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April 15, 2024
This decline is expected to persist due to lingering effects of January's civil unrest, resulting in continued pressure on business revenues and employment levels in the non-mineral private sector in the first half of 2024. The Bank's forecast for PNG's domestic growth in 2023 is a modest real GDP growth of 1.4 percent, a significant drop from the 5.2 percent recorded in 2022. Ongoing challenges such as foreign currency shortages, transportation costs, law enforcement issues, and unreliable power sources remain major concerns for businesses, prompting cost-cutting measures and exploration of cheaper alternatives. Looking ahead, the Bank anticipates a boost in economic activity, with projected real GDP growth of 4.5 percent in 2025, supported by various factors including full-year production at New Porgera and increased activity in the mineral sector, including a recovery in the retail and wholesale sectors and some pickup in activities associated with pre-final investment decision spending by new resource projects. In 2026, growth is projected to be around 3.6 percent, supported by increased activity in the mineral sector along with positive flow-on effects from increased exploration activities and capital investment. Risks to the domestic economic growth outlook are considered balanced, with downside risks including tighter monetary policies from major economies, geopolitical conflicts, and climate change-related events. Globally, the IMF's World Economic Outlook indicates a slight decrease in real global GDP growth to 3.1 percent in 2023, primarily due to factors such as Central Banks tightening monetary policies, geopolitical conflicts, and the withdrawal of COVID-related fiscal support. However, global growth is expected to remain relatively strong in 2024 and 2025, driven by a strong US economy and major emerging markets. Inflation globally is forecasted to decrease, with headline inflation projected to decline to 5.8 percent in 2024 and further to 4.4 percent in 2025. Regarding PNG's Balance of Payments, the country has experienced large current account surpluses driven by the mineral sector and exports of LNG, copper, and gold. However, there is a structural issue with a deficit of foreign currency inflows into PNG's domestic FX market, despite significant interventions from the BPNG. Inflation in PNG is expected to increase in 2024 due to continued depreciation of the Kina against the US Dollar, with the CPI projected to reach 5 percent and remain elevated throughout 2025 before easing in 2026. Supply side disruptions and geopolitical conflicts pose risks to the medium-term inflation outlook. The issue of excess liquidity in the banking system has been addressed through the introduction of liquidity management instruments by the BPNG, like the Fixed Rate Full Allotment (FRFA) 7-Day Central Bank Bill auction and lowering the Kina Facility Rate to 2.0 percent to support businesses after the civil unrest. The BPNG will adopt a tightening bias in the coming months to manage inflationary pressures, including increases to the Cash Reserve Ratio and the possibility of longer-dated FRFA Central Bank Bill auctions. Downside risks include a tighter-than-anticipated monetary policy stance from the Central Banks of the major economies, prolonged geo-political conflict in the Middle East, and climate change-related weather events. Balance of Payments and Inflation PNG has experienced significant current account surpluses driven by the mineral sector and LNG, copper, and gold exports. However, structural issues persist, including a deficit of foreign currency inflows into the domestic (Foreign Exchange) FX market. In 2023, commercial foreign currency inflows into PNG’s domestic FX market amounted to USD 5.5 billion against outflows of USD 7.2 billion. BPNG intervened with a record level of USD 1.6 billion to ease pressure on businesses and international reserves. Inflation remained below 2.2 percent in 2023 but is expected to increase to 5 percent in 2024 and remain elevated throughout 2025, mainly due to the depreciation of the Kina against the US Dollar. Monetary Policy Stance and Broad Money BPNG adjusted its monetary policy stance in response to economic conditions, lowering the Kina Facility Rate (KFR) to 2.0 percent in February 2024 to support businesses after January's civil unrest. Looking ahead, BPNG will adopt a tightening bias to address inflationary pressures, considering measures such as increases to the Cash Reserve Ratio (CRR) and the KFR. Future Outlook BPNG continues to address structural issues in the foreign exchange market and collaborate with the government and international partners, including the IMF, to enact necessary reforms. While challenges lie ahead, BPNG remains committed to promoting sustainable economic growth and stability. Governor