Papua LNG: Gulf Locks the Deal, Leaves Its Clans Fighting Over Crumbs

by PAUL L. KEBAIJA

Gulf Province has signed the agreement that fixes how much of Papua LNG's royalties, equity and development levy it will share with Central. It did so before anyone has settled which Gulf clans are entitled to that money. Petroleum Minister Jimmy Maladina called Thursday's Tier 1 signing a major milestone. For Gulf's landowners it is a ceiling.

Tier 1 is not a side deal. Under the forum's Operational Rule No. 1, no Tier 2 to Tier 5 allocation could be negotiated until the facilitators declared Tier 1 settled. The split it records becomes the common allocation framework for royalty, equity and development levy in every tier that follows. Every kina the Gulf clans fight over in the coming weeks has already been sized by this signature, and Gulf's landowner representatives sat on the provincial negotiating team that agreed to it.

Gulf went into those talks with a hard position. On 15 September, Acting Governor Morris Taudevin told the forum the province's technical assessment supported a 95–5 split "at the state level", and called that figure final. The Director's Tier 1 proposal offered Gulf 70–30 on legislated benefits and 80–20 on negotiated benefits, from a package Central's governor Rufina Peter put at K6.6 billion. Central countered with 55–45. Whatever number Gulf accepted, the gap between "final" and signed measures what the province gave away.

Taudevin also drew a line on welfare. Gulf would make no formal submissions until Waigani and the National Petroleum Authority released K30 million in promised participation funding and fixed allowances, meals, accommodation and medical care for landowners camped in Port Moresby, where he reported deaths and ongoing illness among participants. Nine days later Maladina confirmed the forum had received 35 position papers, including Gulf's, and thanked the provinces and landowners for cooperating "despite welfare challenges". On the public record, Gulf dropped its own precondition within a fortnight.

The timing makes that harder to excuse. The State needed this forum finished far more than Gulf did. The Elk-Antelope retention licence, PRL15, expires on 30 November, and the revised gas agreement signed on 27 August sets 15 December as a "drop-dead" deadline for a final investment decision. That same revision handed the developers conditional incentives worth US$1.95 billion. Waigani has already shown that it bends under deadline pressure. Gulf signed with both deadlines still seven to ten weeks away.

The people meant to benefit remain unsettled. On 10 July the association representing all 11 clans of the PRL15 gas field reportedly wrote to TotalEnergies withdrawing their free, prior and informed consent and demanding an independently supervised process, although at least one clan chief has since distanced himself from that move. Nine tribes of Baimuru LLG are contesting the social mapping and landowner identification studies they say handed their customary land to other clans. The Purari Development Association secured a one-month injunction against the forum in July before it was overturned. None of the identification studies have been released.

The State cannot say how many beneficiaries there are. A government forum presentation, as reported by Jubilee Australia and its partners, counted more than 63,000 people in over 220 clans. The State's chief negotiator, Dairi Vele, told Business Advantage PNG the project involves between 5,000 and 10,000 people.

PNG has run this experiment before. Under PNG LNG, landowner royalties sat in trust accounts for years while clan vetting dragged on, and Gulf's own provincial government later had to chase K171.1 million in levies and royalties that had built up unpaid between 2014 and 2016. Philip Undialu, as Hela governor, warned that the same mistakes would be repeated with Papua LNG. Tiers 2 to 5 now follow that same sequence: fix the pot first, then argue over who belongs in it, on a timetable set for the State's benefit.

Maladina says the people will judge the government by implementation. Gulf's leaders should expect to be judged on what they signed while they still held leverage, and on whether they knew whom they were signing for.

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