Transcript
The Jubilee report says ExxonMobil's project has had mostly negative economic impacts for the country since LNG exports began in 2014.
A co-author of the report, economist Paul Flanagan says that on the projections of rapid growth and an influx of easy money from the project, PNG's government went on a spending spree from 2013-2015, which has since crippled the economy.
"In terms of the economic impacts, the promises of a doubling of the size of the economy, massive increases in employment and government expenditure, those items just haven't happened. Even on the measure of GDP - instead of doubling the results indicate there has been a negligible improvement and all of that has gone to the oil and gas extraction sector. The rest of the economy has actually gone backwards."
The Prime Minister Peter O'Neill used yesterday's speech at a PNG-Australia Business Forum meeting in Brisbane to respond.
He said experts aligning themselves with political interests had been continually talking down PNG's economy.
"And continue to release fake news. "And in one particular comment recently they said - and I quote - currently on almost every measure of economic welfare in 2016 PNG would have been better off without the PNG LNG Project. Now that kind of assessment is just an utter nonsense."
PNG's National Planning minister, Richard Maru, says there are some basic reasons why the project's projected revenue windfall hasn't materialised yet.
"But you must also understand, we borrowed money. The investors also borrowed. And they have to retire loans that they used to fund the project. At the moment, they've been going through that phase. While that's going on, the price obviously came right down, so that also impacted on cash flows and the profitability of the LNG business in Papua New Guinea. But the prices are going up now, and we're quite excited about the next few years.
Meanwhile Exxon has issued a statement defending the social and economic benefits it is bringing to PNG
"Nearly 2600 employees and contractors are engaged in PNG LNG production operations. Approximately 82 percent are Papua New Guinean, and 22 percent are women. In local communities, we have invested more than 246 million USD to build infrastructure, develop social programs, and implement skills training. Our efforts have a tangible and direct impact on the community."
Exxon said the project had contributed around $US4.3 billion to local businesses and the government through employment taxes, disbursements to state shareholder agencies, development levies, royalties, and petroleum license fees.
But Jubilee's report says most landowners in the Highlands project area still haven't been paid royalties or promised benefits.
According to Exxon, royalty payments due to the government have been ongoing since gas production started in 2014.
"Payment and distribution of royalties and other benefits due to landowners in the Project area is the responsibility of the PNG government."
But the issue of non payment of dues to landowners in the project's hub, around the gas fields of Hela province, remains explosive, particularly with the lingering threat by landowners to shut the project down if their interests aren't met.