"We declare our first goal to be for every person to be dynamically involved in the process of freeing himself or herself from every form of domination or oppression so that each man or woman will have the opportunity to develop as a whole person in relationship with others".

- Papua New Guinea National Goals and Directive Principles

Thursday, 11 October 2012

Total Picks Up PNG Blocks

Wednesday, 10 October 2012

Total Moves into PNG LNG Space

October 08th, 20126:52pm

French energy major, Total has made an entry into Papua New Guinea LNG space by signing five sale and purchase agreements with Oil Search Limited.. The move could precede construction of another giant natural gas-export project in the nation,

Oil Search and Total will hold equal interests in each of the five licences and will work in partnership to explore and appraise the onshore and offshore Gulf of Papua region. The completion of this transaction will mark the first entry of the French firm into PNG.

While the focus of the transaction is on exploring and developing the prospective offshore Gulf and the eastern forelands area, Oil Search and Total have also agreed to form a strategic partnership to look at other licences in PNG, excluding the Highlands area, Oil Search said in a statement.

“Oil Search will continue as the operator, supplemented by expertise from Total. In the event of exploration and appraisal success that leads to an LNG project, Total would develop and operate the downstream facilities of any development,” Peter Botten, Oil Search’s Managing Director, said.

Tuesday, 9 October 2012


 Steven Andre; 04/10/2012

It falls to me as a concerned Papua New Guinean to rewrite on one of the most pointed subjects in most of the PNG social media, the PNG LNG gospel.

The Hela men regard it as the fulfilment of a prophesy, every other Papua New Guinean hope for a better living standard through its proceeds, foreigners exploiting our weakness to milk,
it is the PNG LNG Project, the biggest PNG ever had.

It starts with the vesting of mineral resources in the State. The indigenous landowners are deemed to own the surface of the land and are entitled to royalties only. That is against our customary laws that recognise the ownership of a land as including subsoil resources. We have had experts like our very own Peter Donigi and Sydney based Robert Pritchard who’ve time and again reminded us that that notion is out-dated, yet we do not bother to review. As a result, the landowners have and are continuing to loose big time. 
The following are some of the information I have gathered (and I stand to be corrected by persons having ostensible authorities) on the PNG LNG Project and based on that I believe PNG will stand to miss out big time in this LNG.
1. We own the land and the LNG, yet the Project is developed by Exonn Mobil and its joint ventures. The Landowners have no say as most of the deals were done by the Government officials. The State’s right to ownership of subsoil mineral and petroleum resources deprives them of any standing to negotiate with potential developers concerning resources that are beneath their land.

2. By virtue of the Oil and Gas Act 1998, we have chosen to participate in the project with 19.2 % equity. I don’t understand this? How come we own the land, own the LNG and we have to pay to participate? What is the logic? Is it not possible to legislate for the automatic entitlement of equity without the participating capital [nonsense] by virtue of our ownership to the resources? We can keep the resources if the developers do not agree with our domestic laws and terms.

3. We did not have money for the equity participation so we borrowed $A1.68 billion from the Abu Dhabi Government’s International Petroleum Investment Company. It is understood that we have tied most of our state owned enterprises assets as collaterals and most of the fruits of the LNG harvest are expected to repay that loan. So PNG does not earn any profit until that loan is repaid in full with interest. Imagine how many other loans we are obtaining including the recent K6billion loan from Exim Bank of China. Bai Yumi kisim moni long we na bekim? LNG Tasol ya!

4. Owing to the incompetence of our negotiating team, the Abu Dhabi borrowing was done in Aussie Dollars, which had to be converted to US dollars, leading to another loss of $A300 million. The result of this financial incompetence is that the national government has had to borrow a further K900 million to ensure that Papua New Guinea can retain the level of equity that it wants in the LNG project. In big and complicated negotiations, our clumsy leaders should hire specialised experts to do our negotiation so that we get the best out of the deal which they failed.

5. It is understood that our nearsighted leaders have given the developers a tax holiday for 15 years. I also gather that the project agreement contract does not specify a cap on the barrels of LNG that can be extracted on a daily basis. I understand that four ships have been built to transport LNG to China. China had already signed an agreement with Exonn Mobil few years to sell the LNG. Knowing that a world renowned company like Exonn Mobil which has the capacity, is it not possible that it can extract everything (LNG) out within the tax holiday period?

6. Our Government even wanted to amend the Customs Act to exempt all imports of LNG Developers. Was the tax holiday not enough? Thanks to Garry Juffa and a few who stood against it.

