PNG landowners seek empowerment in LNG project

Transcript

RAYMOND KUAI: Kumul Petroleum Holdings Ltd is not a party to the UBSA. And so its knowledge and its interpretation of the UBSA would be limited, because it does not have the institutional memory of what was actually agreed in Kokopo (where the UBSA was signed in 2009). So what we are saying is, when we say this whole of the state thing, they have been complacent about this issue. It is the responsibility of the Department of Petroleum and Energy to ensure that the social mapping and the landowner studies are conducted; profile landowners are identified, for them to receive benefits such as royalties, equities, development levies for provincial governments and LLGs (local level governments) so the Department of Petroleum and Energy is incompetent, it is under-resourced, it's ineffective. Then you have Kumul Petroleum Holdings Ltd who is acting like a state entity, regulating the whole industry. Its managing director is making comments that he's not supposed to be making comments on. Kumul Petroleum Holdings Ltd is just a management company of the asset that the state owns. So now the petition is asking the government or the state to negotiate with us.

JOHNNY BLADES: is it fair to say that landowners and the five provincial governments had expected to have been paid out more by this point, and to have participated more directly in the project's operations by now, now that it's two and a half years into exports?

RK: We should be, we should be. Because one of the things that we're asking in the petition as you read is due diligence to be conducted. Now if we acquire the 4.27% we need to know what exactly is the value of that at the moment. Without landowners and provincial governments, through their consultants, both in country and overseas, without them conducting due diligence, then we can't know exactly the value of that. That number one issue we have. And going back to the question you asked. We want direct participation in the PNG LNG Project, that is the essence of the UBSA.

JB: What's an example of direct participation?

RK: We will be owners of the 4.27% in the LNG Project - it's a direct equity. We're not going to be a mere rent collector, like royalties. The 4.27%, once purchased, gives us direct ownership of that much interest in the LNG project. We're not just interested in the cash benefits. Being a direct owner of the project gives us the ability to own part of the plant, part of the pipeline. We would become part owners of that. So it's more than just cash benefits we're talking about here. It involves us to sit at the owners committee meeting, it involves us to make our own decisions on the investments on... the returns of this interest in the PNG LNG project. It's not just about directly owning. We just want to manage it ourselves, because we know that over time the state has been complicit and complacent and they have a track record of mismanagement.