Genia, during the launch of the Central Bank’s Monetary Policy Statement on the 4th April in Port Moresby-PNG, emphasized the importance of addressing challenges and implementing effective policy measures to achieve desired outcomes and ensure a stable environment for businesses and economic growth. Ms. Genia said, “We are continuing to work through the IMF Program along with the government and that is progressing well. The technical assistance we have received at the BPNG in working with the IMF has been of great benefit to us and we look forward to the IMF’s next mission to PNG which is later this month.” The PNG government has already enacted several amendments to the Central Banking Act in December 2021 following on from the recommendations from Phase 1 of the Independent Advisory Group’s report. Further amendments to the Central Banking Act are expected very soon following the release of the IAG’s Phase 2 Report in late November last year. “We have new Board appointments, very recently announced, and I am delighted to say we have a full Board with nine members now appointed. There is a wealth of experience being brought to the BPNG through those Board appointments and they will make a significant contribution to the BPNG and to PNG’s economy. “There are some challenges ahead of us but nothing that can’t be addressed and overcome. The measures we are introducing, with the exchange rate and the overall monetary policy framework will take time to achieve their desired outcomes,” she added. The BPNG will adopt a tightening bias in the coming months to manage inflationary pressures, including increases to the Cash Reserve Ratio and the possibility of longer-dated FRFA Central Bank Bill auctions, Governor Genia said.
April 15, 2024
This decline is expected to persist due to lingering effects of January's civil unrest, resulting in continued pressure on business revenues and employment levels in the non-mineral private sector in the first half of 2024. The Bank's forecast for PNG's domestic growth in 2023 is a modest real GDP growth of 1.4 percent, a significant drop from the 5.2 percent recorded in 2022. Ongoing challenges such as foreign currency shortages, transportation costs, law enforcement issues, and unreliable power sources remain major concerns for businesses, prompting cost-cutting measures and exploration of cheaper alternatives. Looking ahead, the Bank anticipates a boost in economic activity, with projected real GDP growth of 4.5 percent in 2025, supported by various factors including full-year production at New Porgera and increased activity in the mineral sector, including a recovery in the retail and wholesale sectors and some pickup in activities associated with pre-final investment decision spending by new resource projects. In 2026, growth is projected to be around 3.6 percent, supported by increased activity in the mineral sector along with positive flow-on effects from increased exploration activities and capital investment. Risks to the domestic economic growth outlook are considered balanced, with downside risks including tighter monetary policies from major economies, geopolitical conflicts, and climate change-related events. Globally, the IMF's World Economic Outlook indicates a slight decrease in real global GDP growth to 3.1 percent in 2023, primarily due to factors such as Central Banks tightening monetary policies, geopolitical conflicts, and the withdrawal of COVID-related fiscal support. However, global growth is expected to remain relatively strong in 2024 and 2025, driven by a strong US economy and major emerging markets. Inflation globally is forecasted to decrease, with headline inflation projected to decline to 5.8 percent in 2024 and further to 4.4 percent in 2025. Regarding PNG's Balance of Payments, the country has experienced large current account surpluses driven by the mineral sector and exports of LNG, copper, and gold. However, there is a structural issue with a deficit of foreign currency inflows into PNG's domestic FX market, despite significant interventions from the BPNG. Inflation in PNG is expected to increase in 2024 due to continued depreciation of the Kina against the US Dollar, with the CPI projected to reach 5 percent and remain elevated throughout 2025 before easing in 2026. Supply side disruptions and geopolitical conflicts pose risks to the medium-term inflation outlook. The issue of excess liquidity in the banking system has been addressed through the introduction of liquidity management instruments by the BPNG, like the Fixed Rate Full Allotment (FRFA) 7-Day Central Bank Bill auction and lowering the Kina Facility Rate to 2.0 percent to support businesses after the civil unrest. The BPNG will adopt a tightening bias in the coming months to manage inflationary pressures, including increases to the Cash Reserve Ratio and the possibility of longer-dated FRFA Central Bank Bill