleum dictates and influences the global geopolitics and equated with politics, authority and power, and has the ability to create friendship and enemy across borders and within jurisdictions,

  2. Petroleum has the capability to dictate and influence the global economy, international business environment and movement of global trade. Notice the fluctuation of oil prices, it can either boost the global economy up or downgrade economy to a lowest point.

  3. Petroleum can also influence a country’s economic growth. Notice too that the country’s economy plummets when oil price hits rock bottom. It takes years for oil producing country to recover and rebuild its economy.

  4. Petroleum is characterised by high capital intensive and long lead time and long life span. Investment in oil and gas is too risky but highly profitable and pays off healthy dividend over many years to come.

  5. Petroleum industry is highly complex and sophisticated, covering different segments along the entire value chain including upstream (exploration and development), midstream (processing and refining) and downstream (petrochemicals, retailing and marketing) and connects different players along the entire value chain including oil companies, service providers such as drilling services, catering services, security services, engineering services, financiers/lenders, multilaterals, National Government, lower level governments, NGOs, Landowners, producers, off takers, buyers, sellers, traders, lenders, and transport providers.

The Governments’ important priorities are not necessary oil companies’ priorities. Oil companies are dictated by corporate interests, profit maximisation and influenced by global factors such as price fluctuation, change in technology, niche markets and political dynamics. On the other hand, project host governments’ priorities are dictated by the need for infrastructure, social services such as health and education and development aspirations. Essentially, the priorities of the Governments and the corporate entities do not match.

The decisions that the petroleum host governments make, the policies and laws that they design and develop must consider and embrace the important features of petroleum. The Government mustn’t make decisions in isolation from these features. The petroleum industry also attracts different players along the value chain such as sellers, off takers, financiers, service providers, governments, multilateral, landowners, lower level governments, NOCs and NGOs which have myriad of interests in the extraction and development of the oil and gas resources.


Petroleum Sectoral Issues that Require Improvement

Several frontline issues directly affect the petroleum industry in Papua New Guinea. These issues need tidying up and the Marape Government has taken the initiative to take lead and resolve these issues through implementing the Government’s vision of “take back PNG”. The issues that must be the Government’s priority include;

(a) State’s Passive Role in Petroleum Project Development

The extent to which the petroleum agreements or contracts are structured and drafted for exploration, development, processing, transportation and selling of the hydrocarbon resources are influenced and dictated by the fiscal regime the country adopted at the Independence. PNG adopted Royalty/Tax System or Concessionary fiscal system where rights are issued through permits/licenses to oil companies to explore, develop, pipe, process and sell petroleum. The Government in then collects rents through royalties and taxes. However, in PNG the State has legal right to acquire up to a 22.5% interest in a petroleum project. The 77.5% interest is retained by the oil companies. The State becomes a minority stakeholder with the 22.5% interest compared to the 77.5% oil companies take. The State’s 20.5% equity interest is managed by the National Oil Company, (Kumul Petroleum Holdings) and the landowners’ 2% equity is managed by the Mineral Resources Development Company (MRDC). The NOC becomes a Joint Venture Partner in petroleum projects through accession to the JVOA (Joint Venture Operating Agreement) and other agreements but the NOC retains minority stake in the project. If a project is integrated like the PNG LNG Project, the interest split flows through from the upstream to the downstream on pro rata basis. The NOC has minority stake in a project hence, its chances of elevating to the role of an operator is quite clearly remote. The NOC is also not expected to hold a veto power or major voting power on project operational issues as it is limited by the minority stake in the project. So from ownership and control standpoint it is the foreign companies who are in the driver’s seat. On the basis of the 77.5% interests the foreign corporations hold in a project they take on the operatorship role, control the management of the projects, and they can easily become very power and influential. The State becomes a passive player in the exploitation of the hydrocarbon resources in the country.

