Page 11 - AsianOil Week 28

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Petroleum Minister Kerenga Kua Caption has been a vocal critic of the Papua LNG gas agreement. Image: Loop PNG
Minister Kerenga Kua has sought to allay some of those concerns. In an interview with the Australian Financial Review on July 8, Kua said the inquiry would be established this month. Kua, a vocal critic of the govern- ment’s gas agreement for the proposed 5.4mn tonne per year (tpy) Papua LNG project, was appointed to his position on June 6.
Oil Search noted the launch of the inquiry, saying that it “was not involved in, or a party to, the UBS loan, and no allegations have been made against Oil Search or Oil Search o cers, [but] we welcome the inquiry”.
Expansion plans
Against a background of political and finan- cial friction, Oil Search and its partners are working towards a final investment decision (FID) on Papua LNG, targeted for 2020. The government signed the gas agreement for the proposed two-train development in April with Oil Search, Total and state-owned Kumul Petroleum.
Adding further pressure to plans has been an escalation in tribal violence in the Hela province, which holds a number of gas elds. Reports this month have noted at least 24 deaths. Marape represents a part of Hela and has warned that he would use the “strongest measures” allowed by law to tackle the violence. He has promised to
increase security through the provision of addi- tional forces.
At the same time, however, the government is working towards completing its review of the April gas agreement, with Kua saying it should be wrapped up before the end of this month. e review will ascertain whether the agreement was legal and whether it “maximised” the state’s potential revenue, the minister told the Austral- ian nancial daily. He added that once the review was over, the government would examine the “entire legislative framework” for the mining and petroleum sector.
Oil Search, in its recent quarterly report, noted PNG’s “excellent track record of scal sta- bility, o ering a predictable operating environ- ment which has brought signi cant investment intotheresourcesector”.InJune,companyCEO Peter Botten spoke more bluntly, saying the new deal for Papua LNG would be in line with the PNG LNG project.
Marape’s comments at Oil Search’s birthday party couple with Kua’s statements to the Aus- tralian press do suggest a tougher line from Port Moresby on the plans, which may hold up the new project. While PNG has every right to do so, the LNG investment cycle is likely to dip a er 2020 making new construction projects less likely. Pressure is on both sides to reach an accommodation.™
Week 28 17•July•2019 w w w . N E W S B A S E . c o m P11