7. Most of the major sub-contracts were given to foreign owned companies whilst we fight over the leftovers.

8. The Infrastructure Development Grants (IDGs) that our landowners have been fighting and were given were budgeted for by the Government. These were not LNG monies. It came from the taxpayers. So we are spending our own money to even look after the landowners? You don’t think so, do you?

9. Our small PNGean business people were anticipating some spin offs like leasing properties and so obtained loans left right centre to develop properties, only to be told just a year before production of LNG that most of the LNG workers would be accommodated on site? Looks like the banks are going to foreclose on those properties. What a disaster?

10. Many people claim that LNG is providing well rewarding jobs for Papua New Guineans. I see it as a brain-drain and will have a strain on the PNGs human resources. As a result, it will seriously diminish the competitiveness and effectiveness of other non-mineral sectors. Government is diverting too much attention into the LNG Projects. I’m afraid we may have contracted the “Dutch disease”.

11. Creating Sovereign Wealth Fund offshore sounds like a good idea. But who is going to manage it. Are those funds going to be safe after we’ve had experiences like the K100million MVIL Investment in the Woodland Capital Company?

12. Even if we gain some wealth from the LNG, how can we manage this wealth and translate them into long term socio economic development? Mismanagement and corruption have barrowed leakages in institutions of Government that seriously impede development. I don’t think we are prepared to manage the unprecedented wealth. Is it safe to say that it will destroy PNG?

Monday, 8 October 2012

Independent probe casts new light on PNG’s Tumbi mudslide disaster

21:07 October 5, 2012 

Tumbi mudslide
The Tumbi mudslide in Papua New Guinea’s Southern Highlands in January. Image: PMC archive
An international coalition against state-assisted crimes is calling on Papua New Guinea to fully assess the cause of a deadly landslide – potentially linked to Exxon-Mobil – amid fears of alleged corruption and collusion in government ranks.

Pacific Scoop:
Report – By Josh Martin

A damning International State Crime Initiative report has called for an independent commission of inquiry into the Tumbi landslide in Papua New Guinea’s Southern Highlands region.

ISCI’s report, The Forgotten Disaster, released late last month, seeks independent assessments on four aspects of the tragedy which claimed up to 60 lives.
They are cause of the landslide on January 24; safety oversights at the LNG project; the official response; and, allegations of collusion and impropriety on the part of Esso Highlands Ltd.

The Tumbi landslide was one of the country’s worst, according to the Red Cross.
The subsequent National Disaster Centre report to then-intergovernmental relations Minister Mark Maipaikai, released just two days following the January 24 tragedy, blamed high rainfall.

“Given the absence of a seismic trigger, it can be concluded, that the landslide was caused by continuously heavy rainfall weakening the limestone formation causing subsidence,” it said.

The “Q1” quarry, which is leased and used by the Exxon subsidiary, Esso Highlands Ltd., directly boarded the affected area when the landslide happened.

Possible cause
However, the NDC report never mentioned quarry activities including the locally reported, preceding explosions, as a possible cause.

Exxon-Mobil owned Esso Highlands Ltd., which has partnered with the PNG government to create an $18 billion liquefied natural gas (LNG) project, is mentioned only as a “third party supporter” in the aftermath.

Multiple sources that Pacific Scoop spoke to found this was – at best – an oversight and at worst, a corrupt cover-up.

ISCI board member and criminology lecturer at the University of Ulster, Dr Kristian Lasslett, said the government put “political expediency ahead of families who deserve answers”.

“In light of the testimony provided by two international landslide experts – which echo the concerns raised by local landowners – the cause of the landslide needs thorough investigation, given the close proximity of Esso Highland’s quarry to the impacted zone.

“In the instance of Tumbi, the O’Neill government talked the talk, they promised an independent inquiry, but when it came to walking the walk they were found very much wanting”.

Photographic evidence in the report, backed by Harvard University and King’s College London, shows the Q1 quarry site directly affected – yet not ever officially considered by the NDC’s report as a landslide trigger.

The NDC’s report to Minister Maipaikai however did consider it important to note that its own staff raised concerns about the multinational’s earthworks as a cause – and this should stop.

False reports’
“Inaccurate and false reports and unauthorised statements by NDC officers has resulted in wide spread community confusion and doubt,” the NDC report said.

It may have been alluding to the unit’s Bill Yomba who told CNN following the landslide: “We believe the gas project run by Esso Highlands Limited was a contributor because they had been digging for limestone in the area.”

Prominent Papua New Guinea political blogger Tavurvur, author of The Garamut, said the correlation between Esso Highland’s quarry work and the landslide tragedy is obvious to everyone except the officials.

