PNG Royalties Dispute Could Spark Conflict: Report
A dispute over royalties from the Papua New Guinea LNG project has the potential to descend into armed conflict, a report by anti-poverty group Jubilee Australia warned May 9.
“Although some royalties have been paid to communities near the LNG plant, the report finds that, four years after the gas has started to flow, no royalties have yet been paid to Hela communities,” it said. The situation has, over the past three years, lead to a series of incidents of violence, sabotage and kidnapping, but the threat grows greater with each passing year, it said.
“Since August 2016, the violence has escalated as a more militant younger generation of leaders in Hela begin to flex their muscles. A worrying pattern is developing where the government appears to be paying off protesters to at least temporarily alleviate discontent,” it said.
High-powered military weapons are widely available for hire to frustrated landowners across Hela Province and beyond, and the build-up of arms has accelerated to a point where it is speculated that the landowners are in possession of more firepower than the entire PNG defence force, the report said.
In response to the report, ExxonMobil said in an emailed statement May 11: “ExxonMobil has been instrumental in driving economic growth in PNG by producing significant, lasting benefits, which include billions of dollars in development levies, taxes, royalties, equity payments and support to local business, as well as thousands of jobs for local citizens and a strong commitment to social progress”.
“Addressing developmental challenges in the country requires ongoing collaboration between the government, private sector and citizens. We’ve been working to assist communities in the Highlands since construction of the PNG LNG project began,” it said.
PNG LNG is operated by ExxonMobil (33.2%), with Santos (13.5%), National Petroleum Company of PNG (16.8%), JX Nippon Oil and Gas Exploration Company (4.7%), Mineral Resources Development (2.8%), and Oil Search (29%) holding interests in the project. A spokesperson for Oil Search said: “We are looking to commission an external independent expert to review the validity of the assumptions as we are very confident that the project has made significant contributions to the PNG economy”.
PNG Prime Minister Peter O’Neill reportedly called the report “fake news” despite admitting he hadn’t read it, The Australian reported.
The report calls for the PNG Government and the companies involves to re-negotiate a new fiscal agreement for the project.