Oil Search gives K19m levy to State

Oil Search gives K19m levy to State

WHILE most of the benefits from the PNG LNG project in terms of equity, royalty and development levies are yet to matierialise, benefits from existing oil projects continue to flow into the government coffers.
This was evident in a K19.878 million development levies for the 2011 year ending paid to the State by oil and gas developer Oil Search Ltd (OSL) from its South East Manadana and Moran projects in Southern Highlands.
OSL general manager for external affairs Willie Kupo, while presenting the cheque to representatives of the Department of Petroleum and Energy (DPE), said OSL continues to achieve strong results from its oil fields as yesterday’s payment of more than K19 million in development levies to the State indicates.
Mr Kupo said significant benefits have been paid by the petroleum sector since production started in 1991 and benefits continue to flow from OSL-operated oil fields despite a challenging operational environment, posed by declining oil fields and escalating costs.
“Development levies and royalty payments are additional to other cash benefit streams including business development and taxes that are paid to the landowners and the State,” Mr Kupo said.
“The State was today presented a total of K19, 878, 290.63 in development levies for 2011. A total of K58, 503, 954.46 has also been paid to the State as royalties in 2011.
“Over the years, a total of K174, 968, 942.27 in development levies and K504, 442, 458.62 in royalties have been paid to PNG stakeholders by O SL.”
Mr Kupo said the State as per the Oil and Gas Act and relevant benefits sharing agreements, will further distribute the development levies to appropriate stakeholders and in this case the Souther Highlands Provincial Government.
He said landowners and the State are equity participants of the oil projects and their share of benefits are managed by Mineral Resources Development Company and Eda Oil Ltd respectively.
“Our optimisation initiatives in various safeties, technical and commercial areas continue to pay good dividends,” he said.
“These benefits are delivered by a very strong and dedicated workforce of highly skilled citizen and expat employees.
“OSL recognises project area communities as key partners particularly in social and community development activities.
“We are very much committed to various sustainability efforts in the area of health and community outreach.
“Our tax credit program in partnership with the State continues to deliver much needed infrastructure including health, education and training, employment, business development, roads and bridges to the project area communities.”
The onus now is on the Southern Highlands Provincial Government to make project submissions in order to access these funds from the National Planning which are tied to projects as per their agreement.
Desmond Goru, the pipeline co-ordinator who along with chief petroleum inspector Jimmy Haumu from DPE who received the cheque on behalf of the State, said the funds are tied to projects and will be parked in the Finance Department Trust account to be drawn down by the provincial government.