(b) Change of Fiscal Regime

The manner in which contracts, agreements, laws, taxation terms and State participation structured by petroleum host countries is dependent on the types of fiscal regime a country may have. The main fiscal system practised by petroleum producing countries include: Royalty/Tax System, Production Sharing Contracts (PSC), Service Agreements/Contracts and Hybrid fiscal regimes. Concerns have been registered regarding the country’s fiscal regime that it turn to favour foreign investor more than the State. PNG’s Royalty/Tax system was inherited during British and Australia colonial administration. Numerous calls have also been made for PNG to switch to other fiscal systems such as the Production Sharing Contract (PSC) practised by Malaysia and Indonesia, or other fiscal systems that may benefit the State more than the Royalty/Taxation system. Switching from one fiscal system to another isn’t a mere policy and legislative changes. It is more complex. Changes to a fiscal system must be backed up with comprehensive review, assessment and comparative analysis of the fiscal regime against fiscal systems of countries within the region or of other jurisdictions. The assessment will show where PNG sits in relation to benefit distribution, and more importantly whether or not there is any logic PNG switching to another system.

In the past the Government made several attempts to review the Royalty/Tax system against other fiscal systems but none of these initiatives have been progressed further. However, the Marape Government has firmed up its position on switching from Royalty/Tax system to Production Sharing Contract. The fear is that the Government may head straight into making policy and legislative changes which is not the right approach. There must be qualifications for any changes contemplated as this will involve a major shift and overhauling of a well-established systems. Studies will demonstrate whether or not the current fiscal system can be abolished for another favourable system. This will require mobilising fiscal experts such as Van de Meurs, Wood Mackenzie, Daniel Johnstone and others. These studies must serve as prerequisite to policy and legislative changes. The best thing the Government can do is undertake a comparative analysis of the fiscal regimes to determine whether PNG is doing well or not under the Royalty/Tax regime. In the absence of such studies PNG will not know if project benefits are in its favour. On practical note, PNG may already be, on average, receiving more benefits than foreign investors under the current Royalty/Tax system, and if so there may be only minor adjustments required to the current Royalty/Tax system rather than the wholesale changes in view of switch to other fiscal system that might not work for PNG.

A comprehensive review and assessment of PNG’s fiscal regime against similar fiscal regimes is necessary before embarking on policy and legislative changes. It is very clear changing of fiscal system is on the priority list of the Government for implementation and this will be undertaken as part of the petroleum sector wide improvements. The Government re-affirmed its position to change the country’s fiscal system during the recent amendments to the Oil and Gas Act 1998.

(c) Legislative Reform

Central to the petroleum sector wide changes the Government is contemplating it has set his target of improving the country’s petroleum laws. There is general concern that the country’s laws have uncharacteristic flaws. This is why the country is missing on important project benefits derived from resources extraction such as oil, gas and minerals. Due to legal flaws and the country is also missing opportunities. Certain provisions of the law favour foreign oil companies hence, these foreign corporations have taken nearly full ownership and control of the country’s petroleum resources. Such predicament exists as result of gaps we have in the policies and laws. For example, section 165 of the Oil and Gas Act 1998 provides that the State will only take up to 22.5% equity interest in a project. This limits the State from increasing its equity position. The Government is obviously not keen on seeing the plight of the country continue in this form. The Government has set its eye on undertaking some serious corrective measures that ensure the legal flaws are appropriately addressed. Several underlying reasons underpin the Government’s determination to amend the petroleum law. The Marape Government has stuck with its commitment to amend the Oil and Gas Act. In introducing the Bill on the Floor of Parliament the Government defended its actions to amend the oil and gas laws: (a) Certain parts of the law are in conflict with the national interest, (b) The country has been missing on the resource benefits, (c) Some parts of the law are out dated and do not reflect the current trend of the industry, (d) The country does not have ownership and control over its resources. The country’s important oil and gas resources are in foreign hands through transfer of rights State grants to the companies in the form of permits and licenses. The Government has set its goal to correct the flaws in law which the Government is determined to implement it in the national interest of the country.

The petroleum resources sector is owned and controlled by foreign corporations. The petroleum industry encompassing different segments along the value chain including exploration and development, midstream (processing/refining) as well as downstream (marketing/retailing) are operated and controlled by the foreign companies. The petroleum resource owner – the State comprising the National Government, Provincial Governments, Local Level Governments, and project impacted landowners have not had meaningful participation in the resource development. The petroleum sector requires major restructuring of the systems and processes, policy, legislative, fiscal and taxation regimes. These changes will improve the State’s position in terms of ownership, control, decision making and increased participation in resource development.

