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By Brian Gomez

PORT MORESBY, Papua New Guinea (The National, Nov. 23) - About 10,000 Huli people who live near the Hides gas field in Papua New Guinea’s Southern Highlands are eagerly anticipating plans by the gas consortium to pipe large quantities of natural gas to Australia.

Like most communities around the country, they have been deprived of various government services but have increasingly come to rely on Oil Search to assist with education and local health programs.

Malaria has been eradicated in the valley and visitors will find most Huli families now have five or more children, as a result of the regular spraying of the homes of villagers.

Now that Oil Search has become the operator for the Kutubu, Moran and Gobe oil fields, the company is extending its malaria eradication program to these areas as well.

Southern Highlands, the most populous province in Papua New Guinea with over half a million people, had a population growth rate of 4.2 percent during the 1990s, one of the highest such growth rates in the world.

During a visit to a model village near the Kutubu operations, Kaipu, a local village chief told Oil Search managing director Peter Botten: "Before when Chevron was here we were neglected. No one came to visit us."

The chief, Afaya Siri, posed a question as to where public services would come from now that the government had records of its existence.

Botten, who promised to return to hold more detailed discussions, responded: "We will do what we can to help, but we are not the government. We can help you talk to them."

He said the company recognized that the village had turned itself into a model community and Oil Search would like to help to improve things further and would introduce some health services in the area.

He also promised Siri that he would try to encourage a local bank to set up a branch in the vicinity of the Kutubu area so landowners did not have to do their banking either in the provincial capital, Mendi, or in Port Moresby, where landowners feared getting robbed by "raskols."

Later when Botten and a group of journalists from Australia and PNG visited the Hides area, local leaders made it clear they were fully supportive of the gas project and wanted it to move ahead.

"It is the community’s desire for the gas project to go ahead. This is a huge project for Southern Highlands and PNG," said a local chief, Peter Pontara.

Botten said he welcomed the support of the Huli people for the project. "The garden is getting tilled and we are planting some seeds in the ground," he explained, adding:

"Hides is a very special place in the world and in PNG. We look forward to working with you in this big gas project."

A company executive told the reporters later that the company Medivacs five to ten people every month so they can get urgent medical treatment elsewhere.

"People used to die every day from malaria and we have wiped out malaria," he said, noting that the company had won an international award for this program in 1998.

Only a minute amount of the gas at Hides is presently produced for an 80-megawatt power station that supplies electricity to the Porgera gold mine. A by-product of 45,000 liters a day of naphtha and diesel are produced, mainly for local use.

Hides contains at least six trillion cubic feet of natural gas and less than a fourth will be used to supply potential customers in Australia.

Contractors in the oil fields use about 1,300 workers and Oil Search requires the contractors to ensure that 30 percent are from the project area and another 30 percent from Gulf Province.

Botten told the journalists "landowners are very reasonable people", explaining that oil production assets could not be protected by the company and that they remain safe because "the community wants us to be here".

He said he was aware that in the past – in the period since 1992 when oil production first began – little money and resources have been going to the villages and the country’s leaders have been the main beneficiaries.

Oil Search, he said, wanted to ensure that the vast amount of money generated by the gas project – the oil project generated K2 billion (US$633m) in taxes and K200 million (US$63.3m) in royalties -- would be properly utilized for the benefit of local people and villages.

"We want to see a more rigorous distribution process with the (40-year) gas project," he said, adding that it was useless to go on a witch-hunt about what had happened in the past.

"Management of these issues is just as important as management of production," Botten said.

November 24, 2004

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