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26 January 2017


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Recently I came across evidence of my only flutter on the stock market - two April 1987 Sell Share documents.

I sold my 10 toea Oil Search shares to help fund the purchase of Jim White’s old store in Taskul. I received a whopping 97t a share which I had purchased while working in Tari for about 24t.

When I had first phoned the broker in Queensland he asked me if I knew something about a good discovery or did I have any other inside info of the drilling that was going on out in the bush.

I was unable to offer him any snippets of what was soon to become PNG’s foremost resource discovery.

Notwithstanding, smugly, two years later, I pocketed my 400% profit. Oh how the proud are fallen. If I had the same shares today they are worth K17 each - ‘Mea Culpa!’

Since 2014 there have been approximately 300 shipments of LNG with each cargo worth US$ 50 -60 million a ship.

The US$19 billion project is expected to last at least 30 years from something like 9 trillion cubic feet of gas, initial reserves producing something like 7 million tonnes of LNG annually.

I wonder why the project had to tax exemptions to access that massive pile of PNG’s natural resource. Especially as Exxon, the largest of the oil companies, with its Chairman ExxonMobil chairman Rex Tillerson now in President Trump’s cabinet.

According to CNBC, Exxon had profits of US$111.65 billion in 2013 with capital expenditure of US$38 billion in 2014.

As far back as 2006, The Times reported Exxon was first company to achieve sales of US$1 billion a day. Certainly not a beggar needing handouts from any government especially as accessing the PNG LNG is considered to be cheaper than exploiting some other fields.

But of course its partner Oil Search’s future is not just LNG in Hela because both are tied into the next big producing field expected to be managed by Total.

The giant USA firm is hoping to get its hands on other gas fields even tapping the Western Province’s gas into its existing pipeline system.

The government seems to have disregard for the people of the impoverished Gulf and also those in the huge neighbouring Western where both provinces would prefer to have standalone projects to allow better development for their people.

Mind you that seems par for the government’s responsibility to its rural citizens.

Recently there was an article in the Post Courier of someone's trip home to the Pimaga area. Apparently the further from the Okuk Highway, which has its own funding crisis, the worse the state of the road became.

The writer asked a question what had happened over the decades of Kutubu oil then gas. Where had the Tax Credit monies really gone?

Or there is the ongoing load shedding problems of the capital which a writer claimed could be solved by the use of a minute 0.005 of the LNG Hela reserves.

Recall in early 2007 a report of Hides Gas, PNG Power signing a deal with the land owner company, Hides Joint Venture Limited for a major rural electrification project to supply electricity to most of the districts in the Southern Highlands Province.

Yet ten years on read of villagers living under pylons taking electricity to the Porgera mine while they live with their kerosene lamps as they have done for a lifetime.

Baruni villager asking for attention to their roads so near to the NCD hub.

The people around the project’s Komo airfield are still waiting for the government and the companies to open it to non-project commercial aircraft use.

When will the Sovereign Wealth Fund start? I naively expected it to begin with the first shipment of the LNG but legislation wasn’t even ready then. Only July last year did parliament give approval for it.

Apparently administration activity by the public service is proceeding well and an independent and reputable firm is searching for potential candidates as chairman and members of the Sovereign Wealth Fund board - at least that was his message in October. Surely the elites are not waiting for the outcome of the General Election.

We mere mortals are generally awed by the mining companies, their lobbyists and politicians talking in oily-jargonese of billions, mBtu; mmbtu, mmbl; mmboe; MTPA.

But I just simply wonder why with an apparent glut in oil production and resulting lower selling price per barrel any oil CEO wants to produce more. Sort of basic 6th form economic theory of supply and demand which we once were taught.

After all the stuff has been in the ground for millions of years a decade or two won’t matter. Even in Wales it’s time to frack off.

What about the next invasion this time of Total's French families coming soon to exploit the Gulf LNG with refinery in Moresby against will of the Gulf people.

Imagine Kerama, Kikori or even Baimuru being the site ... what a boost for the impoverished province and its people with the infrastructure it would entail. Might even make proper road to Moresby from the Gulf.

Housing could thus be kept cheaper in the capital as you suggest as instead new homes would be built near the site of the new refinery and its ancillary developments.

But I guess that's why our elites want it in Moresby to protect their investments there in real estate.

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