The seriousness of the Government in changing the law was demonstrated in the recent amendment to the Oil and Gas Act 1998. This is the first of the series of amendments to follow. The first amendment to the Oil and Gas Act 1998 centred on two sections as outlined below;


  1. Sections 54, 56 & 57 of the Act had allowed the applicant of a Petroleum Development License (PDL) to take the matter to the Arbitration in the event the Ministers refused to grant the license. This attracts international Arbitrators and foreign countries involvement. None of the PNG lawyers or judges will be involved in the Arbitration because the foreign judges or lawyers have no local trainings or know the cultural context of PNG. This exposes the State at high risk of involving billions of kina which the country may not afford it. The amendment to the three sections ensures that there is no longer risk to the State; and

  2. The other set of changes relate to Sections 183, 184 & 185 which deal with Agreements. The order of the country’s legislations should be that the Act is superior to the Agreement. In other words, the Agreements are product of the Act and therefore subjected to the law. However, prior to the amendment, the Agreements have been operating as though they are above the law. This, in itself, causes conflicts. The Agreements should be merely contractual arrangements and not given same or supreme status over the Acts. The flaw in the law has now been rectified through the amendment. The Oil and Gas Act 1998 remains supreme to agreements executed under sections 183, 184 and 185 of the same Act.

The recent amendments to the Oil and Gas Act 1998 and passing of the same by Parliament copped criticisms from different sectors of the industry. The PNG Chamber of Mines and Petroleum and others in the industry circle criticised the amendment due to lack of consultation especially, with the industry. The argument concerning the amendment to the petroleum law may be subject of discussion at another time but from the Government’s commitment standpoint, the Government has in fact achieved its commitment to change the law.

(d) Negotiating Gas Agreements

Having negotiated the first and second LNG Gas Agreements the next major gas development is P’nyang. Experience of the first and second LNG projects has been seen as lost opportunity and giving away concessions to filthy rich oil companies. The experience from the PNG LNG would have provided sufficient lessons in order to negotiate better terms in Papua LNG. That did not happen. The experience in negotiating Papua LNG Project Agreement did not improve from the first LNG Project. The expectation of negotiating better terms in Papua LNG failed.

The negotiations of the first and second LNG Projects generated more dissatisfaction among the State parties especially, regarding the manner in which the gas agreements were negotiated. Immediately following the formation, the Government re-negotiated the Papua LNG Gas Agreement but only with slight improvement. The four points the State team negotiated include National Content Plan, Third Party Access, LNG Shipping and commitment by the oil companies to inject additional foreign currency into the country. The re-negotiated terms were contained in a letter which stated that the four points would be negotiated. It appears that this may not be the final negotiated position meaning that the parties may negotiate again.

The thing about both gas agreements is that they have been negotiated, signed off and so they are essentially done deals. These agreements cannot be unwinded. The agreements are legally binding and the parties have been locked in to the agreed terms. The PNG LNG project is six years into production. These agreements were “poorly” negotiated on the part of the State. However, on positive note these experiences should enable the State to improve on negotiating P’nyang Gas Agreement and future gas agreements. Future agreements should be handled differently from the experiences of the first and second gas agreements if the State wishes to see a better outcome.

The important question is how can the State improve on the next gas agreement negotiations? The Government has taken a positive step in addressing the legal flaws. In the recent amendment to the Oil and Gas Act the Government has amended sections 183, 184 and 185 which deals with the agreements. The issue State had prior to the amendment had been that the agreements were superior to the Act, when it supposed to be subjected to the law. The agreements became powerful and dictated the same law that provisioned its existence. The recent amendment now ensures that Oil and Gas Act sits above the agreement and that is the right order.

On account of the previous gas agreements concerns have been raised regarding the representations by the negotiators whether or not they have genuinely represented the State as the agreed terms fell below the expectations of the State. It is not known if the outcome of the agreements exposes the weakness in the negotiation techniques, the negotiating team and whether or not there have been clear directions from the Government as to what it really wants out of the negotiations. Past agreements have been “hijacked” or “dictated” by a handful including advisors thereby subjecting the agreements to abuse of processes and systems and ending up with the agreements that fail to serve the interests of the State.

