PNG’S PETROMIN CALLS FOR FUND MANAGERS

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PNG’S PETROMIN CALLS FOR FUND MANAGERS Concern that oil, mining earnings accounted for

PORT MORESBY, Papua New Guinea (PNG Post-Courier, Aug. 14, 2008) – Fund managers should be appointed to manage the billions of kina the country will be receiving from the proposed liquefied natural gas (LNG) project, the Waigani Seminar was told yesterday.

[PIR editor’s note: Petromin is a state-owned entitiy set up in 2007 to hold the Papua New Guinea government’s equity in mining and oil projects.]

Petromin chief executive Joshua Kalinoe said the Government should also ensure the massive revenue earnings were fairly distributed to fully benefit the people.

"The challenge for policy makers and technocrats is how can revenue from the resource boom be put into productive use by ensuring transparent and fair accountable systems and processes," he said. "One option would be to look at the person empowerment concept. Empowerment of individuals would require efficient and accountable expenditure allocation plans at both the micro and macro levels."

Mr Kalinoe said the empowerment programs could be funded through fund managers such as commercial banks and finance companies.

"As long as world commodity prices in the mineral and petroleum sector continue to hold at their current levels, billions of kina will continue to flow into the national coffers. "The challenge is how this wealth should be fairly shared among all Papua New Guineans, including those in the villages," Mr Kalinoe said.

The LNG project is being led by ExxonMobil and has a planned life of more than 30 years. It is expected to earn up to US$16 billion with government earnings of almost PGK1.4 billion (US$552.5 million ) a year. A second project could be in the making following the discovery of significant gas reserves in Gulf Province by InterOil.

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