Opposition Challenges PM Over BILLIONS Linked to Kroton Equity

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[00:00:00]Honorable member of the Shinana Shinana Young able.

[00:00:02]>> Thank you, Mr. Speaker.

[00:00:04]We plan opposition this plan money we play like asking some more question in Golo.

[00:00:09]Prime Minister some black clarity blow decision NEC working blow this slide additional 4.22% equity low Croton.

[00:00:21]Um Number one question and all same inside low UBSA agreement low clause six uh price blow this slide additional equity 4.2% or fixing finish.

[00:00:37]Price them US 200 40 million kina per 1%.

[00:00:46]So low this slide 4.22 price blame by go close to or go up to see him 1 billion US dollars.

[00:00:54]Slightly up to see him.

[00:00:56]But round him go low US 1 billion dollars.

[00:01:00]And price is start inside, but NEC decision and talk all must negotiate low price can.

[00:01:07]So question and all same why not price the agreed beneath all get our stakeholders all sign off beneath?

[00:01:14]And miss the up Nah this black cabinet decide low rejecting this black contractual agreement price agreed price of 240 million US dollars per 1%.

[00:01:36]Um number one question so I I need low clarifying this slide.

[00:01:41]Uh number two question I mean all same.

[00:01:50]Um All creating one plus special purpose vehicle low in this law.

[00:01:58]Uh 4.22% equity law benefit law.

[00:02:02]All I dream you lost line.

[00:02:05]All I dream you lost line.

[00:02:07]Now this law SPV all like him all politicians manage him.

[00:02:18]Manage him this plan.

[00:02:20]And one black concern you mean this law involving big plan money.

[00:02:26]We play got big black concern and money blow people blow place.

[00:02:31]You mean need low take care time you may mark him all man low mark him all man low place. Now put him assets blow low hand ball people low manage him.

[00:02:41]You mean politician you mean no got sour low investment low big plan money.

[00:02:46]Big plan uh investments.

[00:02:49]Now how low redeem all financial statements?

[00:02:53]Also something or sour man or school or this law plan you got experience or sour.

[00:02:57]So why now create him special purpose vessel vessel which might be itself okay but put him all man by go pass.

[00:03:08]Put him all politician you go inside.

[00:03:11]He got all money got investment analysis analyst investment managers all this law line all this stuff.

[00:03:18]Why not mark find him all this law line up put him all low control him this plan.

[00:03:23]This plan investment blow all people all blow place rural areas.

[00:03:27]You mean mark him all.

[00:03:29]Why now you mean put him risk he come inside low this law decision not all politicians by all manage him this law.

[00:03:35]Um look out him.

[00:03:38]And question number two.

[00:03:40]Question number three him all same.

[00:03:43]Uh now me like him minister blow um securities commission honorable uh Richard Maru. I think securities commission is up on in it law, honorable Richard Maru. Me like him and take note of this a lot too.

[00:03:58]I need it to portfolio of blame also a license him all investment managers law managing all securities such as this is like I know shareholding.

[00:04:07]Involving big plan money.

[00:04:09]Now >> [clears throat] >> Securities Commission is a glass him go through not pick him all man. He got good black experience, good black qualification. He got good black hour hollow manage him all investments.

[00:04:21]Now all this I give him license. So this is like I am people all this stuff. All calling all investment managers. Now all same license low Securities Commission.

[00:04:30]Why not this black government do the responsible thing not put in this black investment you go low and low all properly licensed investment managers.

[00:04:42]Why not make him all same? Why not take the risk with politicians? You mean you got one black good black track record for managing nothing, zero.

[00:04:51]I'll say that me got big black concern because you know money blow businessman or salary man or all all line is up low even send us this is a money blow line low rural areas all line blow house line straight.

[00:05:03]We owe them a bigger fiduciary duty.

[00:05:07]When we make decisions affecting their money, their investments or >> [clears throat] >> I think Prime Minister need to give us assurance confidence that decision is headed in the right direction. Suppose no got all need to revisit him now reformulate him this law decision so that you may strong in this law investment law benefit blood place line. Thank you.

[00:05:30]>> Honorable Prime Minister >> All right, thank you Mr. Speaker.

[00:05:35]Uh me like to thank you long member belong Simbu Simbu.

[00:05:40]You are going to walk low ask him uh three black uh important question. I'll try it my best to keep it short in the interest of uh to respond to other questions, to ask other questions.

[00:05:52]Uh the 4.27% uh to be carved out from uh uh Kumul Petroleum share in PNG LNG was a decision that preceded even before Kumul Petroleum itself was established.

[00:06:07]Uh in 2009, uh this parcel of shares was earmarked to be given to not just politicians or not politicians, but to the five provincial governments that is headed by this the five governors of these provinces and to the landowners from PDLs, landowners from pipeline, and landowners from the plant site.

[00:06:34]And so, this decision was a decision created by uh government policy uh in 2009.

[00:06:43]Uh and so, it is not an act done by law, but a government policy decision.

[00:06:48]Uh that was embedded in the UBS A agreement signed at Kokopo.

