New petroleum firm to be set up, says Prime Minister

PRIME Minister Sir Michael Somare announced yesterday that a new national petroleum company will be established to manage the state’s interest in the oil and gas industry, The National reports.

He made the announcement at the 11th PNG Mining and Petroleum Investment conference at the Hilton Hotel in Sydney, Australia.

Sir Michael did not give details of the new petroleum company but said his government would review, rationalise and reform the state’s mining and petroleum interest participation that would form the basis for the new petroleum company.

Treasurer Peter O’Neill later reaffirmed Sir Michael’s announcement at a press conference.

He said the government had undertaken the initiative to park the state’s interest in a single entity.

The announcement was among new initiatives that the government had undertaken to make PNG’s investment environment conducive for investors and tap into the revenues generated by the vast petroleum industry in the country. 

Delivering his keynote address, Sir Michael told investors that his government had made the investment environment conducive by providing the necessary policy legislation for investors.

He said in early 2003, his government passed legislation to make investment in the country’s resources sector more attractive. In that year alone, spending of mineral exploration doubled in value to around K60 million well before the China factor caused an upsurge in commodity prices.

“My government will ensure Papua New Guinea’s competitive edge will be strengthened and maintained,” the prime minister said.

“To do this, the government, with consultative input from the industry, will immediately pursue a key number of initiatives.

“The government will continue to provide a stable environment in the form of political and policy stability and remain committed to a petroleum and mining regime where rules are widely known, fair and transparent and understandable.

“The government will ensure licence holders do not sit on licences but fast track development on our resources and review, rationalise and reform the department of petroleum and energy.”

Sir Michael said part of the review would involve setting up a petroleum resources authority with similar roles and functions as the Mineral Resources Authority.

The prime minister said the policy reviews were in line with the government’s Vision 2050 and its development strategic plan.

He admitted that the economy looked gloomy before his government took office but things had changed over the past eight years, resulting in an unprecedented consistent economic growth.

He said under his government’s tenure, the most notable achievement was the delivery of the K45 billion PNG liquefied natural gas project.

He was optimistic that revenue from the LNG project would transform the nation’s economy and improve the living standards of its people.

“Revenues from LNG, as I have explained, will underwrite many of our social and economic programmes over the next three decades.”

The prime minister urged potential investors to make Papua New Guinea their next investment destination.