Particular areas in the laws on resources projects should guarantee that the State, investors and the people benefit, said Petroleum Minister Kerengua Kua.
According to Kua, the laws need to be reformed so that the government should not have to borrow to finance commercial projects. He mentioned that previously the state had given 100 per cent ownership to developers when it signed a project agreement, forfeiting its ownership. As a result, he is ready to see some changes in these laws, particularly in the fields of:
Rising debt level
Losing ownership rights without any compensation
Having more revenues for the people
“We want to reform the structure of mining and petroleum laws that underpin how the business is conducted and how we all can benefit out of it – the investors, people and the government,” Kua said. “Investors are more concerned about their rate of return. If they put in K1 billion, they want their profit to be better than over investment destinations. If they were to put money into PNG, we must give them confidence.”
He continued, “So if we are to sell their resource, we have to give them a bigger benefit. We have to extend consultations to the investors and the people. Every time there is a mining or petroleum project when you sign a development agreement you forfeit the ownership of that resource. We need to remove borrowing to finance commercial projects in mining and petroleum. State ownership in minerals and petroleum will remain all the way to the point of sale. We will not transfer ownership on the signing of a gas agreement and mining development contract. All costs for the project must be financed by the project.”
