PRIME Minister James Marape told the 2024 PNG Resources and Energy Conference in Sydney that PNG will overhaul mining and petroleum laws and eliminate contract negotiations as part of government reforms.
Mr Marape announced a sweeping reform of the country’s resource sector and introduced a fixed benefit-sharing structure enshrined in law that will come into effect by September 2025.
He said, “This eliminates the current system of negotiated contracts, potentially impacting existing and future projects, and creating both opportunities and challenges for investors.”
And he added that consultations with stakeholders will begin early next year.
“As we stand on the threshold of 50 years of nationhood, I would like to make this my contribution to Papua New Guinea – a new mining and petroleum regime that will be written into the PNG legislation. No more state negotiating team,” he said.
“No more negotiations preceding contract signing. All mining, petroleum and gas companies should be aware of this redirection by now.
“This will be the benefit structure where your take, the national government take, provincial government take, and landowners take will be clearly defined in law. Early next year, the Department of Mining & Petroleum will be led by the Department of Prime Minister & National Executive Council to consult with PNG CORE to make these legislative changes in time for September 2025.
“I would like to make a formal announcement to the country on these changes and new benefit-sharing arrangements on 16 September 2025, our national day.
“It will be a wonderful, fitting gift to our people on their 50 years of Independence anniversary – that from then on, they will automatically be compensated EQUITABLY for their resources,” Mr Marape said.
“We want to review and reform the petroleum and energy regulatory regime, as well as the Mining Act of 1992, which has served us for over 32 years, and reviewed since 2009. Let me give some notes on this.
“There are two schools of thought emerging on the structure of this new, upcoming regime: 1. Outright Production-Sharing and 2.
A hybrid between the current regime and production sharing that has PNG characteristics, where the PNG characteristic will include acknowledging landowners.
“PNG CORE will have to seek views on how this hybrid can be done. How do we pay respects to our landowners so that they participate meaningfully in the resource harvest – whether in royalty, equity, or in business development opportunities?
“Ladies and gentlemen, I have been a part of negotiations with investors for a long time, long enough to realise that we cannot continue to leave mining and petroleum (or any major resource) negotiations that makes up the composition of the Mine Development Contract open to vulnerability – at the hands of a State team, even if that team has the direct oversight of the Prime Minister.
“Our people’s benefits must not only be clearly spelled out, but they must also be grounded into law – in both the Mining Act and the Petroleum Act, or any relevant resource laws."
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