Hon. Peter O’Neill CMG MP
At the 14th Papua New Guinea Mining and Petroleum Investment Conference
5 December 2016
- President of Mining & Petroleum Chamber, Mr Gerea Aopi
- Ministers of State and Members of Parliament;
- Heads of Government Departments and Agencies;
- CEOs and other leaders of our resources sector;
- Distinguished Guests
- Ladies and Gentlemen.
It is my honour to deliver the opening address at this important conference.
And if it is the will of the people of Papua New Guinea – I will be delighted to be back this time next year.
Our meeting each year provides the opportunity to discuss challenges and opportunities and how we can work together to overcome them to take advantage of the opportunities.
The Government can’t do it alone – partnership with industry is vital.
Together we must continue to harness the opportunities that are before us.
Over the past five years of our Government, and our country has also seen a great deal of change and, I must say, we have achieved a lot in this space of time.
We came to Government with a very straight-forward plan for the nation.
We promised to advance development through a focus on a set if policies of improving education, expanding access to healthcare, improving law and order and restoring critical infrastructure for the country.
Since coming to office we have doubled the number of children in our schools – to well over two million children are now in school.
Many of the new students are girls, who never had the chance of being educated before.
We have expanded access to universal healthcare around the country.
Let me say this is not a simple task, however, we have a lot of work still to do.
But, through partnership with the churches, private sector and NGOs, more of our people have access to healthcare.
Law and order is improving around the nation.
We have reopened the Bomana training college, provided more funding and improved living conditions for police, and better funded our courts.
We have also made substantial investment in restoring the critical infrastructure right across the country.
To our critics, it is not just the cities where we are improving infrastructure, it is right across the country.
For decades our ports, roads and public buildings had not been maintained and had been left to ruin.
We have restored assets where we could, and built new infrastructure where it is was needed.
Now we are seeing greater productivity in Government, and greater opportunity for business and our people.
We have also devolved key decision making on government services, and their delivery, to the levels that are closest to the people especially the district administrations and local level and community councils.
This will continue to cut waste and mismanagement and to ensure the people have a real say in the government priorities for their communities.
As a country, we have hosted a series of international events including the Pacific Games; Pacific Islands Leaders Forum; the African, Caribbean and Pacific Leaders’ Summit, APEC Ministerial and Officials Meetings; and, two days ago we successfully concluded the FIFA Under 20 Women’s World Cup.
These events have exposed Papua New Guinea to the world in a positive way.
In 2018 Papua New Guinea will host APEC.
This is a whole year of important APEC meetings that will conclude with the Leaders’ Summit.
The APEC Leaders’ Summit brings together the Heads of Government from APEC’s members.
The leaders of our Pacific Island States will also attend as our guests.
As part of Papua New Guinea’s hosting of the APEC process, we will seek to host an APEC Mining Ministerial Meeting.
There have only been three APEC Mining Ministerial Meetings in the past ten years.
I see these meetings as essential for promoting co-operation and innovation in this sector.
Your input to these deliberations will be very important.
In terms of trade, at a global and regional level, we are in an uncertain period and the world is waiting to see how current changes in Governments around the world will affect trade and investment.
As a Government we will continue to advocate for global commitment to ‘freer trade’ between our countries.
I had already indicated some time ago that we are maintaining a preference for bilateral trade and investment arrangements.
Earlier this year we announced that Papua New Guinea would not be a signatory to the PACER Plus trade agreement.
We see this arrangement as a net loss for businesses in Papua New Guinea.
We believe that our country is better off pursuing a stronger bilateral trade agreement with Australia, New Zealand and others in the region.
In pursuing one-to-one trade agreements, we implement these agreements so that we can continue to modernise our economy.
hope to implement agreements that are modern and relevant to our economy.
Our Government will seek the full involvement of our industries such as the Mining and Petroleum in every stage of trade negotiations.
Our focus will also include countries that have become a significant markets for our mineral resources and agricultural and marine products.
THE PNG ECONOMY – CHALLENGES REMAIN
2016 has certainly been a challenging year.
We are now almost at the end of the year.
And there is no doubt that 2017 will be a challenging year for the global economy as well.
Government revenue from the oil and gas sector had fallen from nearly two billion Kina a year at the height of prices, to around 260 million Kina a year.
Adjusting to changing realities has been challenging but is key to surviving the challenges that we face today and into the future.
As the Good Treasurer outlined in the recent national budget, the economy will grow at a slower rate in 2017 – but there will still be positive GDP growth.
The government will do what it can, without exceeding borrowing and spending limits, so that we continue to promote that growth.
The budget for 2017 is tough on Government and the public sector – but not so tough on business and the resource sector.
We aim to main stability in these sectors.
It encourages business and investment growth in a challenging economic environment.
We have maintained as much spending as we can on economic infrastructure – on roads, on ports, airports and other sectors that will develop our communities. As well as the development of urban communities with a focus on affordable housing and services.
We have, above all else, delivered on our benchmark policies that improve living standards, opportunity, and community harmony.
They are directly benefiting the people, the families, who need it most of all.
We are doing what we can to maintain good government at all levels in this challenging global economic environment.
What we need from our resource sector, and from our investors, is that you maintain your confidence in our economy.
I am certain that you have done your homework and you know the fundamentals of our economy are strong.
Inflation is manageable, Government debt is within our legal limits and the availability of foreign currency continues to improve as export revenues increase.
In fact, we are doing much better than so many other countries around the world facing similar challenges.
While we all see biased and aggressive reporting from some news agencies, we trust you know the real picture of our country and our economy.