“The disturbed condition of the mountain slope is a direct result of the work by Esso Highlands in the quarry. This association is undeniable.

“The villagers, who survived, have a deep suspicion of Esso having a role, despite a lack of official evidence – this is why a Commission of Inquiry into the landslide is so important.”

However, Dr Dave Petley, professor of hazard and risk in the Department of Geography at Durham University, said the NDC report should not be considered the definitive analysis of this landslide and a much more detailed analysis is needed.

“Clearly at least a part of the quarry was lost in the landslide, so a proper discussion of whether the quarry played a role in activating these weaknesses seems essential to me.

Dr Petley, a world-renowned expert on landslides, said the NDC’s claims of “abnormally high rainfall”, liquefaction and that “ground water rose significantly above its historical levels” are illogical and unsubstantiated.

‘Clear evidence’
“The NDC report notes that the initial assessment team ‘saw clear evidence of liquefaction of the rock formation’. This is most surprising.

“Limestone is not a material that undergoes liquefaction – I have never heard of such a mechanism in any hard rock – and so I just cannot understand this purported process,” he said.

His gave evidence to ISCI’s report, which asserts that the true cause of the event needs to be evaluated.

“The coincidence of the locations would make one want to look into this properly and in detail – that is a complex and time-consuming task.

“The NDC report had clearly not evaluated and surveyed the area to the level that would allow a proper, valid analysis to be made,” said Dr Petley.

Dr Lasslett told ABC Radio in February that the Q1 quarry had been previously labelled “unsafe” by independent contractors working for the LNG-PNG project’s construction of a nearby airfield in March 2011.

Dr Lasslett’s concerns were echoed on the ground, when Port Moresby author Stanley Mamu said Exxon-Mobil had blood on its hands and the event will be added to a long list of mining industry tragedies.

Not natural
“The government must realise and acknowledge that this was a man-made disaster. This was not a natural disaster.

“The quarry explosions combined with the trucks and heavy machinery used by Esso along the foot of that mountain caused the landslide,” he said.

Mamu said his conversations with survivors of the disaster reveal a deep distrust of the multinational and its relationship to the government.

“The surviving villagers certainly don’t feel good about Exxon, they have lived here for 6000 years without these events occurring.

“These people, who have lost everything, are waiting for the O’Neill-led government and Exxon-Mobil to solve it.

“But the government will never respond – they are far too stubborn,” Mamu said.

Requests to speak with both government officials and Esso Highland Ltd LNG project management were denied.

Doubling of GDP
The PNG government holds a 22.5 percent share in the project, which is expected to double the nation’s GDP within 30 years.

The LNG project involves the construction of gas production and processing facilities in the Southern Highlands, Hela and Western Provinces of PNG and has already spent close to $3 billion on the project, which is due to start production in 2014.

Press releases from the LNG-PNG project confirm the company donated US$50,000 to the Salvation Army effort in the aftermath of the Tumbi landslide.

The amount is 0.00003125 per cent of parent company Exxon-Mobil’s near US$16 billion second quarterly profit for 2012.

University of Western Sydney senior lecturer Dr James Arvanitakis says the mismanagement of the crisis adds to the case for independent monitoring of, and accountability in, mining industry projects in developing countries.

“An organisation like Transparency International should be working with an independent judiciary and this would address the issues around the corruption and collusion in Papua New Guinea.”

Dr Lasslett says the Papua New Guinea government gains nothing from not confronting the potential revelations that an independent inquiry could provide.

“The really crazy thing about it all, is if an inquiry did go ahead, and the findings were extremely unfavorable as far as Esso Highlands were concerned, it would not end the PNG LNG project,” he says.

“In fact, it may lead to improved safety management, and most importantly compensation for those who suffered as a result of the landslide.”

Josh Martin is a Postgraduate Diploma in Communication Studies student journalist on the Asia-Pacific Journalism course at AUT University.

Sunday, 7 October 2012

Did ExxonMobil Pay Torturers?

From Mother Jones

Source URL: http://www.motherjones.com/environment/2012/10/did-exxon-pay-torturers

The oil giant has long said it has no responsibility for atrocities committed by the government soldiers it hired to protect its plant in Indonesia. Now the issue could be headed to the Supreme Court.

Thursday, 4 October 2012

PNG LNG improves safety outcomes

Monday, 1 October 2012

THE PNG LNG project completely nailed safety goals in the June
quarter despite hitting peak construction – with no significant incidents
or accidents reported.

