Papua New Guinea: Looking To Help Build Capacity in the Energy Sector

Posted by Brian Asmus
June 28, 2010
Residents Fish on Island of Papua New Guinea

About the Author: Brian Asmus serves as Political, Economic, Public Diplomacy Officer at U.S. Embassy Port Moresby in Papua New Guinea.

The U.S. Department of State, under the leadership of Secretary Clinton's Coordinator for International Energy Affairs David Goldwyn, arrived in Port Moresby on a multi-agency visit to Papua New Guinea, June 16-20, to gauge the nation's interest in the Department of State's newly designed Energy Governance and Capacity Initiative (EGCI) program. EGCI is designed to assist emerging resource-rich nations to optimize the value of new resources for development. Papua New Guinea is one of eight nations under consideration.

Coordinator Goldwyn and representatives from the U.S. Department of the Treasury and the U.S. Geological Survey met with members of the ministries of Foreign Affairs, Treasury and Finance as well as Papua New Guinea LNG, Papua New Guinea Power and members of the business community.

“We are here to offer Papua New Guinea technical assistance in the areas of resource assessment, environmental safety standards and transparent resource management,” said Goldwyn. “We think that this is a critical moment for Papua New Guinea. The world's attention will be focused on how the country manages its revenues and how the investment climate develops. The time to set up a transparent management system and to embrace international standards like the Extractive Industries Transparency Initiative (EITI) is now. The U.S. stands ready to help Papua New Guinea develop these systems."

According to Goldwyn, the team examined oil and gas resource assessment methodology and capabilities; oil resource data collection, management, archiving and storage; oil and gas sector revenue management and related governance and efficiency; optimization of budget policies and financial management mechanisms and associated legal and regulatory issues that have an impact on revenue management.

During meetings with ministry and agency officials, the EGCI team quickly discovered that Papua New Guinea would benefit from enhanced technical expertise to independently determine the size and quality of oil and gas reserves. Papua New Guinea government officials also expressed interest in obtaining assistance regarding development and management of a sovereign wealth fund as well as enhanced auditing capabilities for oil and gas revenues.

Next Steps: Following the assessment team's visit to Papua New Guinea, a proposed EGCI technical assistance program will be drafted. This program will be tailored to the specific needs identified during the team's visit and designed so that its objectives can be achieved by the end of a three-year time frame. The proposed EGCI program will be shared with the Papua New Guinea government and the U.S. Embassy in Port Moresby.

About EGCI: EGCI's core objective is to maximize the value, efficiency and positive development impact of oil and gas production and associated revenue flows to host governments, including that of Papua New Guinea. It accomplishes this goal through bolstering institutional capacities related to governance, revenue management and technical capability. Optimizing the management of the energy sector and revenue flows is critical for newly producing countries; oil and gas resources are finite, as are the associated earnings that are generated.

EGCI provides the recipient country with access to the U.S. government's top experts, along with their unmatched global expertise on issues related to petroleum geology; upstream licensing; exploration and production operations; revenue management; sector regulation; policy reform and implementation; and energy sector finance and tax structure. EGCI also provides the benefit of building both high-level and working-level contacts that can provide unbiased, sound advice and guidance as well as lasting relationships that can further long-term institutional stability and sound sector development and governance.

Assistance offered under EGCI will complement other sector reform efforts that may be underway. It is designed to provide value-added benefits that are tailored to address specific capacity needs. EGCI also provides technical guidance to support implementation of reforms that will foster sustainability as well as a commercial environment conducive to attracting large-scale private sector investment; specialized assistance in oil and gas revenue sharing and distribution as well as in related financial and tax management; establishment of financial tracking systems and measures to ensure process efficiency; and engagement with relevant civil society organizations that support oil and gas capacity building and investment in Papua New Guinea.



Zac K.
Michigan, USA
June 28, 2010

Zac K. in Michigan writes:

Being an island nation, it seems to me that pursuing an agenda of clean green energy would be quite viable. Wouldn't something like wind energy make more sense whether that be inland or offshore be something that really help this island nation? It would also mean less pollution and sustained opportunities the local population. I would be interested in what the administration thinks about these avenues for energy as well!

Thank You!

Virginia, USA
June 28, 2010

Beth M. in Virginia writes:

I agree with Zac in michigan
couldn't green energy be applied?
and couldn't the same be done for haiti?

Pamela G.
West Virginia, USA
June 29, 2010

Pamela G. in West Virginia writes:

It is wonderful to know we are reaching out to countries with a wealth of natural resources to help them be green and good global neighbors.


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