Duma still stings from being bulled by PNG LNG, exerted his power by standing over IOC and now has industry respect he sought.
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Duma taking PNG further
By Russell Searancke Sydney Australia
03 January 2013 23:59 GMT
William Duma has been Papua New Guinea’s Minister of Petroleum & Energy for six very eventful years, with the exception of a five-week period in 2011 when he was stood down during a period of political chaos.
“Apart from those five weeks of enforced holiday… my commitment has never been divided,” says Duma, an avid follower of rugby union and a music lover.
At the time he was stood down, the then-prime minister Michael Somare was unwell and in hospital overseas. In Somare’s absence, the acting prime minister Sam Abal sacked Duma and several other high-profile ministers.
Then in a flurry of political moves, Duma was reinstated after a new prime minister, Peter O’Neill, was installed.
Somare then recovered and declared he was the rightful prime minister, and so political bedlam prevailed until the August 2012 national election, when O’Neill was returned as prime minister.
O’Neill’s ruling coalition includes Somare plus two more former prime ministers, Julian Chan and Paias Wingti.
Duma was re-elected and re-appointed as Minister of Petroleum & Energy.
Nowadays, Duma and O’Neill speak of their “absolute commitment” to long-term political stability, and the government has taken three big steps to underline this.
The first is a constitutional change that extends from 18 months to 30 months the period after a national election in which a prime minister cannot be removed by a no-confidence motion.
The second step is stamping out corruption, with an initial focus on public office holders and officials.
The third is a commitment to a growing economy and responsible fiscal management.
Re-emergence The petroleum and resources industries form the backbone of the country’s economy and, in fairness to the governments over the years, the fiscal settings have always been considered good.
Still, Papua New Guinea fell off the petroleum industry’s radar in the 1990s, and it was only Asian demand for liquefied natural gas that brought Papua New Guinea back into the fold in the late 2000s. The business is now booming.
Duma became minister at the same time that ExxonMobil and its partners shelved the Papua New Guinea-to-Australia gas pipeline project and focused instead on an LNG project.
The US$19 billion Papua New Guinea LNG project is now 70% complete and an expansion looks very likely. Simultaneously, the Gulf LNG project has taken shape, as has a Talisman Energy-led LNG project. Horizon Oil is developing the Stanley field and companies such as Oil Search, Total and Shell are excited about Papua New Guinea’s exploration potential.
Executives say the boom in activity has happened in spite of, rather than due to, the government’s capabilities, and that ExxonMobil and Oil Search, in particular, deserve huge credit for the Papua New Guinea LNG project.
Duma is a graduate of the University of Sydney Law School with a masters in law, and was a partner specialising in commercial litigation with Blake Dawson Waldron — now known as Ashurst — until elected to parliament representing Mount Hagen in July 2002. As minister, he has proven to be tough and has an inscrutable manner.
Last year he rejected InterOil’s “fragmented” plans for the Gulf LNG project, and insisted that InterOil bring in a world-class LNG partner.
He also locked horns with Horizon Oil, Talisman Energy and Santos over the Elevala-Ketu fields.
The industry has for years criticised the under-performance of the government’s petroleum regulator — the Department of Petroleum & Energy (DPE).
In return, Duma has accused the industry of “poaching our best employees” from his department thereby “putting us under great pressure” in supporting the industry “within limited timeframes”.
Swipe He also took a swipe at the industry association the Chamber of Mines & Petroleum for “publishing negative criticisms” instead of “taking the time to visit my department and discuss issues of concern”.
Duma has now acknowledged the industry’s recommendation that the DPE should be converted to a statutory authority, and ministerial approval will enable the replacement of the DPE with the Petroleum & Energy Authority in 2013.
The industry is pleased, and sources say there are a number of former department staff who are interested in working for the new authority.
Duma says Papua New Guinea has proven itself capable of providing the capacity and support needed to host large resources projects.
“Let’s put it this way, Papua New Guinea has on balance met the needs of a world-class petroleum industry,” says the married father of two sons.
The petroleum fiscal regime is being reviewed, although the Prime Minister said last month he could not promise “massive cuts in taxes and charges”.
Papua New Guinea’s unforgiving geography, its weather, and its complex social and cultural characteristics make it a tricky country to operate in.
Duma says the most critical problem to fix is the distribution of benefits and funds to the petroleum project communities.
The industry sees this as the key factor in retaining its social licence to operate and in ensuring that petroleum projects benefit the country for the long term.
“Papua New Guinea will soon become a member of the exclusive club of LNG producing countries. All of us, the government, the LNG project partners, the industry, and landowners must be proud of this achievement,” says Duma.