auctions. Downside risks include a tighter-than-anticipated monetary policy stance from the Central Banks of the major economies, prolonged geo-political conflict in the Middle East, and climate change-related weather events. Balance of Payments and Inflation PNG has experienced significant current account surpluses driven by the mineral sector and LNG, copper, and gold exports. However, structural issues persist, including a deficit of foreign currency inflows into the domestic (Foreign Exchange) FX market. In 2023, commercial foreign currency inflows into PNG’s domestic FX market amounted to USD 5.5 billion against outflows of USD 7.2 billion. BPNG intervened with a record level of USD 1.6 billion to ease pressure on businesses and international reserves. Inflation remained below 2.2 percent in 2023 but is expected to increase to 5 percent in 2024 and remain elevated throughout 2025, mainly due to the depreciation of the Kina against the US Dollar. Monetary Policy Stance and Broad Money BPNG adjusted its monetary policy stance in response to economic conditions, lowering the Kina Facility Rate (KFR) to 2.0 percent in February 2024 to support businesses after January's civil unrest. Looking ahead, BPNG will adopt a tightening bias to address inflationary pressures, considering measures such as increases to the Cash Reserve Ratio (CRR) and the KFR. Future Outlook BPNG continues to address structural issues in the foreign exchange market and collaborate with the government and international partners, including the IMF, to enact necessary reforms. While challenges lie ahead, BPNG remains committed to promoting sustainable economic growth and stability. Governor Genia, during the launch of the Central Bank’s Monetary Policy Statement on the 4th April in Port Moresby-PNG, emphasized the importance of addressing challenges and implementing effective policy measures to achieve desired outcomes and ensure a stable environment for businesses and economic growth. Ms. Genia said, “We are continuing to work through the IMF Program along with the government and that is progressing well. The technical assistance we have received at the BPNG in working with the IMF has been of great benefit to us and we look forward to the IMF’s next mission to PNG which is later this month.” The PNG government has already enacted several amendments to the Central Banking Act in December 2021 following on from the recommendations from Phase 1 of the Independent Advisory Group’s report. Further amendments to the Central Banking Act are expected very soon following the release of the IAG’s Phase 2 Report in late November last year. “We have new Board appointments, very recently announced, and I am delighted to say we have a full Board with nine members now appointed. There is a wealth of experience being brought to the BPNG through those Board appointments and they will make a significant contribution to the BPNG and to PNG’s economy. “There are some challenges ahead of us but nothing that can’t be addressed and overcome. The measures we are introducing, with the exchange rate and the overall monetary policy framework will take time to achieve their desired outcomes,” she added. The BPNG will adopt a tightening bias in the coming months to manage inflationary pressures, including increases to the Cash Reserve Ratio and the possibility of longer-dated FRFA Central Bank Bill auctions, Governor Genia said.
April 14, 2024
K92 Mining Inc. announces that it has commenced preparations to resume underground operations within two days, following the receipt of a letter from the Mineral Resources Authority (“ MRA ”) of Papua New Guinea vacating the Form 29 that was issued on March 13, 2024 (see March 19, 2024 Press Release ). The receipt of the letter vacating Form 29, follows a presentation by an Independent Safety Auditor to the MRA. Findings from the audit indicated that the Underground Safety Management Plan is good, conforms to criteria in ISO45001 and has been implemented. The Safety Auditor also did not find any substandard document, process or system, and noted that the Underground Safety Management Plan is comparable to other operations in Australia and Asia. John Lewins, Chief Executive Officer and Director stated, “Safety is, has and always will be K92’s number one priority, and I am pleased with the results of the Independent Safety Audit which are also a reflection of the significant investment and focus by the team on site, which has further intensified since mid-2023. While we are pleased with the positive safety audit findings, I want to emphasize that K92 is always proactively striving for better and will continue to relentlessly pursue its goal of zero harm.” The Company reiterates its 2024 Operational Guidance, and notes that the temporary suspension of underground operations since March 10, 2024 will have a moderate impact on Q1 and Q2 production.
