By Staff Reporter : PNG Today
PNG is emerging as a favoured destination for international majors in natural gas sector says Oxford Business Group chief executive officer AndrewJeffreys. MrJeffreys was highlighting OBG’s fifth edition of THE REPORT for PNG 2016 yesterday stating that this in turn has triggered a substantial shift in other sectors from construction, services to communications, finance, logistics and agribusiness. He said that in the short term the investment case for PNG currently hinges on the delivery of natural gas projects and reinvestments of proceeds in infrastructure and strategic projects that help to boost domestic productivity such as high technology, modern agriculture and tourism.
“Given its unique hydrocarbon and mining potential, PNG has a relatively easy task of differentiating itself as a destination of choice for energy majors and commodity investors. “Delivery of large scale projects creates an enormous buzz in international media and tends to attract smaller investors. “PNG has a formidable pipeline of energy and mining projects to be delivered within the next 10 years, however feasibility studies alone that are available to the public reveal an astonishing 26 billion dollar investment prospect,” he said.
Mr Jeffreys said given its small and rural population, PNG view stands to benefit from technological advances developed in other countries, skipping the traditional stage of becoming a low cost manufacturer, adding that instead the country has an opportunity to focus on value adding sectors that support its core industries in oil and gas, mining and agriculture. “Our estimates suggest by 2025 tourism contribution to GDP is set to rise to 5.3 per cent and PNG’s hospitality sector is likely to emerge as one of the biggest source of jobs in the next 10 years. “And what can we expect from agriculture. The sector saw growth of 3.9 per cent in 2014 with palm oil accounting for two-thirds of export revenues, and the revival of global commodity prices is helping cocoa farmers, however the only challenge is access to modern technology and logistics,” he said.
He said although PNG cannot compete with Asian manufacturing power houses such as China, Vietnam and Thailand, it ought to focus on developing local capacity to cater for local demand in food, construction and timber related consumer and industrial products. “Today, manufacturing sector remains small with PNG running a trade deficit with other countries, if you strip out energy exports. “Even if 30 per cent of it is delivered, we are looking at a significant boost to employment in the construction sector, increase in government revenues and growth in technology services to support these operations,” he said.