There is no doubt a power struggle going on within factions of PNG over the very valuable O&G projects. Duma has been aligned with Petromin and it's obvious that O'Neill-Dion and the National Government as a whole sees Petromin is not functioning well and has no capital. NPCP has entities within it which are functioning and a pretty healthy balance sheet. The National Government has recently deemed NPCP as THE entity for O&G interests going forward. 2 recent articles show the allegience Duma has to Petromin and the feelings of most of the rest of the National government:
Duma defends Petromin on March 1:
"Duma highlights creation, role of National Petroleum Company of PNG
THE Minister for Petroleum and Energy William Duma has congratulated the newly appointed members of the Board of Directors of National Petroleum Company of PNG (NPCP) for their recent appointment.
Minister Duma said he has no doubt that the appointees have the credentials and the credibility to serve as Directors and made special mention of Chairman Frank Kramer, and Directors Larry Andagali and CEO Wapu Sonk who have many years of experience in the oil and gas sector in PNG, and said that they bring special qualities to NPCP.
In congratulating the Directors of the Board, Minister Duma confirmed that the NPCP was specifically created by an NEC Policy Decision to hold the State’s equity in the PNG LNG project through Kroton2. Mr Duma said, however, that the policy on State equity participation in mining and petroleum assets that created Petromin PNG Holdings Limited (Petromin) in 2007 has not been changed.
He said Petromin was established pursuant to the recommendations of a Policy Review on Treatment of State Equity in Mining and Petroleum Projects, conducted by an Independent Advisory Committee of PNG Eminent Persons comprising Messrs Mel Togolo, Greg Anderson, Mick McWalter, Dr IIa Temu and Dr Lawrence Kalinoe. The policy review was completed in 2005 and presented to the Ministerial Committee on Economic Management with recommendations that include amongst other things –
n The Committee recommends that Petromin be established by law and be given a very well defined mandate.
n That mandate should be to receive and hold for the State the mining and petroleum equity interests belonging to the people of Papua New Guinea…
n Petromin would have the mandate to manage the assets and pay dividends to its shareholder – the State. It would be authorised to enter into debt for the acquisition of new assets. It would also be permitted to raise capital through other financial arrangements. including the flotation and sale of equity or shares of project specific subsidiaries.
n The definition and references in policy and law to the State nominee should be amended to reflect the creation of Petromin.
n Petromin would be required to maintain the highest prudential standards and to carry out its business with the highest probity…”
“Consistent with this policy, Petromin was created by the State in 2007 to be the State nominee in all mining and petroleum assets for the purpose of the State’s back-in-rights as well as in its own accord by investing in the whole value chain of the mining and petroleum industry or in partnership with other industry players. Accordingly, Petromin has been nominated to exercise the State’s back-in-right in all the emerging mining and petroleum projects."
http://www.postcourier.com.pg/20130301/business04.htm
This was the article from a few days earlier where the NPCP board was sworn in with assets of approx $20 billion Kina:
"New Board sworn in
By MELANIE VARI
PAPUA New Guinea’s very own oil company, National Petroleum Company PNG (NPCP), which is estimated to have an aggregated net asset value of K20 billion in other companies and a share of the LNG Project valued at K15 billion, swore in a new board of directors on Friday.
Minister for Public Enterprises and State Investments Ben Micah, Minister for Finance James Marape and Governor for Southern Highlands Province, William Powi were three MPs present at the solemn ceremony conducted by Deputy Chief Magistrate Dessie Magaru.
Ms Magaru swore-in a high-powered group including, Chairman Frank Michael Kramer and his six directors, Managing Director Trans Wonderland Larry Andagali; Chairman MRL Capital Mark Soipang; Country Manager Barrick PNG Ila Temu; Chief Executive Officer Resource and Logistics Solutions Mathias Lasia; Acting Managing Director NPCP Wapu Sonk; and General Manager ECO Care Engineering Limited Professor Benedict Yaru.
Prior to the swearing-in ceremony Mr Micah acknowledged the presence of other dignitaries including, Mineral Resources Development Company’s (MRDC) Augustine Mano and new Independent Public Business Corporation (IPBC) boss Wasantha Kumarasiri. He explained that NPCP was owned by the 7 million people of PNG through IPBC, was previously known as Kroton in 2008, a company nominated by the State of PNG at the time to participate in the PNG LNG Project.
With Kutubu entering the scene that many years ago, PNG was labelled a third or fourth league player in the world oil business, however, Mr Micah said this nation has proven all its critics wrong because it is now known as unique and holds some of the biggest oil and gas reservoirs in the hemisphere.
Despite a controversy-ridden past, NPCP has 16.57 percent in the LNG Project and is the third largest partner behind ExxonMobil and Oil Search Limited.
In November 2011 following the August 2 change in government, the National Executive Council (NEC) moved to shelve Kroton (now NPCP), transfer its employees to IPBC and reduce its mandate to the PNG LNG Project, however the O’Neill-Dion Government has a completely different view.
“The O’Neill-Dion Government has a different view, that PNG should build on the balance sheet of NPCP and build our own capacity to partner with our resource developers in a meaningful manner and not become tax and royalty collectors,” said Mr Micah.
The NPCP was revived by the National Government three weeks ago and the minister thanked other partners like Oil Search, Santos, InterOil, and countries with big companies like China, Korea and Japan who have seen market sense as diplomatic partners.In clarifying the difference between Petromin and NPCP, acting MD Wapu Sonk told the Post-Courier: “Petromin as we can understand just by its name looks after petroleum and mining interests, but NPCP is just focussed on the LNG Project and oil and gas projects.”
Meanwhile, the minister announced at the end of the ceremony that NPCP will spearhead developments through the growth and wealth it creates and better manage landowner percentage by working with the five LNG affected provincial governments (Southern Highlands, Hela, Western, Gulf and Central provinces).
“I would like to help the landowners through NPCP, with the little share they have with the provincial governments. In the next phase I will, with the support of this board and IPBC, set up the landowners to become millionaires and billionaires in their own right by having their own company.”
“Governor, I want us to remove the equities portion in NPCP and set up for them a separate landowner company, and I want this company to work in partnership with MRDC and NPCP to create a big partnership that must control our oil and gas in this country,” announced Mr Micah. He called on all landowners to be aware of this and co-operate with him as he has already set up a working committee at IPBC so that it would become a stand-alone company that must directly own the interests of the customary landowners in the oil and gas industry."
http://www.postcourier.com.pg/20130225/business01.htm
Duma responded to P Mulacek's comments of having approval from NEC on the 3.8 mtpa startup on March 6th. Obviously he is tryig to make the point that IOC's project ownership should end up in Petromin where Shell has been designated as the preferred operator. O'Neill-Dion and the National Government feel differently.
Can't believe factions within governments don't see eye to eye. The rest of the world governments don't have this problem, do they?
