Call To Review Oil and Gas Act, and Mining Act


By Quinton Alomp – EMTV News, Port Moresby

Papua New Guinea’s poverty level in terms of the United Nations international ranking can be improved if the Oil and Gas Act, and the Mining Act, are reviewed, a prominent lawyer said.

Lawyer and first-time politician, Sinesine-Yongomul MP, Kerenga Kua, pointed out loopholes in both constitutional acts that continue to create what he describes as “a good investment destination” for petroleum and mining companies.

He said the inequity in the current framework of the Oil and Gas Act, and the Mining Act, must be reformed to get the maximum return on minerals and petroleum for the state.

The law states that all minerals and petroleum belongs to the Independent State of PNG.

But the former Attorney General argues that the state’s ownership is forfeited once a development licence is given to the developer.

“The big, big problem with the Petroleum Development Licence and Mining Lease is this.

“Upon the grant of the Petroleum Development Licence and upon the grant of the Mining Lease, the state ownership to petroleum and to minerals is forfeited right at that point in time.

“Without any compensation in return. It now 100 per cent belongs to the finders. But hold on the state says it owns it, it’s not lost property.” he argued.

Kua said this is the problem where licences were given free of charge with no compensation in return.

The developer then asked the state to buy equity shares in the project. Petroleum companies allow up to 22.5 per cent while mining companies have a maximum of 30 per cent ownership.

The state than struggles to buy shares, goes overseas and borrows from international lenders to buy shares for the licence that was initially provided at no charge.

As the country’s loans build up, the poverty level on the international scale remains extremely poor.

In 2013, the United Nations ranked PNG 156 out of 187 countries with poor access to health, education and clean drinking water.

But Kua argues that the poverty level can be improved only if the Oil and Gas Act, and Mining Act, is revisited and is given a fair compensation for licences.

He said unless the laws are changed, PNG would continue to borrow to buy shares such as the controversial UBS loan sage. 



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