Other PNG LNG environmental and social reports have featured varying unfortunate occurrences, ranging from work-related fatalities, site disruptions, tuberculosis incidents and even a chicken pox outbreak.

The clean safety record for the latest quarter came despite security fears relating to the mid-year election, and is also a tribute to the project’s continual focus on improving safety awareness.

“This improving safety trend is attributed to ongoing improvements in core safety processes, including six consecutive months of improvement in the quality of observation and interactions performed across the project,” Exxon’s PNG subsidiary Esso Highlands said in the recent report.

“As construction activities progress, the project’s focus has moved from managing non-traditional construction challenges, such as working in uncontrolled environments, dealing with remote locations, and managing the safety needs of a cross-cultural workforce; to managing safety hazards normally associated with the construction industry.

“For example, during this quarter the project initiated regular safety best practices meetings as part of the Leading Indicators for Higher Hazard Activities program, established during the first quarter 2012.”

The project has also trained more than 400 PNG safety champions through a separate program.

“Phase two of the safety champions initiative will expand training to non-nationals currently engaged on the project as safety leaders,” Esso said.

More than 17,600 people were in the project workforce during the June quarter, with about half of them PNG nationals.

The onshore pipeline work is one of the most challenging aspects of the project, with more than 170km of the 292km of pipeline welding completed by the end of June.

Construction also began on the Gobe Production Facility up during the June quarter, while work on the Komo Airfield, LNG Plant and Hides Gas Conditioning Plant sites also picked up the pace.

Tuesday, 2 October 2012

Papua New Guinea: Construction eyes new horizons (Economic Update)

Asia | 2 Oct 2012

The construction sector in Papua New Guinea (PNG) has enjoyed rapid growth in recent years. The industry, worth just PGK265.6m ($126.38m) in 1994, is now one of the economy’s largest contributors to GDP, valued at PGK4.81bn ($2.29bn) in 2011. But while annual growth has averaged 17.9% since 2007, there are troubling indicators of an overstretched economy.

With economic growth projected at 8.9% this year, PNG stands to mark 12 years of uninterrupted economic expansion, thanks in part to the $15bn ExxonMobil-led liquefied national gas (LNG) project, which has helped to push the country through the worst of the global financial crisis.

While this growth has allowed PNG to begin the climb out of the lower-income economic bracket, its journey has been hampered by continued challenges from inadequate infrastructure and a workforce with insufficient skills. These bottlenecks have, ultimately, cascaded costs throughout the economy and the construction sector.

Absorbing millions of tonnes of material, the LNG project has caused inflationary spikes in costs. Industry executives report a 25% increase in cement prices over the past few years and PNG’s sole domestic producer, Japanese-owned PNG Taiheiyo Cement in Lae, has not been able to meet demand. This has led some construction firms to import supplies, swallowing the 15% import tariff imposed by the government.

While reliable statistics on commodity price increases remain elusive, the ramifications are clear in base housing construction costs. Estimated at PGK2000 ($952) per sq metre by PNG’s largest national superannuation fund (NASFUND) in 2010, costs have spiked to PGK5000-7500 ($2379-3569) per sq metre, according to a June 2011 analysis from Westpac, an Australia-based bank.

Such increases have only exacerbated protracted and pre-existing housing shortages across PNG, pricing many new developments outside the reach of the lower and middle-income brackets, where they are needed most. At present, around one-third of Port Moresby’s population resides in slums and semi-permanent dwellings.

However, some resources may be freed up soon. Esso Highlands, a subsidiary of ExxonMobil, commenced drilling on the first of its planned wells in July, and the project is on course to be finished by 2014. Once the project is complete, resources such as labour and material will be freed up, thus relieving many of the current inflationary pressures. Some firms have already reported a reverse migration of labour and technical personnel as individual construction projects are concluded, bringing expertise and skills to the sector. While this remains the exception rather than the rule, government predictions also support a cooling of the sector, as the economy emerges from this period of change and growth.

Yet there remains plenty of work ahead. The sector’s cooling contribution to GDP growth, from 3.7% in 2011 to an estimated 0.2% in 2014, is more indicative of new sectors firing up than any large-scale cessation of activity. With the government relying on forthcoming LNG revenues to fuel a wholesale reformation of the national economy, the construction sector remains firmly at the forefront of national development planning.

Working to the PNG Vision 2050 national plan, the government has already embarked on an ambitious four-decade roadmap to transform PNG’s urban centres and national infrastructure. PNG’s roads, ports and airports are all the subject of intense repair and new construction efforts, funded both centrally and by donor support, which will help reduce transport costs for the construction industry.