April 08, 2024
James Marape, the Prime Minister of Papua New Guinea and Patrick Pouyanné, Chairman and CEO of TotalEnergies, met together to discuss the status of the Papua LNG project. On this occasion, Patrick Pouyanné reaffirmed to the Prime Minister that TotalEnergies, operator of the project, and its international partners ExxonMobil, Santos, JX Nippon, are fully committed to Papua LNG. In particular, he shared the high interest of several LNG buyers for off-taking LNG from Papua LNG due to its strategic location close to key Asian markets. He also informed the Prime Minister that, after receiving first EPC offers, it appears that the project will need to keep working with contractors to obtain commercially viable EPC contracts and requires more work to reach FID. In that view, the project will review the structure of some packages and open the competition to an enlarged panel of Asian contractors. As a consequence, FID of Papua LNG project is now expected in 2025. The Prime Minister and Patrick Pouyanné agreed that this slight delay will not affect the early works planned in Papua New Guinea in 2024 and that the project will maintain its full support to local population of Gulf Province. Moreover, Patrick Pouyanné announced that TotalEnergies intends to drill the first deepwater exploration well on the PPL 576 license in 2025.
April 08, 2024
James Marape, the Prime Minister of Papua New Guinea and Patrick Pouyanné, Chairman and CEO of TotalEnergies, met together to discuss the status of the Papua LNG project. On this occasion, Patrick Pouyanné reaffirmed to the Prime Minister that TotalEnergies, operator of the project, and its international partners ExxonMobil, Santos, JX Nippon, are fully committed to Papua LNG. In particular, he shared the high interest of several LNG buyers for off-taking LNG from Papua LNG due to its strategic location close to key Asian markets. He also informed the Prime Minister that, after receiving first EPC offers, it appears that the project will need to keep working with contractors to obtain commercially viable EPC contracts and requires more work to reach FID. In that view, the project will review the structure of some packages and open the competition to an enlarged panel of Asian contractors. As a consequence, FID of Papua LNG project is now expected in 2025. The Prime Minister and Patrick Pouyanné agreed that this slight delay will not affect the early works planned in Papua New Guinea in 2024 and that the project will maintain its full support to local population of Gulf Province. Moreover, Patrick Pouyanné announced that TotalEnergies intends to drill the first deepwater exploration well on the PPL 576 license in 2025.
April 15, 2024
In the ever-evolving development sectors of sustainable energy, mastering the installation of solar energy systems is both a skill and a necessity. With advancements and innovations occurring at a rapid pace, being informed with developments are crucial for companies in the electrical and solar industry. The Sustainable Energy Industry Association Papua New Guinea (SEAP) recently hosted a pivotal workshop in partnership with the Sustainable Energy Industry Association of Pacific Islands (SEIAPI) and the United States Agency for International Development PNG Electrification Project (USAID-PEP). Held on the 5th of April at the USAID-PEP office in Port Moresby, the event titled “SEIAPI/SEAP/USAID-PEP Solar Standards Workshop” brought together 60 participants from solar and electrical companies, government agencies, international donor organizations, and academia. The USAID-PEP Chief of Party Bruce Corbet highlighted the importance of mini-grids and small-scale electrification in achieving PNG’s electrification goals. Mr Corbet said, “This is one of the steps we are taking as more people join. And it is really important, this message, ‘that mini-grids and small-scale electrification is a fundamental part of electrifying Papua New Guinea’ and achieving the government’s goal of that 70% access target by 2030.” He emphasized the necessity of partnerships and capacity development for such initiative. USAID-PEP seeks to enable the creation of PNG’s mini-grid development industry. The workshop is for capacity development, including an opportunity to network with potential partners in the industry. The workshop lasted 1 hour and 30 minutes and participants were immersed with information and knowledge, guided by a “Standards Presentation,” followed by a question-and-answer session and a few minutes of industrial networking. The workshop, held both in person and online by Zoom, served as a platform of knowledge and collaboration, shedding light on solar energy installation. SEIAPI Executive Officer, Geoff Stapleton, a distinguished