Wantok... many ways to skin a cat

[Petrovale]

Ready to rumble over Elk-Antelope

Wednesday, 14 August 2013 WITH ExxonMobil likely to have decided the nature of its proposed deal to buy 4.6 trillion cubic feet of gas from InterOil's Elk and Antelope fields, Papua New Guinean politicians are removing their gloves for a forthcoming “stoush”. By Wantok In PNG politics, as in politics elsewhere, what you see may not be what you get – as both Australian Prime Minister Kevin Rudd and Opposition Leader Tony Abbott are trying to convince voters in the lead-up to Australia's September 7 federal election. The shades of grey come in for much less scrutiny in PNG but there is enough media coverage to indicate how battle lines are being drawn. In one corner is PNG Prime Minister Peter O'Neill, who may be aware he needs to slip on some gloves. In the other, seemingly punching above his weight, is the formidable Petroleum and Energy Minister William Duma, who is well into his warm up routines. From the perspective of national government budgets O'Neill can be viewed as the biggest spender of all time with a looming 2013 deficit – larger than the total budgets since independence until the early years of the last decade. The record spending is meant to grease the wheels of development and progress although the jury is still out on whether it is happening on a scale that matches expenditure. Big spending is generally regarded as a way to win public support, even in a difficult fiscal environment, with both Rudd and Abbott showing the way in their electoral battle. After a decade of exceptionally good economic growth, aided by sound fiscal policies, O'Neill is well aware of the current economic slowdown. Despite the coming boost from LNG exports next year, the nation may soon need further stimulus through a third LNG train outside Port Moresby. During its construction, the PNG LNG project generated unprecedented levels of employment. Most will be demobilised by the time LNG exports start – so early commitment to a third LNG train, fed by Elk and Antelope, is clearly a welcome prize. Duma’s recent broadcasts on this matter were to possibly stall or stymie an ExxonMobil deal with InterOil, as he co-opted Gulf Governor Havila Kavo and another high profile Gulf MP, Labour and Employment Minister Mark Makapai, into his corner. Duma has proclaimed that any deal signed by InterOil must meet the 2009 project agreement signed with the national government at a time when the legitimacy of its gas reserve base was questionable. In a ceremony with the Gulf governor, in whose province Elk and Antelope reside, the provincial government is supporting Duma with plans to pass legislation to require any gas processing facility to set up its plant in Gulf Province. The shades of grey here camouflage where and when the knockout punch may be delivered. What Duma must be fully aware of – but has not quite advised his Gulf ally – is that the 2009 agreement with InterOil does not include any requirement that gas processing has to take place in Gulf. Indeed, it was premised on an InterOil expectation at the time that the gas would be piped to Port Moresby for conversion to LNG, possibly alongside its Napa Napa crude oil refinery. Duma may be counting on lapsed memories of the questionable 2009 agreement because it is not clear if O'Neill recalls these details either. These are really a sideshow, like an elaborate shadow play, to the real issues at stake. In essence the question has to be raised: "How will the national interest best be served?" A subset, which Duma and Kavo are hanging their political fortunes on, is how the best outcomes can be ensured for the much neglected Gulf Province. Kavo, like most or possibly all Gulf governors before him, has to share some of the blame for the derelict state of their province and the lack of services even in the provincial capital Kerema. Having seen the tremendous socioeconomic impacts ExxonMobil has brought to the footprint areas for its PNG LNG project it is a fair call that location of an LNG plant within Gulf could help rectify some of the inadequacies and neglect of the past. Even though such a move could generate local employment on an unprecedented scale, there are many ways to skin a cat. Some suitable number crunching would almost certainly show that a third LNG train near Port Moresby is also capable of delivering the best outcome for Gulf Province. Wantok will not elaborate why this may be, although many column readers could easily work out the best-case scenarios. But both O'Neill and Duma are well aware Gulf will remain a backwater as long as provincial leaders expend their energies in the national capital to the detriment of their home provinces.

