PNG LNG | Do You Know ExxonMobil Can Recover Development Cost Under 5 Years

This analysis is based on the Prime Minister of Papua New Guinea (PNG) response to series of questions from the Opposition. Including latest report from the nation’s television broadcaster EMTV news on Liquefied Natural Gas (LNG) production in the country.

Many Papua New Guineans thought the US$19 billion earmarked for PNGLNG development was a huge investment. The amount actually spent was less.  A report from EMTV revealed that ExxonMobil saved over US$8 billion during construction phase.

To date over 42 shipments have left PNG shores.The Prime Minister, Peter O’Neill, when responding to Deputy Opposition leader questions about the shipments of LNG products, said a shipment was valued at US$50, 000, 000 on average. 

Expenditure margin has been reduced when ExxonMobil moved from development to production. Perhaps it is important to consider the savings of US£8 billion - a savings of 30% . Another good news for shareholders is that the company is likely to recover all the development costs – US$11 billion – in just 5 years.

For clarity: if 42 shipments worth on average US$50 000 000 each, ExxonMobile has made US$2.1 billion in six months. Double it to give US$4.2 billion in one year. So, in 5 years if oil price averages at the current rate, the project would have made US$21 billion.

So what does that mean? That means that the every shareholder would enjoy the fruit of their investments. What is not so right is the fact that PNG Government has borrowed heavily to partake in this business.

So, who is going to benefit from PNG LNG project?

Alternative PNG Prime Minister | Will Peter O'Neill Be Forced to Step Down?

L-R: O'Neill, Parkop, Kua, Namah [Google Images]

In light of the recent developments (referral of Prime Minister Peter O’Neill  to the Leadership Tribunal and pending arrest warrant for criminal charges), there may have been internal forces emerging, mounting and drumming up for who should take over the leadership into the 2017 election or until PO is cleared.

The most probable event will be that the PM will not step aside, unless asked to, as documented in his press release. But, his latest referral and pending criminal charges may have already created frictions within his regime resulting in breakdown in the Coalition Partners. 

Signs of disagreements were evident when Mr O'Neill sacked Sinesine-Yongomugl MP Kerenga Kua and Kandep MP Don Polye, two senior members of his cabinet. Other senior members are also not at ease, yet too afraid to  speak up unless opportunity presents itself. Hence, a change of leadership within PNC party or coalition partners is inevitable.

Either way, the government MPs (including those of the ruling PNC party), the middle bench and opposition may have to think strategically if the unexpected happens. They must think about the best way forward if (and when) Peter O’Neill is forced to step aside.

If he is pressurised from within his government or from the masses or by a Leadership Tribunal, most likely he would relinquish the prime ministership to another PNC member. Government MPs who can act sensibly and responsibly can regroup to change the leadership. In the best interest of the nation, a change must be without destabilising economic, political, social or any development. What is important here is stability and good governance.  

The opinion widely held by the public is that there is no one credible person/MP in the ruling PNC party to take over the prime ministership.

The 'would be' candidates may include:

1. Leon Dion – was made a deputy PM under the circumstances and not someone vibrant enough and decisive to lead.

2. Nick Kuman - who is rather soft and out-dated (not vibrant and dynamic),

3. Richard Maru - may be an enterprising state minister but may not master the parliamentary support for leadership.

4. Other PNC members including Marape, Zeming, Pato, etc are all rudimentary and not so prominent and promising candidates for PM.

Other coalition partners:

1. Ben Micah - has the popularity but diluted and disgraced himself on many fronts and further, he is a PPP man,

2. Bire Kimisopa - his leadership is diminished when he has been numb and dumb on issues of national concern and corruptions. He is lately trying to create media attention but he is already written off in the minds of the people,

 3. Don Polye - his party has been fragmented and destroyed. To regroup and re-gather has to be a move from not only his party but has to be supported by majority of the ruling PNC party which is highly unlikely, 

4. Patrick Pruhaitch – his integrity is already tarnished, not a decisive leader.

5. Kerenga Kua – though he is not a party leader, he briefly displayed maturity and confidence. Thereafter he has disappeared from the scene. He is credible but needed to do more to earn the parliamentary support,

6. Former  PMs are all back sitters

7. Powes Parkop - he is enterprising, innovative and serving backed by his vision. PP only problem is his close alignment with PO which he got mud over his face. Secondly, PP’s party in the government is minority. He really needed to persuade the ruling PNC party to back him if he ever needed to become the PM.

Opposition Members

Belden Namah, Sam Basil and Allen Marat are credible and prominent, principle-driven and unwavering. The Opposition Leader is no nonsense, firm, bold and is still a credible material for prime ministership. The only problem here is no government MPs would want to join the opposition.

Potential prime-ministerial candidates to take over from Mr O’Neill  are Powes Parkop, Belden Namah, and Kerenga Kua. 

Within the coalition political parties NCDC Governor Powes Parkop remains to be a better candidate for prime minister leading to 2017. 

- Guest Article, Adapted -