The repeat of the same is not expected by the Government in negotiating the P’nyang Gas Agreement. P’nyang is the only single largest gas volume of 4.2 tcf yet to be negotiated. Other discovered gas fields have less than 1 tcf and as low as below 100 bcf. The negotiators of P’nyang gas must ensure superior terms are achieved. The Government has stepped up when it tabled superior terms for negotiating P’nyang gas agreement. This made the project participants led by ExxonMobil reject the terms proposed by the State. The project participants argued that they did not stand the chance of generating sufficient benefits from investment on the basis of the terms proposed by the State. The State was never going to back down having given away more concessions to the companies on two major LNG projects. The State has lived with the bitterness of missed opportunities and giving away unqualified concessions but on this occasion, it had to step up with superior terms.

The negotiation on P’nyang Gas Agreement has been deferred due to the COVID-19 pandemic but will resume anytime. The State team should stand by its proposed terms and negotiate it through with the project participants. If the negotiators achieve a superior outcomes this will be a positive achievement for the country. Having the right negotiation team, negotiation skills and in-depth industry knowledge are some of the key drivers the negotiators should possess to negotiate superior terms.

The State may further improve its position by delaying the negotiation on P’nyang gas development until the policy and legislative framework is tidied up. There are several outstanding matters the Government can sort out first including changes to the Oil and Gas Act and finalisation of the Gas Template Agreement. The recent legislative amendments are an encouraging start. While further changes are made to the law the Government should focus on getting the Template Gas Agreement approved as this will serve as a model gas agreement for negotiating future gas agreements rather than reinventing a new gas agreement for every project that has been proposed for development. Further work is also required in developing the gas policies. The Government approved in principle three gas policies but further work is required in finalising them. Completing the outstanding tasks will enable the State to consolidate and strengthen its position in negotiating future gas agreements and ultimately achieve better outcomes. The State looks vulnerable without the policy and legislative framework in place. The delay in P’nyang gas agreement negotiation may be a blessing in disguise for the State to regroup and consolidate its position for tough negotiation with the project participants.

(e) Further Areas for Improvement

For a developing country like PNG its prosperity rely on foreign investment. Changes to policy and legislations should also consider the important roles played by the foreign companies in developing the resources sector. The foreign companies have the knowledge, experience, financial and technical resources that PNG as a growing nation surely requires to develop its oil, gas, minerals and other resources in the country. Further sectoral changes are required on the following fronts:

(i) Institutional Restoration and Strengthening

The Department of Petroleum and Energy is duly legislated institution of the Government responsible for the country’s hydrocarbon and energy. The Department’s role is to encourage exploration and development of the country’s petroleum and energy resources for the benefit of the country. Nevertheless, the Department has not lived up to its expectations in discharging the policy, regulatory and legislative roles due to lack of leadership and government support, high staff attrition and loss of motivation. Over time the important institution has disintegrated and lost credibility, lack impetus, drive and focus to promote and regulate the industry. The Department has lost leadership and direction in providing technical advice to the Government especially, during negotiating agreements. The department needs to be strengthened to effectively and efficiently fulfil its role through undertaking the following actions:

A) Improve manpower planning and management in the Department,

B) Restore confidence and motivation in the staff,

C) Provide daily administration of the Department including budget management,

D) Provide leadership and direction for the Department to actively lead in formulating policies, legislation and regulation,

E) Strengthen the technical leadership role of the Department,

F) Improve license processing and administration,

G) Positive impact on landowner and lower level government relations.

(ii) Petroleum Sector Improvement

The progression of this country depends on who is in control and how well the State manages its resources. Up to this point, the petroleum industry has virtually been controlled and dominated by external players. In spite of the industry been the source of infrastructure development, revenue generation, creation of employment opportunities and economic growth the exploitation of the petroleum has been dictated by external parties. Driven by their corporate objectives, profit maximisation, and external factors such as niche market or narrow window of opportunity oil companies set time lines and project schedules when projects get developed. When opportunities are presented to better leverage State’s position those entrusted to negotiate better outcomes end up conceding to foreign companies’ agenda and compromise the State’s position. The Government must undertake sector wide restructuring of the systems and processes, policies, laws, fiscal, licensing systems and compliance administration to the extent that the country is in control of its destiny to economic growth, prosperity and independence.

