Tuesday, 24 June 2008 5:07 AM

PNG Sees Historical Oil and Gas Deal

Last week saw a historical deal in Papua New Guinea's history as landowners were given authority by their government to explore and develop their own oil and gas reserves.

As reported by PNG's Post Courier Online, the historical deal took place last Thursday when 'Prime Minister Sir Michael Somare and Petroleum Minister William Duma presented the people of Telefomin in West Sepik Province three Petroleum Prospecting Licences (PPL)'.

According to the report, this is the first time since independence in 1975 for landowners to be given this authority. Landowners were also given K500,000 'as seed capital to help them in their historical quest'.
At the event, Sir Michael 'announced that he has already directed Mr Duma to remove prospecting licences from mainly overseas-based companies who have done nothing or taken too long to explore and start up projects'.

'The three licences were presented to the landowner company, Min Oil Resources Limited', represented by a woman, Mary Lane, 'who has for six years fought with government authorities to obtain such a licence' and who 'was jailed for her struggle to allow her 10,000-plus people living in an area, which lacks health and education facilities, proper road and telecommunication infrastructures, to have authority over their resources'.
'The three licences when combined will cover 467 blocks, which is the largest exploration area to be held by any company. If oil and gas are developed, the landowners will not only receive royalties but also dividends and government taxes'.

The report quotes Mr. Duma as saying, "IN the history of PPL, it's only the expatriates who get those licences and when I heard (Sir Michael) saying the landowners want such a licence, I was shocked. As a Papua New Guinean, I am also proud that our own countrymen and women will own such a licence."

Meanwhile, according to the report, a 'joyful Ms Lane, who is the principal landowner, said a number of interested Asian developers had shown interest, but she maintained she wanted to fully develop the oil and gas project'.