pioneer of the Australian solar industry, led the workshop with commendable expertise and insight. In collaboration with SEAP and USAID-PEP teams, Stapleton’s presentation delved deep into the topics such as design and product standards, solar energy standards, safety practices, and installation techniques. The presentation focused on critical standards and guidelines regarding solar photovoltaic (PV) systems, with a specific focus on design, installation, and product standards. Stapleton also provided a comprehensive overview of essential standards. From AS 4509.1:2009 to AS/NZS 4777.1:2016, each standard was explained with a visual guide, emphasizing its significance and implications for solar designers and installers. Stapleton’s pivotal role in the development and refinement of solar industry standards was evident, showcasing his expertise and commitment to ensuring installation practices and safety measures are carried out during installation based on both specification and requirements. The workshop's agenda covered a broad spectrum of topics, ranging from stand-alone power systems to grid connection requirements. Attendees also participated in the presentation by discussion, which they gained insights into system designed complexity, safety requirements for PV (photovoltaic) arrays or solar arrays, and electrical installations involving battery systems. Moreover, the presentation highlighted the inter-relation between various standards, emphasizing their collective role in ensuring the safety and effectiveness of solar energy systems. One of the workshop's key takeaways was the importance of compliance with industry standards. With safety being a paramount concern, adherence to standards such as AS/NZS 5033:2021 and AS/NZS 5139:2019 is imperative for companies operating in the electrical and solar industry. In addition, the workshop underscored the critical role of training and recognition schemes in fostering a culture of excellence and professionalism within the industry, especially in an industry where precision and compliance are paramount.
April 15, 2024
In the ever-evolving development sectors of sustainable energy, mastering the installation of solar energy systems is both a skill and a necessity. With advancements and innovations occurring at a rapid pace, being informed with developments are crucial for companies in the electrical and solar industry. The Sustainable Energy Industry Association Papua New Guinea (SEAP) recently hosted a pivotal workshop in partnership with the Sustainable Energy Industry Association of Pacific Islands (SEIAPI) and the United States Agency for International Development PNG Electrification Project (USAID-PEP). Held on the 5th of April at the USAID-PEP office in Port Moresby, the event titled “SEIAPI/SEAP/USAID-PEP Solar Standards Workshop” brought together 60 participants from solar and electrical companies, government agencies, international donor organizations, and academia. The USAID-PEP Chief of Party Bruce Corbet highlighted the importance of mini-grids and small-scale electrification in achieving PNG’s electrification goals. Mr Corbet said, “This is one of the steps we are taking as more people join. And it is really important, this message, ‘that mini-grids and small-scale electrification is a fundamental part of electrifying Papua New Guinea’ and achieving the government’s goal of that 70% access target by 2030.” He emphasized the necessity of partnerships and capacity development for such initiative. USAID-PEP seeks to enable the creation of PNG’s mini-grid development industry. The workshop is for capacity development, including an opportunity to network with potential partners in the industry. The workshop lasted 1 hour and 30 minutes and participants were immersed with information and knowledge, guided by a “Standards Presentation,” followed by a question-and-answer session and a few minutes of industrial networking. The workshop, held both in person and online by Zoom, served as a platform of knowledge and collaboration, shedding light on solar energy installation. SEIAPI Executive Officer, Geoff Stapleton, a distinguished pioneer of the Australian solar industry, led the workshop with commendable expertise and insight. In collaboration with SEAP and USAID-PEP teams, Stapleton’s presentation delved deep into the topics such as design and product standards, solar energy standards, safety practices, and installation techniques. The presentation focused on critical standards and guidelines regarding solar photovoltaic (PV) systems, with a specific focus on design, installation, and product standards. Stapleton also provided a comprehensive overview of essential standards. From AS 4509.1:2009 to AS/NZS 4777.1:2016, each standard was explained