PNG Energy – Stronger Together, Investing for the Future
Good morning ladies and gentlemen,
I acknowledged the presence of the two Prime Ministers and Distinguished guests.
Last week MRDC celebrated a milestone when our company turned 50.
MRDC was incorporated in 1975 as an exploration company, which later evolved into a State Nominee, holding State equity interests in both Mining and Petroleum projects.
Through policy changes, MRDC today is a State owned company managing landowners’ and respective provincial governments’ equity interest in resource projects.
These include Kutubu, Moran, Gobe oil projects, the Ramu Nickel, the Ok Tedi and Porgera Mine and the PNG LNG Project.
MRDC manages 14 subsidiaries and 7 investment companies, whose combined asset value stands around K14 billion today from K250 million 20 years ago. It’s grown 65 times.
Reflecting back on the last 50 years we have learnt that royalties and dividends from projects alone is not a measure of success and has not translated to improvement in health, education and other social indicators for the landowners and the host province, but has become a resource curse.
The missing link is genuine partnership, participation and collaboration with the State, the host PG, LOs and Operator to foster long term positive impacts to the communities, provinces and the country. There are 3 examples that stands out.
Oil Project
MRDC’s partnership with Santos Foundation, the 3 PG of Hela, SHP and Gulf (who are host oil provinces) with the respective PHAs have seen remarkable progress in the Health Sector in delivering quality health services to these provinces.
Being the Chairman of the 2 of the PHA where Santos Foundation is a part of in terms of the technical and strategic advice to the Board, I have seen first-hand the positive impact of the sector as a result of improved governance, compliance and greater accountability to the management of PHA when you bring private sector experience to the Board.
Last year’s improved ranking of Hela PHA to number 4 and SHP PHA to number 2 in the country is a testimony. Gulf has also shown remarkable improvement in last 10 months, winning a World Bank award for being top improver in Antenatal Care.
PNG LNG
ExxonMobil – MRDC recently signed an agreement with Hela PG and ExxonMobil to deliver 5MW of low cost power to landowners in Hides and Hela province. Work has commenced and will completed in the second half of 2026. ExxonMobil will supply cheap gas and generate power. MRDC using its CITF funds will build power lines and distribute power to ensure all households in the project area is connected. Hela PG will be redistributing to the rest of the province.
Imagine the impact of lightening up homes of 50,000 landowners, schools, health centres and SME with cheap and reliable power for the first time. This partnership will transform our landowners and the province, when you compare it to monetary benefits received over the last 10 years from the PNGLNG project.
OK Tedi Mine
OTML has the best model in the extractive industry when it comes to landowner participation and empowerment. Besides the traditional contracts such as security, catering, and other small scale service contract, OTML has raised the bar by leasing all light vehicles in the mines, and have extended the ownership of the heavy duty gigantic mine fleets to landowner companies.
Recently, OTML agreed to lease 3 brand new ATR 72 aircrafts owned by landowners. The collaboration between MRDC and OTML in providing guarantees have propelled national content to a different level.
In conclusion, one thing I have learnt in the last 50 years in any resource development in PNG is that Governments change, Governors Change, even project operators change, but only one thing that remains constant is Landowners. It doesn’t change, it just passes from one generation to another. That’s why partnership that is built on mutual respect and trust centred on LOs will always stand the test of time.