The Mineral Resources Development Company (MRDC) confirms that the Bank of Papua New Guinea (BPNG) has released accrued royalty payments for PNG LNG Project area landowners into their respective Trusts, which MRDC manages.
MRDC is mandated under the Oil & Gas Act to manage benefits for project area landowners in petroleum projects across the country.
Under the Umbrella Benefits Sharing Agreement (UBBSA) reached in Kokopo prior to the commencement of the PNG LNG Project, royalty benefits are paid to the Government (into a trust account held at BPNG), which then releases the funds to the main beneficiaries — landowners (70%) and the provincial and local-level governments of Hela, Southern Highlands, Gulf, Western, and Central Provinces (30%).
In accordance with the Oil & Gas Act and the 2009 benefits-sharing agreement, royalty and equity benefits for landowners are distributed under the 40:30:30 formula, where:
● 40% is paid as cash benefits to beneficiary clans,
● 30% is invested in the Future Generation Fund, and
● 30% goes into the Community Infrastructure Trust Fund for social development projects.
MRDC Managing Director and CEO Mr. Augustine Mano, CBE, welcomed the release of the royalty benefits.
“The release of the royalty payments is great news for landowners. The early release of these benefits to a number of these groups had been delayed by clan disputes and court cases,” Mr. Mano said.
“For Hides PDL1 landowners, this is timely. MRDC will proceed to complete the clan bank account opening and director elections exercise so payment can be made before the end of the year.
This exercise commenced in April 2024 but was suspended due to a restraining order obtained by a party. This case has now been resolved, and the restraining order lifted, clearing the way for us to resume.”
For Hides PDL7 landowners, royalty benefits for 2014–2021 and equity benefits for 2014–2017 have already been paid. Their royalty (2022–current) and equity (2018–current) benefits will now be released following this latest transfer. This also includes the Pipeline and Plant Site landowners.
However, royalty and equity benefits for PDL2 (Kutubu) and PDL3 & PDL4 (Gobe) will be withheld pending the resolution of ongoing disputes.
Following the opening of the new MRDC Office in Tari, Hela Province, last Friday, Mr. Mano announced that all royalty and equity benefits processing for Hela landowners will now be handled in Tari, rather than Port Moresby.
“I want to encourage all landowners and their clan leaders who are in Port Moresby to return home. We now have an office in Tari. Cooperate and work with us on the ground for the benefit of everyone,” Mr. Mano urged.
The Account Opening and Directors Elections Process for Angore (PDL8) landowners will commence immediately after the PDL1 exercise is completed, while a Ministerial Determination is pending for the landowners of Juha (PDL9).