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Nothing to show in province for $4.5 billion in oil revenues

PORT MORESBY, Papua New Guinea (PNG Post-Courier, Dec. 7, 2010) – As Papua New Guinea’s (PNG) largest-ever investment conference got underway in Sydney yesterday, Medical officers in Daru, Western Province, delivered a bitter and hard bill to swallow: more than 200 people have died of cholera in the Province.

And this is from a Province that boasts of one of the largest copper mines in the world which paid billions of kina into government and the provincial coffers.

Latest reports reaching Port Moresby from Daru say more than 2,000 cases have been reported through the VHF radio network. And in Sydney yesterday, Oil Search managing Director Peter Botten told a packed audience that his company has so far paid PNG a mammoth 11.931 billion-kina [US$4.54 billion] in oil benefits between 1992 and 2009 without any indication of improvement in living standards.

"There’s nothing to show for expenditure of all that money. No significant appropriate improvements in living standards" had accrued to Papua New Guineans from billions of kina received by landowners, provincial governments and the national government as resource benefits since 1992," he said.

The 11th biennial conference organized by the PNG Chamber of Mines and Petroleum is attended by the country’s landowners, government ministers, provincial governors, public servants and international oil and gas industry delegates.

Mr. Botten told the 11th Mining and Petroleum Conference that a total 11.931 billion-kina [US$4.54 billion] had been paid out by his company to the national government, provincial governments and to landowners from 1992 to 2009.

The National Government received 8.796 billion-kina [US$3.34 billion] in benefits for petroleum income tax, salary and wages tax, stamp duty, withholding tax and equity dividends. Prime Minister Sir Michael Somare opened the conference. He said when the next conference opens in 2012; a new government will be in place.

By then three more world-scale mining operations will be under construction, among them Marengo Mining’s US$1 billion-plus Yandera project and Xstrate’s Frieda River project (US$5.3 billion).

Bougainville Copper Limited could also re-open the Panguna copper mine by then at the cost of about 11 billion-kina [US$4.2 billion].

He praised the Australian government for supporting the PNG Liquefied Natural Gas project with a US$500 million concessional finance and brushed aside criticism as being "totally misguided."

He said the Australian companies involved in the LNG project have won contracts worth twice more than the concessional funding from Australian government.

He thank the Australians for also helping to create legislation to set up Sovereign Welfare Fund which created a Stabilization Fund, Future Fund and Infrastructure Fund,

He also announced the creation of a Petroleum Resources Authority and the creation of a Petroleum National Company.

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