That is the word from State Enterprise Minister Arthur Somare on his return from China this week
Somare was part of the delegation of his father, Prime Minister Sir Michael Somare, who was on an official visit to China.
Sir Michael had enthusiastically backed the Elk-Antelope project in the Gulf province, and has made at least two visits to the site to flare gas there.
In China, the Prime Minister and Chinese Premier Wen Jiabao witnessed the signing of heads of agreement between China’s National Offshore Oil Corporation and InterOil and Petromin to develop the project.
But in a statement issued on his arrival, Somare said the prime minister and senior ministers on the delegation made it known to Chinese officials that the ExxonMobil-led PNG LNG project was the number one project and the priority for the government.
He said while the involvement of Chinese companies in a range of potential aspects of the InterOil-backed Liquid Niugini Gas Limited might represent future commercial opportunities, the PNG government stressed that there remains a number of domestic policy and regulatory processes which had yet to be concluded so as to allow the LNGL project’s fiscal and technical frameworks to be sufficiently established.
He said the ministerial committee on the economic sectors chaired by Treasurer Patrick Pruaitch, a sub-committee of NEC, had made it clear that it was unlikely that the LNGL project, if it matures to a point where a project agreement between the government and the project sponsors can be executed, would receive fiscal concessions above and beyond what was provided to the PNG LNG project in the PNG LNG gas agreement executed last May 22 with ExxonMobil and its co-ventures.
“By any reasonable standard, PNG already has an attractive fiscal regime for the petroleum sector and a dilution of this regime in respect of a LNGL project is not warranted,” Somare said, referring to speculations that a deal had been struck to sell gas cheaply, or below market price, to China.
Based on “leaked” documents, the Post-Courier ran a front-page story last Friday suggesting that a cheap deal was struck and PNG stood to lose billions of kina in revenue.
InterOil issued a statement last weekend, describing the report as misleading and untrue
Somare said: “I do not wish to interfere or pre-empt commercial matters, however, just having gone through a very clear and transparent process with ExxonMobil and its co-venturers over the last almost two years, we as a ministerial team, are very cognizant of the complex issues and risks potentially associated with the involvement of the off-takers in the financing, development and operations of LNG projects.”
He said any proposal by project sponsors that involved significant off take arrangements with one or more project venturers and which would see LNG marketed to related parties of the project operators or co-venturers, should expect rigorous government scrutiny of these commercial and operational arrangements so as to ensure that the appropriate share of economic benefits from the commercialization of the nation’s natural resources is retained in PNG.
“The level of analysis and investigation by the State team during the PNG LNG project has set the benchmarks for all resource projects and project proponents will not be provided any shortcuts in that respect,” Somare said.
