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Recent publicity about the organisation has suggested that foreign elements that were involved in questionable deals with the PNG Government in past years may have been behind the scheme.
Questions of good corporate governance have been called into play. One front-page report in PNG’s National newspaper suggested that government papers supporting the setting up of the organisation has called for the payment of K200 million in fees to consultants that are involved.
This has been denied by Prime Minister Sir Michael Somare but other high officials are adamant that this is what the documentation shows and that these funds are not for the establishment of the government-owned corporation.
Another cause for concern is that a senior government minister and a top bureaucrat had made a secretive trip to New York for discussions with Italy’s ENI Group, which sources claim, has a connection with the Petromin concept.
Some have gone so far as to suggest that the idea has been floated that through its involvement with Petromin, ENI was being encouraged to make a possible bid for Oil Search, PNG’s largest locally based resources company and one of the most successful firmss in PNG's history.
It was suggested that this involved an elaborate scheme to set up a corporation along similar lines to the PNG Sustainable Program Ltd, the beneficiary of BHP Billiton's 52% stake in Ok Tedi, which now operates like a quasi-government entity in PNG.
Strictly speaking, PNGSDPL is answerable to no one, with board members that are partially appointed by BHP, but who nevertheless do not report back to the parent company.
Some inspiration was also taken from the previous corporate entity controlled by the PNG Government, Orogen Minerals, which held government equity stakes in mining and oil projects until it was privatised through a merger with Oil Search.
In retrospect, therefore, it appears that Petromin is being activated as Orogen Mark II, not for the purpose of undertaking an active role in the nation's mineral and oil activities but as a pure investment vehicle.
In such a situation, all Petromin would do is dilute potential returns the PNG Government is likely to enjoy from resource ventures in which it has equity. Funds would be needed for highly paid Petromin executives, who will have little or no role in adding value to the corporation.
This is all very much in line with the common PNG cargo cult ethos.
At this stage, there is very little for Petromin to own especially since the plan to pipe natural gas to Australia has been abandoned, although it could gain equity into the Hides gas field and inherit the government's stake in Oil Search and Highlands Pacific.
At the moment, such equity is held by the Minerals Resources Development Corporation or by the Government's Independent Public Business Corporation, which has ownership of all state-owned enterprises.
The timing of Petromin does not make much sense on another score. When the government came to office in 2002, the mining and oil sectors were in dire straits, with expectations that much of both industries would virtually be wiped out by the middle of the next decade.
Since then there has been a massive turnaround in sentiment and exploration is taking place on many fronts, providing for a very healthy and robust future for the sector.
Instead of trying to focus on priority areas of agricultural and economic development, and in improvements to service delivery, it seems some PNG politicians and bureaucrats would still prefer grandiose corporate activities rather than core responsibilities.