[00:06:54]Mr. Speaker, 2014, the then government never gave the landowners and the five provinces an opportunity to exercise their right of purchase.

[00:07:10]No right whatsoever was given to them.

[00:07:14]Uh and we've now lived on 11 years.

[00:07:18]And uh 11 years from 2014, the PNG LNG is debt free.

[00:07:27]11 years from 2014 first gas, Kumul Petroleum have subsumed the 4.27% value.

[00:07:37]And total funding that has now gone to Kumul Petroleum Limited has over 12 billion kina.

[00:07:47]From 2014 to 2026 at present or last year ending the financial year that ended last year, the project PNG LNG all in all retired 70% of the cost of the project that was bank financed by over 20 global financial consortium that financed the project.

[00:08:11]The $240 million per share uh price tagged for 1% of share that uh would cost uh the landowners and provincial government to acquire that 4.27% included that 70% bank finance element.

[00:08:30]So, if you deduct that 70% off from that 400 uh I beg your pardon, 240% uh dollar one share, you do your calculation, landowners and the five provincial government would have paid 30% of that $240 million. So, those calculations So, those calculations and opportunity would have been given to them at 2014.

[00:08:55]On record, uh the two governments that has presided since 2014 to 2026 have not given them the opportunity to exercise that right.

[00:09:07]And so, we're doing what is rightful.

[00:09:10]This 4.27% was secured as a project security policy by the National Alliance led government in 2009.

[00:09:20]And so, that decision was taken.

[00:09:23]Uh it is in calculation of value of time loss.

[00:09:30]So, $1 billion worth of purchase the landowners would have exercised with the five provincial government, no opportunity was given to them to raise funds to purchase that 4.27%.

[00:09:47]>> We have a point of order.

[00:09:49]Honorable member for Sinasina >> Yeah, um >> [clears throat] >> I would like to remind the Prime Minister that in the very cabinet decision I'm talking about, there were two previous NEC decisions that dealt with the issue of the exercise of that option by the beneficiary group, uh which was never implemented, but the decision two decisions were taken, and those two decisions were repealed in the decision and the current NEC decision which I'm talking about. So, it's not as if no opportunity was given, it was given by two NEC decisions, not exercised.

[00:10:28]>> Honorable Prime Minister >> Mr. uh Speaker, uh the two NEC decisions my Leonard, uh member for Sinasina Yonggomug, is referencing was not explicitly labeled that landowners exercise your right at the date. They were to have exercised their right in 2014.

[00:10:50]I just wish the member for Sinasina Yonggomug, then as Justice Minister, would have advised the Prime Minister then that this new date has arrived, let's advise the five provinces and the landowners to exercise their right.

[00:11:08]>> Honorable member for Yalibu-Pangia, what's your point of order?

[00:11:11]>> Uh point of order is that, you know, Prime Minister is uh continuously misleading Parliament on this particular subject as he does with many other issues, sidestepping and debating.

[00:11:24]Now, Mr. Speaker, he knows and I know and even the landed member for Sinasina knows, and most other senior members of parliament know in the UBS agreement it specifically states it wasn't just signed and given by the state.

[00:11:43]It was agreed by all parties, land owners and provincial governments.

[00:11:47]Agreed by all parties that they will pay I think US 240 million kina per share.

[00:11:54]Pay a 1% share.

[00:11:56]Now, in 2014 with which he was part of the cabinet we made a decision realizing that the land owners and the provincial governments could not afford it.

[00:12:07]We discounted to 100 150 million US dollars per share.

[00:12:12]We discounted. Yes, I'm trying to give you a background so you understand that your prime minister is misleading you.

[00:12:20]Now, Mr. Speaker Mr. Speaker >> [clears throat] >> Honorable member >> Mr. Speaker >> Honorable member for Ialibu-Pangia >> This is an important issue, Mr. Speaker.

[00:12:29]>> Honorable member for Ialibu-Pangia >> to let the nation know the truth.

[00:12:34]>> Honorable member for Ialibu-Pangia, what is your point of order? You're you're already >> My point of order is that opportunity >> have a grievance debate later after question time so you can >> opportunity >> raise it as your >> Yeah, opportunity, Mr. Speaker. If you allow me to finish, we'll get over this very quickly.

[00:12:51]The opportunity to exercise that right was open since 2009.

[00:12:58]Always there. Nobody was stopped from going to raise 240 million US dollars or discounted 150 million US dollars per 1% share to buy.

[00:13:08]He knows that. I know that. Everybody knows that.

[00:13:11]Now, today he's going to tell the people of this country what is the decision of NEC. Is he free gifting these two these five provinces and the land owners at the expense of the entire nation.

[00:13:23]That was not the intention of the Somare government or our government, Mr. Speaker.

[00:13:29]That is the truth and you need to tell the truth.

[00:13:33]>> Honorable Prime Minister >> Mr. Mr. Speaker, I wish he had the same zeal and energy for the landowners in 2014.

[00:13:42]He never until he was reminded our cabinet decision he presided over discounted 600 million kina.

[00:13:49]This 100 600 million kina off and that's one of the cabinet decisions that uh our good member for Sinasina Youngugl is making reference to.

