Village ire over boy's death and funding closes PNG project

ROWAN CALLICK

THE Papua New Guinea government and Exxon Mobil are struggling to resolve landowner issues that have shut down construction for more than a week for part of the $16 billion liquefied natural gas project in the Southern Highlands.

Oil Search has a 29 per cent stake in the project and Santos 13.5 per cent.

The project, which has become the flagship for a massive resources boom throughout the country, is striking increasing problems in the Hides area.

The shutdown started with the death of a four-year-old boy who, villagers claimed, had eaten powder found where blasting was taking place at a quarry.

But protests over the boy's death began to involve a broad range of other issues, grievances over the project, and the failure of the government to provide promised funding. Four employees of joint venture contractors working on the site, Townsville-based Curtain Brothers and Perth-based Clough Engineering, suffered minor injuries during an attack.

As a result, acting police commissioner Tony Wagambie said extra police would be deployed to the area. The public affairs manager for Exxon subsidiary Esso Highlands, Miles Shaw, said this week that work at the Hides gas conditioning plant site would remain closed until "a safe and secure operating environment" could be restored.

Mr Shaw said the project was on course to deliver the first gas train in 2014. The next national election, traditionally the trigger for unrest in PNG, is due in mid-2012. The government sent Foreign Minister Don Polye and Education Minister James Marape, both Highlands MPs, to talk with the landowners, from whom they received a petition. They reported back to a cabinet meeting chaired by Prime Minister Michael Somare. Mr Polye said that "there is no government presence" at the LNG sites, which had to be corrected. Mr Somare announced that another Highlander, Deputy Prime Minister and Works Minister Sam Abal, would become the "focal point for settling all outstanding issues relating to the PNG LNG project".

He said the cabinet, which was also briefed by Exxon executives, also decided the government would make outstanding payments to landowners in two weeks. The opposition said: "The forced shutdown of operations at Hides gas conditioning plant is not an isolated incident but a direct result of landowners' frustrations over the government's miserable failure to act in accordance with agreements it had entered into with them."

The Post-Courier newspaper said the replacement of Mr Polye by Mr Abal as the key LNG project figure showed "all is not well in the government; the divisions and distrusts are still there".

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