with a visual guide, emphasizing its significance and implications for solar designers and installers. Stapleton’s pivotal role in the development and refinement of solar industry standards was evident, showcasing his expertise and commitment to ensuring installation practices and safety measures are carried out during installation based on both specification and requirements. The workshop's agenda covered a broad spectrum of topics, ranging from stand-alone power systems to grid connection requirements. Attendees also participated in the presentation by discussion, which they gained insights into system designed complexity, safety requirements for PV (photovoltaic) arrays or solar arrays, and electrical installations involving battery systems. Moreover, the presentation highlighted the inter-relation between various standards, emphasizing their collective role in ensuring the safety and effectiveness of solar energy systems. One of the workshop's key takeaways was the importance of compliance with industry standards. With safety being a paramount concern, adherence to standards such as AS/NZS 5033:2021 and AS/NZS 5139:2019 is imperative for companies operating in the electrical and solar industry. In addition, the workshop underscored the critical role of training and recognition schemes in fostering a culture of excellence and professionalism within the industry, especially in an industry where precision and compliance are paramount.
April 15, 2024
In a significant move aimed at uplifting rural economies, the Coffee Industry Corporation Limited’s (CIC’s) Strategic Business Plan for 2020-2024 aims to hike production of coffee by 10 percent and improve the quality of coffee beans by 20 percent. The CIC SBP focuses on enhancing the livelihoods of coffee farmers, boosting their income, and raising their production, aligning with PNG’s Vision 2050, ‘Take Back the Economy’, with special focus on agriculture. This initiative seeks to empower coffee growers, particularly in rural PNG areas like Wabag District in Enga Province, to enhance their production and ultimately improve their living standards sustainably. Established in 2017, Wabag District Coffee Grower Cooperative Society (WDCGCS) was registered into SME business through coffee (parchment) purchase and marketing. It sought to help rural farmers and coffee growers to sell their produce at convenient, affordable prices at the community-village level. WDCGCS supports raising coffee production to generate higher cash incomes into the rural population at the community household level. Initiating Progress The WDCGCS has taken proactive measures to foster coffee cultivation in the region. It includes the establishment of a semi-improved coffee nursery dedicated to raising quality coffee seedlings. These seedlings are then distributed among coffee growers across Wabag District, with the aim of supporting planting efforts and boosting coffee production over the next 3-5 years. During an interview with PNG Business News, WDCGCS Chairman Mr Kandes Nyia shared the cooperative’s aim to promote coffee, provide quality coffee using modern machines, and secure quality markets for Wabag District coffee growers. “By this year, we aim to market quality coffee from Wabag District. More coffee planted means more income for our people,” he added. “Coffee will help the people in Wabag District raise their standard of living, by providing an income and at the same time providing youth empowerment opportunities.” He emphasized that coffee also plays a role in that its trees prevent soil erosion and improve soil fertility. “People must be motivated to work the land providing garden tools, equipment and agricultural equipment to work,” Mr Nyia added. He said such initiatives must get support from agencies, business sectors, and the government, which will help communities develop and participate in projects for the development of rural areas in PNG. Proposed Projects To further amplify their impact, WDCGCS is proposing two key project components: Expansion of Coffee Rehabilitation/Nursery Projects: This involves the establishment of three new coffee rehabilitation/nursery projects, encompassing new coffee planting and management, rehabilitation of existing coffee gardens, and streamlined coffee buying and marketing processes. Creation of a New Coffee Market: The cooperative aims to introduce a modern coffee market equipped with a main coffee warehouse to serve as a centralized hub for rural coffee growers, providing them with a secure and convenient platform to conduct trading activities at fair and competitive prices. Community Support and Funding The initial stages of these projects have been made possible through support and funding from various sources, including