Investments in transport modalities, worth PGK24.65bn ($11.7bn) to 2015 alone, are expected to provide economic growth of 12.6% by 2030. While this poses its own challenges to the capacities of many domestic firms, the government has already opened the door to international firms that have been quick to stake a claim in the local market.

Elsewhere, plans for urban regeneration penned by the Office of Urbanisation have already set out an ambitious blueprint for 28 critical urban centres by 2030, including five “mega-cities” with populations of more than 1m people. A response to continued urban migration across PNG, developers have already moved to tap opportunities in expanding commercial and residential demands.

With current construction efforts centred on mid- to high-range specifications, the conclusion of the LNG project’s construction in 2014 is widely anticipated to precipitate a sea change in market demand. This redress will turn the construction industry’s attention toward the middle to low-end demands.

Monday, 1 October 2012

Eaglewood Announces Trafigura Pipeline and Facilities MOU



CALGARY, ALBERTA--(Marketwire - Oct. 1, 2012) - Eaglewood Energy Inc. ("Eaglewood") (EWD.V) is pleased to announce that it has signed a memorandum of understanding ("MOU") with Trafigura PTE LTD ("Trafigura"). Under the terms of the MOU the two companies will work together with a view to jointly finance, construct and operate a condensate processing facility and pipeline in the Western Province of Papua New Guinea (PNG). The processing facility will be located adjacent to the Ubuntu gas condensate discovery in Eaglewood operated PRL 28 and the pipeline will deliver condensate to Drimdenasuk on the Fly River where it will be exported by river tanker.

The Ubuntu discovery lies in close proximity to other gas condensate discoveries at Elevala and Ketu. The proposed processing facility and pipeline will have the capacity to process and transport condensate from these fields, with further ability for expansion to handle any additional gas condensate discovered on Eaglewood's PPL 259. Eaglewood has lodged Processing Facility (APPFL 3) and Pipeline (APL 9) Licence Applications, which were gazetted by the PNG Department of Petroleum and Energy on June 8, 2012, and are currently being processed.

Completion of binding agreements are subject to regulatory approvals, including the grant by the PNG Minister of Petroleum and Energy of the processing facility and pipeline licences and Trafigura and Eaglewood agreeing to mutually acceptable terms on the ownership and financing of the pipeline and condensate off-take terms.

Commenting on the MOU CEO Brad Hurtubise said: "We are very pleased to have reached this milestone and to be working with one of the world's largest commodity trading companies. Trafigura has significant global experience in the financing and ownership of oil and gas infrastructure and in the trading, shipping and storage of hydrocarbon products. We value their experience and capability and look forward to forming a lasting working relationship with them. Since we discovered the Ubuntu field in 2011 we have been working towards the earliest possible commercialisation of the field, and this MOU is a significant step towards achieving this goal and kick-starting oil and gas production in the Western Province of Papua new Guinea."

Eaglewood is a junior Canadian oil and gas exploration company that trades on the TSX Venture Exchange under the symbol "EWD".

Trafigura is one of the world's leading international commodity traders, specializing in the oil, minerals and metals markets, with 81 offices in 54 countries in Europe, Africa, Asia, Australia, and North, Central and South America.

Trafigura's primary trading businesses are the supply and transport of crude oil, petroleum products, renewable energies, coal, refined metals, ferrous and non-ferrous ores and concentrates. It is the world's second largest independent non-ferrous trading company and the third largest independent oil trader.
Founded in 1993, the company is owned by its founding shareholders and senior management. It has achieved substantial growth in recent years, growing turnover from US$18 billion in 2004 to US$122 billion in 2011. For more information visit www.trafigura.com.

Forward-Looking Statements
This document may contain "forward-looking statements" within the meaning of Canadian securities legislation. These forward-looking statements are made as of the date of this document and Eaglewood does not intend, and does not assume any obligation, to update these forward-looking statements, other than as required under Canadian securities legislation.

Forward-looking statements relate to future events or future performance and reflect management of Eaglewood's expectations or beliefs regarding future events. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Eaglewood to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to changes in project parameters as plans continue to be refined; future prices of oil and gas; accidents, labour disputes and other risks of the gas and gas condensate industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in Eaglewood's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at www.sedar.com. In particular, this press release contains forward-looking statements including, but are not limited to, statements with respect to the approval, construction, operation and capacity of a condensate processing facility and pipeline; participation in any such facility and pipeline by other unrelated parties, and potential discoveries on Eaglewood licences. Although Eaglewood has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Accordingly, readers should not place undue reliance on forward looking statements.