PNG PRIME MINISTER HAILS NEW GOVERNMENT VENTURE

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PORT MORESBY, Papua New Guinea (PNG Post-Courier, June 7) - Prime Minister Sir Michael Somare last night realized his dream of Papua New Guinea getting fair share of its natural resources when he officially launched Petromin PNG Holdings Limited.

Sir Michael told invited guests at the launch of the company that Papua New Guinea seriously needed to get into the drivers’ seat to operate some of its mining and petroleum assets and get maximum benefits from these assets.

He said PNG had a successful national company, Orogen Minerals Limited in 1986 that took care of the State’s assets in mining and petroleum projects but it was acquired "through a hostile takeover" in exchange for a 18.75 percent interest in Oil Search Limited. Petromin will be responsible for managing the state’s interests in mining, petroleum and gas projects in the country and also to encourage downstream processing of these resources in the country. Somare said Petromin would be 100 percent owned by the state on behalf of the people of PNG and the Petromin Act allowed the company to operate at arm length from the Government.

"Parliament’s intention was to keep Petromin away from political control and influence so that it can make independent and professional investment decisions for the benefit of the people of PNG," Somare said.

"Despite recent myths and gossips in the media about accountability issues, the Act purposely removes Petromin from being subjected to the Public Finance Management Act, the Auditor General Act and the Public Accounts Committee because of several important reasons." One of these was because of "negative pledge" which major financial institutions such as the World Bank and the Asian Development Bank would use to invoke the negative pledge provisions of sovereign loan arrangements making it difficult for the State to freely arrange for commercial borrowing. "By not subjecting Petromin to the relevant state oversight agencies, the company can operate as an independent being with respect to conducting its business, including arranging commercial borrowing from the strength of its balance sheet," Somare said.

He said Petromin was also incorporated under the Company Act just like any other private sector company where issues of corporate governance and accountability were managed through professional organizations like accounting and legal firms.

The chief said that Petromin would be listed on the Port Moresby Stock Exchange in the future and the Government did not want Parliament to amend its Acts to facilitate the listing by removing such Acts as the Public Finance Management Act.

Former Chief Secretary to Government Joshua Kalinoe will head Petromin as chief executive and the board members will be Kerenga Kua, George Minjihau (acting chairman), Professor Geoffrey Heal, Sumasy Singin, and Brown Bai while interim Company Secretary will be Melvin Yalapa.

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