PNG leader demands quick action on corruption concerns linked to Australia

Papua New Guinean Prime Minister James Marape has demanded a preliminary report by Wednesday from the investigation into corruption concerns involving a key figure in the Pacific nation’s successful bid to join the National Rugby League competition.

Wapu Sonk stood down from the PNG NRL franchise board on Friday after an investigation by this masthead into whether he attempted to benefit from a deal between the country’s national oil and gas company and a Chinese government-controlled firm.

PNG businessman Wapu Sonk stood down from the country’s NRL franchise on Friday.Credit: Nathan Perri

His position as managing director of state-owned Kumul Petroleum Holdings has also come under scrutiny, with Marape announcing the appointment of a new chairman “to lead a full and independent review of the issues raised”.

“This matter must be resolved quickly, clearly and professionally. I expect a preliminary report on my desk when I return to Port Moresby on Wednesday,” Marape said.

“The people of Papua New Guinea deserve accountability, and the government will ensure that this issue is handled with integrity and in the national interest.”

Sonk was the chairman of the NRL bid team and was nominated by the PNG government as one of seven initial directors of the nascent entity, which will be bankrolled by the Australian government with an injection of $290 million over a decade.

PNG Prime Minister James Marape and Australian leader Anthony Albanese announce the PNG NRL team in Sydney in December.Credit: Kate Geraghty

While Marape asked him to stand aside, the corruption concerns relate to the multibillion-dollar energy titan charged with responsibility for the country’s oil and gas assets rather than the NRL team itself, and that is where the PNG leader’s attention has turned.

Announcing the appointment of Gerea Aopi, a leading oil and gas industry figure, as Kumul Petroleum’s new chairman, Marape said as prime minister and trustee of the company he had “a responsibility to protect the interests of our country and our people”.

“If you are entrusted with leading a state institution — whether as a departmental head, CEO, or managing director — your personal and professional conduct must be beyond reproach. There is no room for impropriety. Our SOEs [state-owned enterprises] must be models of transparency and good governance,” the prime minister said.

This masthead last week revealed secret dealings between Kumul Petroleum and the China Petroleum and Pipeline Engineering Corporation over a $30 million wharf upgrade at Motukea in which the Chinese operation was told to direct a contract to an Australian company owned by Sonk.

Sonk did not provide answers to questions sent to him by this masthead, but his lawyers wrote: “Our client denies any and all allegations of improper or unlawful conduct that you assert”.

Marape has asked Sonk for a written explanation and said he had also requested this masthead provide material relating to its reporting, to assist with the probe.

He said the investigation was about “governance, transparency, and protecting the reputation of Kumul Petroleum, which is a key institution of our economy and has international relationships to maintain” but it was “not a witch hunt”.

“These matters were raised by the Australian press and are now under international scrutiny. But let me be clear — Mr Wapu Sonk, like any citizen, is innocent until proven otherwise,” the PNG leader said.

Kumul Petroleum has a joint stake in PNG’s largest energy project, PNG LNG, with Australian company Santos and US giant ExxonMobil.

The concerns have arisen at a sensitive time for Santos, which is negotiating a $30 billion takeover offer by a Middle East consortium called XRG.

Santos owns 40 per cent of PNG LNG, a mammoth $US19 billion liquified natural gas exporter in PNG.

Saul Kavonic, an oil industry analyst with MST Financial, said the corruption concerns were unlikely to sink XRG’s takeover aspirations for Santos, a bid which has helped elevate the Australian producer’s share price.

“The governance issues in PNG are well understood in the gas industry and unlikely to present a surprise to XRG,” Kavonic said.

XRG is ultimately controlled by Abu Dhabi’s National Oil Company and the Emirate’s exceedingly wealthy Al Nahyan family who have strong ties to African warlords, according to The New York Times. The XRG consortium also includes US global private equity firm Carlyle.

Santos was contacted for comment.

Marape said the matter was a setback for PNG at a time when the government had been lobbying for more international investment in the energy sector to expand the country’s oil and gas capacity.

Aopi’s appointment was made before the controversy erupted, according to the prime minister, but came “at a time when our national oil and gas company needs credible, steady leadership to uphold its integrity and reputation”.

The Albanese government has committed $600 million over 10 years to its Pacific rugby league soft diplomacy venture, which was devised to bed down security ties in the region as China seeks to deepen its influence.

While $290 million will go towards the PNG NRL team itself, $250 million has been set aside for the development of the game in the Pacific. The remaining $60 million is to be distributed between the 17 existing NRL clubs as a licence fee for the new team.

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