[jft310]

Ready to rumble over Elk-Antelope

Wednesday, 14 August 2013 WITH ExxonMobil likely to have decided the nature of its proposed deal to buy 4.6 trillion cubic feet of gas from InterOil's Elk and Antelope fields, Papua New Guinean politicians are removing their gloves for a forthcoming “stoush”. By Wantok In PNG politics, as in politics elsewhere, what you see may not be what you get – as both Australian Prime Minister Kevin Rudd and Opposition Leader Tony Abbott are trying to convince voters in the lead-up to Australia's September 7 federal election. The shades of grey come in for much less scrutiny in PNG but there is enough media coverage to indicate how battle lines are being drawn. In one corner is PNG Prime Minister Peter O'Neill, who may be aware he needs to slip on some gloves. In the other, seemingly punching above his weight, is the formidable Petroleum and Energy Minister William Duma, who is well into his warm up routines. From the perspective of national government budgets O'Neill can be viewed as the biggest spender of all time with a looming 2013 deficit – larger than the total budgets since independence until the early years of the last decade. The record spending is meant to grease the wheels of development and progress although the jury is still out on whether it is happening on a scale that matches expenditure. Big spending is generally regarded as a way to win public support, even in a difficult fiscal environment, with both Rudd and Abbott showing the way in their electoral battle. After a decade of exceptionally good economic growth, aided by sound fiscal policies, O'Neill is well aware of the current economic slowdown. Despite the coming boost from LNG exports next year, the nation may soon need further stimulus through a third LNG train outside Port Moresby. During its construction, the PNG LNG project generated unprecedented levels of employment. Most will be demobilised by the time LNG exports start – so early commitment to a third LNG train, fed by Elk and Antelope, is clearly a welcome prize. Duma’s recent broadcasts on this matter were to possibly stall or stymie an ExxonMobil deal with InterOil, as he co-opted Gulf Governor Havila Kavo and another high profile Gulf MP, Labour and Employment Minister Mark Makapai, into his corner. Duma has proclaimed that any deal signed by InterOil must meet the 2009 project agreement signed with the national government at a time when the legitimacy of its gas reserve base was questionable. In a ceremony with the Gulf governor, in whose province Elk and Antelope reside, the provincial government is supporting Duma with plans to pass legislation to require any gas processing facility to set up its plant in Gulf Province. The shades of grey here camouflage where and when the knockout punch may be delivered. What Duma must be fully aware of – but has not quite advised his Gulf ally – is that the 2009 agreement with InterOil does not include any requirement that gas processing has to take place in Gulf. Indeed, it was premised on an InterOil expectation at the time that the gas would be piped to Port Moresby for conversion to LNG, possibly alongside its Napa Napa crude oil refinery. Duma may be counting on lapsed memories of the questionable 2009 agreement because it is not clear if O'Neill recalls these details either. These are really a sideshow, like an elaborate shadow play, to the real issues at stake. In essence the question has to be raised: "How will the national interest best be served?" A subset, which Duma and Kavo are hanging their political fortunes on, is how the best outcomes can be ensured for the much neglected Gulf Province. Kavo, like most or possibly all Gulf governors before him, has to share some of the blame for the derelict state of their province and the lack of services even in the provincial capital Kerema. Having seen the tremendous socioeconomic impacts ExxonMobil has brought to the footprint areas for its PNG LNG project it is a fair call that location of an LNG plant within Gulf could help rectify some of the inadequacies and neglect of the past. Even though such a move could generate local employment on an unprecedented scale, there are many ways to skin a cat. Some suitable number crunching would almost certainly show that a third LNG train near Port Moresby is also capable of delivering the best outcome for Gulf Province. Wantok will not elaborate why this may be, although many column readers could easily work out the best-case scenarios. But both O'Neill and Duma are well aware Gulf will remain a backwater as long as provincial leaders expend their energies in the national capital to the detriment of their home provinces.

thanks for this , the newspaper seems to think they have a deal

[Palm]

And that Duma is a cat that could get skinned.

[ArtM72]

Nice to see somebody in PNG remembers the 2009 deal and recognizes publicly that great benefit can come to Gulf with third train at PNG LNG. I would suggest more benefit as it would provide them staged development as opposed to explosive. For a town like Kerema, which until just a few years ago had its fuel brought in by small boats with outboard motors, even well, pipeline and CSP work is likely to be cultural overload.