While we face challenges in the short term, the economic future of Papua New Guinea is looking bright, and remains a sound investment destination.
POLITICAL STABILITY AND CERTAINTY
On each of the previous occasions I have addressed this conference, I promised to you that our government will deliver a stable political environment and stable policy.
I am proud of the fact that, year after year, we have delivered on this promise.
The disruptions that occurred earlier in the year – brought about after agitation and funding from many of our critics and opponents was regrettable, but it was short lived.
Our Coalition Government will end this Parliament term as strong as ever and as united as ever.
Next year Papua New Guinea will host our most important national elections – a five yearly event that is at the very heart of our parliamentary democracy.
I am confident the elections period will be robust – but it will be harmonious.
Whenever I meet with investors, both our current investors and future investors, I am asked about stability.
Papua New Guinea, in a challenging global and regional environment, offers a lot of certainty.
We are very proud of that.
PAPUA NEW GUINEA MINERAL RESOURCES SECTOR
It is still the best time to invest in Papua New Guinea.
We have seen the downside – the lower commodity prices and the effects of drought and climate change challenges.
But today there is some upward swing.
No one knows when oil will reach 120 dollars a barrel again – but we do know that in the future it will.
I would like to thank the resource companies who have continued to not only maintain confidence in our economy, but have increased their investment in our country.
Companies such TOTAL, ExxonMobil and Oil Search to name a few, but there are also many of you in this room today.
Other investments are taking shape and are coming online including the Wafi-Golpu minerals exploration project, Papua LNG and the expansion of the current LNG project.
We also have the Frieda River and Yandera gold and copper project.
Freida River has the largest known gold and copper deposits in the world – over two billion tones.
The Government is fully committed to these projects, and the number of other projects at various stages of development and approval processes.
There are a number of reforms that are underway in our resources sector as we seek to increase productivity in the tough global economy.
As we are all seeking to increase productivity, there are a number of developments that I would like to speak about.
Papua New Guinea’s first EITI report was launched and published in February 2016.
We are now on track to publish our second EITI report by end of this year.
The EITI process is helping improve current policy settings for the sector.
It increases transparency and accountability of the revenues paid by the companies to National, Provincial and Local level Governments and Landowners.
It further enhances transparency in the distribution of revenues from the National Government to sub-national levels of Government.
It is heartening to see first-hand the level of collaboration is happening between Government, industry and civil society in publishing these reports according to global standard.
We hope that the dissemination of these reports will stimulate discussion on the management of the sector, assist in better governance and create greater trust between local communities, Government and industry.
The Treasurer and his Department must be congratulated for the establishment of the Secretariat to manage this process.
Our aim is to achieve a fair deal for our people, both landowners directly impacted, but also the country as a whole, have been the driving force behind the proposed changes.
I know that many have worked tirelessly to develop the draft Act – both from Government and from industry.
I thank you for engaging with each other so honestly and openly.
If not done properly, a new Act has the potential to create uncertainty for investors so the timing the changes is important.
Any change to the Act will ensure there are equal benefits for landowners and Provincial Governments.
The Government’s recent decision to give 33% of direct shares in the Ok Tedi mine to landowners and the provincial government, and the 17.4% of BCL shares to landowners, is a clear indicator of our desire to share benefits through this policy.
I want to state categorically that there will be no changes to the Mining Act prior to the 2017 National Election.
It is only right that the new Parliament be granted the mandate to carry forward any changes to the existing Mining legislation.
Again, I stress that industry will be fully consulted.
We are beginning to see the fruit of our collective efforts in a number of landowner companies with strong balance sheets, progressive strategies and excellent corporate governance.
The emergence of strong landowner companies makes the task of developing and operating a project in our country much easier than in the past.
Landowner companies are proving to be vibrant and progressive partners in the resources industry.
In the petroleum sector, a focus of our Government is on domestic market obligations.
We are working to ensure that some of our gas is used for domestic use and downstream processing.
We will allow for 3rd party access to the pipeline, as stated in the Oil and Gas Act, our national content must be taken into account so that we can improve local participation and it will be integral part of the project agreement, a major shift in policy.
Partners in Development
Partnership is vital if we are to move forward together in a constructive manner, so that Government and industry can achieve our goals.
We can see first-hand, through the positive impact, of what happens when resource developers, partner with us in the various projects.
Oil Search led initiatives in health are examples of partnership.
The on-the-ground knowledge and strong project management skills of Oil Search, coupled with the leadership provided by Government, we are able to have a real impact on the health and wellbeing of our people.
Similarly, infrastructure development, especially through increasing access to electricity for our people, is an area of great potential to improve their standard of living.
ExxonMobil is leading this initiative.
This mutual engagement between our Government, State Owned Enterprises and the resources industry is delivering clear positive outcomes.
Finally, as a Government we would like to remind you that our door is always open.
We are a Government that embraces co-operation and dialogue with our investors.
We also know that this is the time of year when there is often the movement in personnel between companies.
To those who are leaving, we thank you for your support to the resources sector in our country and the development of our nation.
Ladies and Gentlemen,
There are uncertain times ahead in the global and regional settings.
But, I am confident we have established the foundation, substance and capacity to continue to weather this storm.
We have navigated a safe path through these troubled times for a number of years now, and we will continue to move forward with determination.
I thank you for your ongoing confidence in our country and in our economy.
Together we will make Papua New Guinea stronger, we will ensure a solid return for your investments.
Now is a great time to be a part of the success of Papua New Guinea, and I welcome your ongoing commitment.