The Marape Government has clearly set its bearing on improving the petroleum sector in the country. The petroleum industry is highly complex and sophisticated. The sector encompasses different segments from the upstream to midstream and to downstream. Along these value chains, different policies are required to be developed and ensure the gas resources are developed for the benefit of the country and the stakeholders. There is no secret that the State wants more benefits from its resource extraction. But it has also set its bearing on improving ownership, control and active participation in the development of the country’s hydrocarbon resources.

Consider the entire segments of the petroleum industry. There is a general feeling that the country’s petroleum industry is essentially controlled by the foreign companies from exploration and development, the midstream including processing/refining, marketing and retailing as well as pipeline infrastructure. The petroleum resources owner, the State has been pushed to the periphery. The State ends up being a minority stakeholder with the 22.5% interest it has in petroleum projects. Compare that with the 77.5% interest owned by the foreign companies State’s ownership of the project is four times less than the foreign companies’. The State has no control, no operatorship status and no involvement in project decisions. The role of the State is restricted to regulatory, legislative and policy role and obviously cannot play commercial and technical role. For this reason, it has created a NOC to assume the commercial role but the State owned entity cannot become an influential player because it carries a minority stake in the project. Increased participation in the resources sectors require some restructuring and overhauling of the systems and processes, policy, legislations, fiscal and taxation changes in order that the State’s expectations are met. One way would be to empower its entities with clearly defined ownership structure and control so that the country will meaningfully participate in the resources development.

The Government is also adamant of improving the State’s position on certain issues some of which include;

  • National Content Plan –improved and greater participation in the construction phase such as PNG companies taking part in certain engineering work.

  • Domestic Market Obligation – clear policy on DMO gas including increasing the DMO gas from the recently agreed 5% DMO in the Papua LNG Project to up to 15% DMO.

  • Third Party Access – the TPA policies to allow future producers and buyers to access infrastructure with reasonable tariff arrangements.

  • Other specific issues that require tidying up include increased State equity participation, sunk cost and financing through carry arrangement. These have been the impediments to State playing increased role.


Conclusion

It is important to point out that the real issues impacting the petroleum sector has been identified and discussed. Institutional restoration and strengthening is required as well as policy, legislative and regulatory changes. Also, the technical role of the Department needs to be improved and it can do so on the basis of instilling leadership, direction, motivation and confidence to the Department. Further, serious issues plague the industry especially, from the State playing dominant role in the development of its important resources. At present, the State has no control on how the petroleum resources are exploited by the foreign companies. The State is restricted to regulatory and policy role but in case where it participates in oil and gas projects it is restricted to a minority stake. As noted, even in cases where the State’s NOC participates in petroleum projects the NOC holds minority stake and therefore cannot play a dominant role.

This format of managing the country’s important non-renewable assets must change. The petroleum resources are owned by the State and it should rightly take control of its resources. That is why critical changes are needed in the way the nation’s oil and gas resources have been exploited and developed to date. The Government’s vision of taking back PNG makes sense.

Through embarking critical and important changes to policy setting, legislative framework and fiscal regimes, the State’s position will be elevated to taking control of the resources, driving economic growth and development aspiration. Given the current circumstance, the country cannot aspire to develop as a nation. After 45 years of Independence foreigners have dominated and controlled the petroleum industry. The changes proposed by the Government must seek to elevate the role of the State in the decision making and participation, exploitation and development of the hydrocarbon resources. It is time to re-think and re-shape the country’s destiny and the Government must take control of the country’s destiny.

Further, it has to be pointed out here that whilst the Government is driving ”take back PNG” it should also be mindful of the fact that a system is as good as its people. The composition of the Boards and appointment of management team on to SOEs and Government Departments must be merit based and people who put the people’s and the country’s interests above theirs. The Government can make changes to the policies, laws, fiscal systems and processes and structures but it will be the people who will drive these changes. Having the right minded people, zero greed driven and those that aspire to take back PNG must be appointed.


As the country move forward, it will be important to develop the country’s petroleum resources in a way that ensures all citizens benefit from the resources development. Drastic changes will ensure PNG participates directly in the benefits emanating from development of the nation’s oil and gas resources. This can be meaningfully achieved, if the Government is focused on “take back PNG”.


Article by: Roger Kewa Avinaga

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