[00:13:57]But on record since 2014 when the due date arrived that government never gave an opportunity to the landowners to exercise their right whether they can afford or not is another matter and opportunity.

[00:14:12]Central Province, Gulf Province, Hela Province, Southern Highlands Province uh Western Province the provincial governors are already present in subsidiary companies like Kutubu Petroleum Resources Authority Gobe Petroleum Resources Resources >> [snorts] >> Moran Petroleum Resources. The provincial governors already there by virtue of fact that they are there as important stakeholder representing the province to collect revenue also for the province as well as the landowners represent themselves to collect for the landowners. That's why provincial governors sit in those companies to make decisions for the rest of the province.

[00:14:55]Mr. Speaker the landowners and the five provinces were not given a right an opportunity to exercise their right to engage in the purchase of these shares in 2014.

[00:15:11]We saw in 2014 decide to mortgage an asset for the Oil Search Sale purchase that the former Prime Minister very much know about the transaction between UBS and Oil Search.

[00:15:26]That parcel of sale was used in the entire Kumul petroleum asset for the transaction and no opportunity was given to the five provinces and the landowners to exercise their right.

[00:15:40]Now, 2025 or 2026 the entire 16.57% including the 4.27% has been used by Kumul petroleum up till this date.

[00:15:57]Totalling over 12 billion kina already received by Kumul petroleum and the member for Hela province has asked for full report to be tabled. We will be tabling full report to this house for this house to understand what has happened in the total earnings from Kumul petroleum to date.

[00:16:13]Mr. Speaker rest of money you make kissim finish country kissim finish.

[00:16:20]What's wrong with the talk? Thank you behind talk talk papa sumare.

[00:16:25]You blow your sunny project now let him fight him up.

[00:16:28]The five provinces represented by the governors and the landowner representatives sitting and I want to give assurance to the honorable member for Hela province.

[00:16:38]Your people is featured in this featured in this in this agreement.

[00:16:43]It is an interim structure. The SPV is an interim structure. Look at that cabinet this one says interim structure till the five provincial governors and the landowners themselves sit and decide what to do with it.

[00:16:58]If you understand the word English, I'm not an English student but >> Honorable member for Hela province, what's your point of order?

[00:17:06]>> Speaker, the Prime Minister makes reference to the people of Hela province or Central province and landowners being part of the decision.

[00:17:14]They are.

[00:17:16]I'm not saying they are not. I'm saying that 2 years period and could come back on every 4 years is not equitable, not fair. That's what the point was. Not about um they are not participating. 4.27% 13.5% of 4.27% equates to about 550 million kina worth of interest in that asset. That is a con- significant amount of investment or entitlement by contract under the UBS SA agreement 6.32.

[00:17:51]And it's laid out there, Mr. Speaker.

[00:17:53]So, let's not belittle the issue.

[00:17:57]The people of And well well on this point, the people of Hela province and the plant side land owners never gave consent for their interest to be dealt with in the manner that it has been under in the NEC decision.

[00:18:10]>> No consultation No consultation was taken at all.

[00:18:13]>> Honorable Prime Minister, are you ruling, Speaker, with greatest respect? Are you ruling the point of order Are you in order or out of order, please?

[00:18:22]No, you don't force the Speaker to rule whether it's in order or not.

[00:18:27]Prime Minister, you go ahead and answer him.

[00:18:29]Question by you.

[00:18:30]>> All right, Mr. Speaker. I I want to uh uh I want to uh maybe in the interest of time and and to the to the the beneficiaries, the provincial five provincial governments, and the land owners in the five provinces.

[00:18:44]This is a interim special purpose vehicle.

[00:18:47]Uh you yourselves will decide. We'll facilitate what you want to do with this one.

[00:18:52]You want us from government policy, we want it to be a uh perpetual wealth for the five provinces together, structured in a manner in which the fiduciary standard uh that's required of uh such public companies be established, run properly, and wealth generate perpetually in a uh sovereign wealth fund sustainable manner sort of set up and structure that we want to deliver for the five provinces and the 60,000 land owners that is covered under the PNG LNG uh area project areas. So, it's meant uh meant well. I want to ask the five provinces. Uh it doesn't hurt for the five governors to sit together, look into this cabinet uh decision for and on behalf of our people, and advise government again what you want to do.

[00:19:36]As simple as that. It's about time we distance this asset from PNG LNG.

[00:19:42]It is meant for the five provinces and the land owners there. Central land owners, Gulf pipeline land owners, Southern Highlands pipeline land owners, Hela pipeline land owners, Western Province.

[00:19:52]And of course, the five provinces. So, it is a interim arrangement, uh SPV set up, and eventually it must be dis- uh detached from uh from Kumul, going to a company.

[00:20:05]And that company runs uh and earns the money and runs it for and on behalf of the trustee and the beneficiaries of uh of of of those trustees concerned. So, Mr. Speaker, uh I I know the uh member has intended well and asked me this question.

[00:20:21]Uh I will get the questions uh properly answered in a written reply to him for him to fully understand the uh the discussions that we're making here, the reply I'm making. Thank you, Mr. Speaker.

[00:20:31]>> And and one final