Petroleum industry boost economic development in PNG

THE petroleum industry has contributed significantly to PNG’s economic development since 1991, business executives attending the current APEC Business Advisory Council meeting in POM were told on Monday.

PNG petroleum industry veteran and Oil Search managing director Peter Botten told the meeting that since oil production and export commenced in PNG in 1991, the industry has invested more than $US53 billion in the country, up to the end of 2015.

Mr Botten, the man behind Oil Search’s growth and thriving success in the country, said of this amount, about $US 25 billion was in the last five years, since construction and production commenced for the PNG LNG project.

He attributed the success of the industry to the strong operating environment, underpinned by strong fiscal and operating stability over this period.

Mr Botten said PNG was unique in that it allowed landowners to be directly involved in these large scale mining and petroleum projects – something that is not seen elsewhere globally.

He said whilst PNG still provided significant opportunities for further development, it is also facing new challenges, in the face of low commodity prices, smaller benefit streams and enhanced expectations.

The significance of the sector’s contribution to PNG’s development is immense. According to the World Bank, since the sanction of the PNG LNG project, over the last four years, PNG LNG project construction and other resource industry activity has lifted the country’s gross domestic product from $US8.1 billion to $US16.9billion, a growth of more than 11 per cent.

Highlighting the industry’s contribution, Mr Botten said the direct benefits to the State include; petroleum tax, salaries and wages tax, duties, withholding taxes and development levies, royalties and equity dividends.

The indirect benefits include employment and training, local business development, tax credit projects, infrastructure, public health, child maternal health, agricultural programs and community infrastructure.

Mr Botten reiterated that PNG has an enviable record of delivery of world class mining and petroleum projects, with an unprecedented involvement by landowners and multi stakeholder involvement.

He said whilst significant opportunities remain for resource development in PNG, which remain attractive even with low commodity prices, the realisation of these opportunities depends on a stable operating environment, driven by community and government support. 

Post Courier/ PNG Today