Tuesday, January 27, 2015

Western Province must demand a standalone LNG Project

 

Sunrise above the Star MountainsAbove: Sunrise above the cloud covered Star Mountains where P’ynyang is located

As someone from Western Province, I was absolutely disgusted to learn that the P’ynyang Gas field in the Star Mountains has been slated into the existing PNG LNG project. What’s worse is the fact that the lame Parliamentarians from Western Province haven’t raised a single protest against the move.

In 2013, I attended a press conference where Gulf Governor Havila Kavo rallied Kikori and Kerema MPs to stand by his side to block moves by InterOil to court Exxon. The MPs were concerned that InterOil’s Elk-Antelope project would either be integrated into the PNG LNG project or would be a floating LNG project. The politicians were adamant that Gulf Province had a standalone LNG Project.

Fast forward to 2015 and with the plummeting oil and gas prices, Exxon and the State have made some very irritating announcements in the New Year. (Some analysts believe prices will remain low over the medium term)

Oil Search (Exxon’s partner in the PNGLNG Project) is hoping to convert its Petroleum Retention Licence (PRL 3) over P’nyang into a Petroleum Development Licence. In doing so Oil Search hopes P’nyang will provide gas for a third train (3rd processing facility) of the PNG LNG Project (there are currently two trains).

I’ve been observing from the sidelines hoping to hear a squeak from my MPs but the silence has been deafening.

Back in 2013 when I asked Mr Kavo why he was opposed to anything but a standalone Gulf LNG Project, Kavo told me that a standalone project would create jobs for Gulf people and contribute to infrastructure development in the Province.

Western Province MPs should be screaming their heads off for a standalone LNG Project in the Province. The fact that P’nyang alone is capable of supplying one train means that Western Province is past the half way mark in terms of providing the gas reserves needed to justify a standalone project (If we use the two-train PNGLNG project as our yardstick).

Right now, many of the small players in the province are keen on selling out given the downturn in the resource sector. Talisman, the developers of the Stanley Gas Project have been bought off by Spanish interests.

Western MPs need to be working towards consolidating Western Province’s gas assets and attracting major oil and gas players to acquire these resources. This shouldn’t be something new to Governor Wobiro, since he would probably be familiar with similar efforts undertaken by the PNG Sustainable Development Program (PNGSDP) to consolidate the province’s gas resources.

The benefits of a standalone gas project in terms of jobs, training opportunities, business activities and infrastructure development would be immensely beneficial to the people of Western Province. These opportunities for the people of Western Province will be lost should gas from P’nyang simply be siphoned off to the PNG LNG Project.

To add salt to injury, I was sickened to learn that Exxon Mobil had signed a gas for electricity MOA with the state. Back in 2013, when supporting Governor Kavo, Kikori MP Mark Maipakai railed against Exxon Mobil for giving PNG a raw deal in the PNG LNG Project.

What Maipakai was referring to then, is supported by the fact that the Government has to sign another MOA with Exxon to supply electricity to Port Moresby. Exxon hates PNG but loves our gas that is why in the original PNGLNG Gas Agreement, Exxon didn’t want any clause for Domestic Market Obligations. Maipakai called the Gas Agreement a bad deal because the agreement doesn’t obligate Exxon to supply gas locally either for electricity or the creation of a local petrochemical industry.

In other words Exxon Mobil never wanted some black people in the city of Port Moresby to have access to cheap gas so they never wanted that to be included in the original PNGLNG Gas Agreement. That is why the Government needs a new agreement with this greedy monster in order to improve electricity supply to Port Moresby.

Since much of the Gas slated for the current PNGLNG trains has been sold on forward contracts, Exxon Mobil would have to cover up for its greed by sourcing extra gas to meet the requirements of the gas for power MOA.

Enter the P’ynang Gas Field owned by Oil Search.

By tying up the government in the Power Deal, Exxon Mobil hopes to skip away from a Standalone LNG Project in the Western Province.

Anyone who has lived in Lae, Tari, Angore, Hides, Omati and Port Moresby during the PNG LNG construction phase knows about the economic opportunities associated with the construction phase of a standalone LNG project.

The people of Western Province would be stupid to let their gas be siphoned elsewhere instead of being processed in the province and providing the economic benefits associated with a standalone gas project

In signing up to the gas to power MOA with Exxon Mobil, the State is forfeiting potential economic benefits that could transform Western Province. This is in direct contradiction of the spirit of PNG’s Constitution with regards to the Second National Goal and Directive Principle - Equality and Participation. A standalone LNG Project in the Western Province enables equitable participation by the People of Western Province in the development of the Oil and Gas industry in PNG. Siphoning P’ynang gas into the PNG LNG project promotes economic marginalisation of the People of Western Province whilst increasingly centralising economic activity in Port Moresby.

Yes, Port Moresby needs electricity. But P’nyang should not be used to cover up for Exxon Mobil corporate greed. Parts of the PNG LNG Gas Agreement need to be revisited to allow gas from the two trains to be used to power up the city.

