Oil Search’s Peter Botten

‘I have seen eight prime ministers over the 26 years I have been here. And the recent political changes that we have seen are really nothing particularly new to investments in PNG.

‘The discussions and debate going on right now are nothing new. I think we have to put that in context.’

—Peter Botten, CEO, Oil Search Ltd

Papua New Guinea’s new government, led by a Prime Minister who likes meetings to start on time, is starting to reveal its agenda.

In the weeks since the Marape-Steven Government has taken the reins, it has moved to address frustration about the pace of development in a country with so much potential.

New ministerial appointments have seen quite a few portfolios change hands, sometimes to surprise candidates (such as the Police portfolio going to anti-corruption campaigner, Bryan Kramer) although, notably, the Mining, National Planning and Commerce portfolios have not moved.

New Treasurer Sam Basil has wasted no time in providing an update on government finances, which shows revenues are lower than expected. The Treasurer notes the government needs to improve its tax collection methods, and better control expenditure.

Meanwhile, new Petroleum Minister Kerenga Kua has announced a ‘review’ of the Papua LNG project agreement.

While the Prime Minister has clarified the review is to be a short-term one (to ensure the agreement—executed by the previous government—complies with the laws of PNG), there’s undoubtedly concern in the resources industry. This concern will only be allayed once the review is complete and France’s Total can proceed with the FEED stage of the project.

Similarly, there is a desire in the industry to understand how political rhetoric about improving the share of future resources projects might affect the progress of the P’nyang gas project and the Wafi-Golpu copper-gold mine.

Meanwhile, PNG’s foreign investment laws have been under review and we understand a revised draft of the Investment Promotion Authority Act has been prepared for consideration by the National Executive Council, PNG’s cabinet. This new draft addresses many of the concerns expressed by business back in February when plans were announced for a Foreign Investment Regulatory Authority Bill, since rescinded.

The Business Council of PNG took an early opportunity to engage with the new government last month at the 2nd Speaker’s Investment Conference. Encouragingly, the new PM certainly listened courteously to what he was told.

Also on the PM’s mind is the performance of PNG’s state-owned enterprises.

‘Dividend payments from our state-owned enterprises are very low, often paid late if at all, and appear to be discretionary and the performances of most of our public entities continue to be poor,’ the Treasurer said this week.

Air Niugini, PNG Power and Kumul Telikom are being pulled out of the Kumul Consolidated Holdings structure, and will report directly to ministers.

Given the PM’s stated admiration for the performance of Bank South Pacific, in which the government holds only a minority shareholding, is it possible we will see partial privatisation of SOEs back on the agenda?

It’s certainly been a big month, which Oil Search’s Peter Botten tried hard to put in context at last week’s Australia-PNG Business Forum.

‘We are very confident that we can work our way through this and work towards a sensible solution for all,’ he said, in an apparent appeal for calm.

As Heraclitus noted some 500 years before the birth of Christ, nothing is certain but change.

There’s a business adage to match: out of change comes opportunity.