MRDC says no risks with its venture in offshore gas project

Former Minister for Petroleum and Energy Kerenga Kua has come under criticism from the Mineral Resource Development Company.

The company who manages landowner funds from mining and petroleum resource projects has accused Kua as a former minister who withheld the licence for the offshore Pasca A gas project for reasons only known to himself.

Mr Kua has alleged that the  joint 50-50 gas participating interest in Twinza’s Pasca A project has risks and landowners could lose huge sums of money.

The agreement further binds MRDC and Twinza to work together, acquire and develop future oil and gas opportunities in Papua New Guinea.

MRDC will need USD$160 million to be partners with Twinza and in kina would be around K617 million.

Mr Kua has said MRDC holds monies for land owners in trust funds and the recent venture with Twinza many be risky alleging Twinza has not received a petroleum development licence yet since lodging its application in 2008.

The petroleum resources advisory body has not approved the application for a petroleum development licence yet for Twinza and Kua argues, if they rejected it, the landwoners may lose huge sums of money.

Mr Kua alleges MRDC does not have reputable fund manager.

But MRDC in a statement says it does not bear any financial risk (no payments required) until a Gas Agreement is established and it has conducted two independent valuations by two international reputable firms, both confirming the project's quality, feasibility, and profitability.

The company has accused Hon. Kerenga Kua as the longest-serving minister, yet he neglected to implement policy and legislative reforms aimed at enhancing and reshaping the landscape of landowners' and provincial governments direct and indirect equity participation.

It says the Twinza acquisition of  (50%) by the group on commercial terms signifies a shift from the existing status quo.

It further says Gulf Province stands to benefit immensely from its significant role in the Pasca Project.

The Gulf Provincial Government has secured a 10% carried interest in Heheve Ltd, the company that is participating in the Joint Venture.

The Gulf Provincial Government and its beneficiaries also hold indirect interests through its involvement with Petroleum Resources Kutubu (PRK) Gas Resource Pipeline Limited, and Petroleum Resources Gobe (PRG) all shareholders of Heheve.

MRDC says the additional benefits Gulf Provincial Government will derive include royalties and development levies. 

These benefits will pave the way for sustained economic development within the province.

The Pasca A offshore gas project will create 500 permanent jobs and bring in about K30 billion  and K15 billion as revenue during its lifespan.

It’s now into its FEED stage, or Front End Engineering and Design.

It's located 90 kilometres south from the most southern tip of Gulf Province.