The People of Western province deserve to enjoy the full economic benefits of the exploitation of their natural gas resources rather than being hoodwinked by greedy multi-national corporations.

PNG profiting from human misery on Manus

Abott meets emerging PNG LeadersIs Manus a question of how much rent we can collect on the sale of our sovereignty?

The legitimacy of what is happening on Manus Island hasn’t brought up the political, legal, moral, and religious debates that it deserves. What is certain though is that PNG is profiting from the exploitation of human beings. Fellow human beings are being held against their will so that this nation can collect rent from Australia.

We may not have a history of slavery but our people have been Black Birded and kept against their will to make profit for the sugar plantation owners in Queensland. The only way I can describe what is happening on Manus is that it is like a rape victim helping the rapist to rape other people and getting pleasure out it.

As black people with the collective experience of exploitation of blacks, we ought to be moral beacons of emancipation of humanity just like Mandela and Martin Luther King Jnr. Instead we collude with our oppressors to oppress others.

So how much have we made from these poor souls?

According to the Australian High Commission website, around 827 Manusians are employed at the detention centre at Lombrum and a further 120 work on construction jobs related to the detention centre deal. 25 businesses on Manus benefit from K1.2 million in purchases made each week by the detention centre.

Australia will be spending A$ 513 million to upgrade immigration related infrastructure in PNG. In addition, Manus Island will receive A$ 37 million in direct aid from the Australian government.

The Australian government will also be providing additional A$ 420 million in aid for the redevelopment of Lae ANGAU Hospital, deployment of Australian Federal Police, rehabilitation of infrastructure at the University of PNG and scoping and design work for the Lower Courts complex in Port Moresby and Madang – Ramu highway.

Papua New Guinea is promised over a billion Australian dollars in goodies in exchange for keeping fellow humans in unlawful detention against their will.

Papua New Guinea’s unlawful detention of people who never committed a crime on PNG soil at the first instance, can be viewed as kidnapping for ransom. However this sort of state sponsored kidnapping is aimed at making money from Australia.

Friday, January 23, 2015

International tribunal restrains Govt from interfering with PNGSDP

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Above: PNGSDP Chairman Sir Mekere Morauta addresses stakeholders in Port Moresby

The International Centre for Settlement of Investment Disputes(ICSID) has ordered that the government of PNG refrain from interfering with the management of Papua New Guinea Sustainable Development Program (PNGSDP) and from transferring shares in Ok Tedi to the people of Western Province. The ruling was made on the 21st of January 2015 after PNGSDP sought provisional orders from the ICISD Tribunal on the 14th of July 2014.

In September 2013, the national government expropriated the Ok Tedi mine after it passed the Ok Tedi Tenth Supplementary Agreement. Section 4 of the Act referred to the cancelation of all PNGSDP shares in Ok Tedi Mining Ltd (OTML) and stated that 122, 200, 000 “new, fully paid ordinary shares in the share capital of OTML free of any encumbrance, charge or equitable interest shall be issued to the State.”

In response, PNGSDP filed for arbitration at the Washington based ICSID in October 2013, claiming that the enactment of the Tenth Supplemental Act amounts to a breach of applicable prohibitions against unlawful expropriation of the PNGSDP’s property.

However subsequent to the filing of the arbitration, PNGSDP requested provisional measures to (1) prevent the state from interfering with its management and operations (2) refrain the state from harassing PNGSDP employees or agents, and (3) refrain the state from taking any steps that may disturb the status quo.

In response to PNGSDP’s first request, the Tribunal formed the opinion that “an order of provisional relief directed at interference with or changes to the Claimant’s management is necessary in order to prevent this harm from occurring during the pendency of these proceedings.”

It therefore granted the relief sought by PNGSDP and ordered that “for the duration of these arbitration proceedings, the [State] refrain from taking any further steps under Section 6 of the Tenth Supplemental Act, or otherwise interfering with [PNGSDP’s] management. In particular, the [State] should refrain from taking any measures purporting to restructure or otherwise alter the management of [PNGSDP]”

The tribunal rejected the second request on the basis of lack of evidence provided by PNGSDP that the state was intimidating or harassing PNGSDP staff and agents. It also reject most of the third request except for the request that the status quo on the ownership of Ok Tedi be maintained.

The tribunal found that “the imminent disposal of 33% of shares in OTML for the benefit of the People of the Western Province, including recent press articles reporting that this sale is about to materialize, is sufficient evidence of imminent harm.”

It therefore ordered that for the duration of the tribunal, the state “refrain from transferring or issuing (or completing the transfer or issue of) any OTML shares to any third party, or taking any steps that otherwise change the ownership of OTML.”

PNGSDP is an independent trust company registered in Singapore. It manages a US $1.4 billion Long Term Fund which is to be drawn down solely for the benefit of the people of Western Province following the closure of the Ok Tedi mine.

By the end of 2012, PNGSDP had received a net $US1.8 billion in dividends from OTML after payment of $US200 million in Dividend Withholding Tax.  PNGSDP has committed over K1.18 billion to 662 projects and programs throughout PNG and Western Province, since it began operating in 2002.