Kerenga Kua, Minister for Petroleum

‘The Government is cognizant of the Total Letter not being a legal document or instrument. Nevertheless, the Total Letter does set out the extent to which Total E&P Ltd and its Project Partners are prepared to go in accommodating the State’s position on the items of concern. This is seen as a gesture that is made in good faith and, to which, the Government and the State must respond in good faith.’
— Kerenga Kua, Minister for Petroleum

So, the Papua LNG project has been given the all-clear by Minister for Petroleum, Kerenga Kua. The debate about who ‘buckled’ and who kept their nerve will take place, no doubt, but the end of the government’s review into the gas agreement signed in April is to be welcomed.

While the partners in the P’nyang gas project would also like to see that project approved in the wake of Papua LNG, the process of going into Front End Engineering and Design on Papua LNG can now commence.

Assuming this leads to a final investment decision, our Finance Editor David James considers the likely financial impact on PNG here.

The PNG Government’s ability to perform its roles effectively has the potential to affect many other sectors of PNG’s economy too, as delegates to the 2019 Business Advantage Papua New Guinea Investment Conference learned last month.

Here are just a few examples:

• State-owned enterprises. If ever there was a litmus test that would prove PNG’s state-owned enterprises were back on track, it would be a successful turnaround of PNG Power. Last week, Acting Managing Director Carolyn Blacklock resigned just days after addressing the conference. She was PNG Power’s 10th leader since 2002. We must wait to see if her planned reforms continue.
• Special Economic Zones and foreign investment laws. Commerce Minister Wera Mori outlined the government’s agenda for a revised foreign investment laws, and a likely Special Economic Zones Act before the end of this year.
• Mining and petroleum. Two of PNG’s most experienced and respected resource executives, Ok Tedi Mining’s Peter Graham and Oil Search’s Gerea Aopi, discussed here the challenges facing the sector, including the proposed new Mining Act.
• Aviation. It’s worth noting that the situation with PNG’s state-owned enterprises is not uniformly negative. Alan Milne, the Managing Director of Air Niugini, spoke of the Higher Altitudes program he has put in place to foster innovation at the national airline. The program has already seen the airline return to profitability this year.
• Roads. PNG has a new National Road Network Strategy, as Department of Works Secretary David Wereh outlined to delegates. We’re used to hearing how little PNG spends on maintaining its roads but the release of a 20-year plan is good news on this front.
• Telecommunications infrastructure. We’re all excited about PNG’s new domestic and international fibreoptic cables, but pricing will be a key factor in determining just how much this important new infrastructure benefits business. Sundar Ramamurthy, former CEO for Bmobile Vodafone, argued strongly for the government not to treat the cables as a cash cow.
• Capital markets. PNGX, the new name for the Port Moresby Stock Exchange, is eagerly awaiting a newly constituted and independent Securities Commission, as flagged by Wera Mori in his conversation with me at the conference.
• Financial services. According to KPMG Managing Partner Zanie Theron, the Accountants’ Registration Board has not met to register or accredit any new accountants, auditors or liquidators in the past four years.

As if that wasn’t enough of a shopping list for government, the ANU’s Stephen Howes has his own list of things the government should be doing to grow the economy.

Our experienced journalists will be reporting on all the above in coming weeks. Stay tuned!

Andrew Wilkins in Publishing Director of Business Advantage International