JOE FERNHOUT*
THE first liquefied natural gas cargo of the PNG LNG project was loaded onto the Spirit of Hela on 14 May 2014.
The three markets for the gas were China, Taiwan and primarily Japan; the project sending 6.9 million tons of LNG to these three Asian markets each year.
On 22 July last year, the founding father of Papua New Guinea, Sir Michael Somare, said in the Post-Courier newspaper that “despite 250 shipments of oil and gas so far, there is nothing to show for [it].”
Sir Michael said each shipment was valued at around $US220 million and he questioned why the government kept borrowing. He also stated that prime minister Peter O'Neill should tell the people the truth about the economic situation affecting the country.
Through Kumul Petroleum Holding Limited, the PNG government holds a 16.575% stake in the Exxon Mobil PNG LNG project. Exxon Mobil, which invested $US20 billion, has the biggest stake and receives the largest portion of the income.
In October 2016 the PNG government began receiving its share of revenue from the project.
In The National newspaper on 18 April 2017, petroleum and energy minister Nixon Duban reported that PNG “earns $US50 million (K160 million) from every shipment of liquefied natural gas exported”.
Then on 18 May, ExxonMobil managing director Andrew Barry said “Just 10 days ago we celebrated our 300th cargo-almost three years to the date that our first cargo set sail for the first customer in Asia.”
In the same Post-Courier he revealed more good news - the company had been told that the PNG LNG project field’s resource base was 25% larger than previously assessed.
As of 1 July this year, at least 310 LNG shipments had been delivered. If you do the math you will find that PNG, which invested about $US4B in the PNG LNG project, has received around $US9 billion (K27 billion) in revenue – an excellent return on a K4 billion investment.
Last year, the PNG government received at least K15 billion. (Readers should note that the annual budget of the PNG government is about K12–K15 billion a year.)
The question is: “What happened to the money?”
Only prime minister Peter O’Neill and a select few know the answer to that, and they aren’t talking. The LNG money from Japan, China and Taiwan does not flow into PNG banks. Instead it has been channelled into a bank in Singapore.
No one except the prime minister and a few others know what happens to the money after that.
Every member of parliament – including those in the prime minister’s party – ought to be jumping up and down demanding answers on the destination of those PNG LNG funds.
The Post-Courier and The National should be shouting their questions from the rooftops.
The truth is that these funds should go directly from Japan to a PNG bank. The people and economy of Papua New Guinea are suffer while a lucrative revenue source doesn’t seem to be delivering.
If Peter O’Neill is re-elected and forms the next government, will another K500 million or K1 billion “disappear”. PNG is being plundered.
* ‘Joe Fernhout’ is the pseudonym of a person who has legitimate fears that if their real identity was disclosed, their PNG work permit could be terminated and expulsion from the country would follow