The Post Courier (29/8/11) reports ...
The PETRONAS Business Model is structured with the maximum participation of Government, landowners, and Provincial Governments, in all segment of the LNG Project. They retain the majority ownership of the complete chain.
The PNG LNG Project Business Model is based on existing business, models for oil and mineral development in PNG.
Under this model, the State, Provincial Governments and landowners are to participate ONLY at the UPSTREAM, by exercising their 22.5 percent rights under the Oil and Gas legislation. Other than that they have no participation or interests in other segments of the Project. Under the current Business Model, the State and the landowners are complete bystanders, with no tangible control and ownership in the Project. This Business Model defeats original Government policy ambition as well as political and economic aspirations of PNG.
The ultimate benefactors of the PNG LNG Project are the developers. PNG as a country will receive peanuts for its resources. As a result, the LNG project will not underpin the economic advancement of PNG.
Almost 80 percent of direct revenue from the project will flow out of PNG. As a result less employment and income opportunities will be created for PNG citizens.
The Project is the single largest investment undertaking in PNG and the expected internal rate of return (IRR) is between 16-18 percent. This is a commercially viable project and with such expected IRR, no developer and financier would be mad or crazy not to be involved.
The developers fully understand the commercial dynamics of the project and it is in their interests to attain maximum benefit. The Business Model they have developed does quarantine their financial interests. The former NA Government’s decision to reject the Business Model recommended by the Technical Team was not in the best interest of the majority PNG citizens.
Serious questions are arising now as more and more people, particularly landowners and resources owners are made aware of this. As it is, very little is known about this and when the whole country learns about it the government can expect demands for full explanation.
No doubt, with current disagreements coupled by landowner related issues and concerns as well as hired workers’ in the various aspects of the Project, people will be demanding a review of the whole agreement and related provisions,
What is the rationale, if not economic and business for the Government to throw out a better Business plan that was recommended by the Technical Team, which is made up trained and professional personnel who saw greater benefits to the majority of PNG citizens in financial, economic and other benefits.
Why did the Ministerial Committee reject it outright? Why did the NEC completely disregard the PETRONAS concept when the benefits would have been much, much greater than what had been adopted. Whose interest was the former Ministerial Committee representing? The former Kitchen Cabinet knew very well that the PETRONAS option was the best for PNG and it over six million citizens.
It is gross negligence on the part of the former Prime Minister, the NEC Members to deny the PNG citizens what they would have benefited and greater opportunities provided for in the PETRONAS concept of the LNG Project.
Former members in the Somare regime might well have been subject to political bullying from the then cabinet in the whole PNG LNG Project. Immediate consequences, the landowners, people in the resource areas, pipeline routes and processing facility in Southern Highlands, Gulf, Western and Central province as well as other PNG citizens are going to miss out greatly on opportunities.
Hundreds of thousands of PNG citizens will miss out only because of the greed of few individuals and stupidity of others who have succumbed to political bullies.
While political bullying was the order of the day in the last NEC, the nation cannot be expected to be proud of its decision on the PNG LNG Project. As long as political bullying continued there was no consensus and no democracy at NEC level. True political democracy should mean elected leaders, in this case the former NEC Members to do the best they could to protect public discourse.
Has the former NEC Chairman and “Founding Father” forgotten the Fourth Point in the National Goals and Directive Principles - To decide and protect the resources for the wellbeing of this and future generations?”
If few individuals in Cabinet have hijacked the whole PNG LNG Project, they should be held responsible and made to account for their actions or inactions.
The new O’Neil-Namah Government should consider a high-level probe and appropriate action is warranted. Leaders have been vested with insurmountable powers to protect and promote the wishes and aspirations of the majority their represent and not their own greed and selfishness.
Apart from being political geniuses, those who volunteer to serve the people must possess high and appropriate moral values to participate meaningfully and honestly in the too important decisions that are vital for the good of PNG and well being of its citizens.
Despite the former NA-Government’s fanfare and much hype of the multi-billion kina PNG LNG Project, there are a number of underlying issues that needs to be addressed and remedial measures taken in the early stages of the project before it is too late.