the Wabag District Services Improvement Program (DSIP) funds, which underlines a collective commitment to realizing long-term development goals and fosters sustainable livelihoods within the community. WDCGCS act as the coffee buying and marketing agent, and its service providers as indirect beneficiaries in the value chain. The project is currently progressing to grow another 50,000 coffee seedlings, which is the required package through its DSIP funding volume. This would supply another 200 growers into the next phase of planting, the cooperative said. The project has established a foundation to buy more coffee seedlings and a technical framework to support coffee production and management, and to promote high-quality and quantity coffee production for high incomes in both the urban and rural household population.  Vision and Impact Since its establishment in 2017, WDCGCS has been dedicated to promoting coffee development in Wabag District. Its objectives encompass not only raising coffee production but also promoting quality cultivation practices, engaging unemployed youth in agriculture, and providing a strong marketing avenue for local coffee beans. Empowering Communities Operating across 20 Local Level Government (LLG) areas within Wabag District, WDCGCS actively involves over 200 registered farmers, including 150 males and 50 females, with a special focus on engaging youth in coffee cultivation. By strategically establishing its headquarters in Birip village, WDCGCS has positioned itself as a pivotal player in the region's coffee industry, catering to the needs of both growers and consumers alike. Addressing Challenges Despite the region's rich coffee-growing potential, challenges such as inadequate market infrastructure and safety concerns have persisted. The absence of a modern market facility has not only hindered economic growth but also posed risks to farmers' safety and well-being. Through the proposed initiatives, WDCGCS aims to mitigate these challenges by establishing modern market facilities equipped with essential amenities and safety measures. Looking Ahead: As WDCGCS continues to expand its operations, its focus remains steadfast on enhancing coffee production, promoting sustainable rural development, and improving the overall quality of life for coffee growers in Wabag District. With ongoing support from government entities and funding agencies, the cooperative is confident with realizing its vision of establishing Wabag coffee as a premium brand on the global market. Appreciate the process The ‘coffee seed to coffee in the cup’ mantra is a long process many often do not appreciate and consider. In PNG, the coffee process is usually done manually and often takes 3-4 years for the coffee to reach the target market. The manual process takes longer and includes planting seedlings, to harvesting the cherries either strip picked or selectively picked, and the method of processing the cherries to prevent fruit from being spoilt is done either by dry method or wet method. The coffee beans are then dried and milled and brought to the markets for sale. Exporting, testing, roasting the coffee, and grinding or brewing coffee are the final stages for consumption. PNG’s coffee industry is gaining recognition for its distinctive and unique flavors from the coffee beans grown in the Highlands region of PNG. Indeed, the manual process often used in PNG reflects the time, effort, and patience in bringing out quality in the coffee beans. Thus WDCGCS’s aim is to export their own coffee around the world.
April 08, 2024
Papua New Guinea took a significant stride towards sustainable economic development with the inauguration of the Green Finance Centre (GFC) in a collaborative effort spearheaded by the Bank of Papua New Guinea (BPNG) and the Global Green Growth Institute (GGGI). The move aims to revolutionize PNG's financial sector by integrating green finance principles into its core operations. Other key partners include the Centre for Excellence in Financial Inclusion (CEFI), the Department of Climate Change and Development Authority (CCDA), and the Alliance for Financial Inclusion (AFI). The effort’s primary objective is to tackle environmental and climate change challenges in PNG through innovative and inclusive climate finance and green investment mechanisms within the financial and banking sector. This aligns with PNG’s commitment to achieving low-carbon, sustainable, and inclusive economic growth while addressing climate change risks across the country. This landmark collaboration launched on 25th March at the prestigious Hilton Hotel, Port Moresby. Distinguished guests included Chief Secretary to the Government of PNG Mr. Ivan Pomaleu OBE, Conservation Environment & Climate Change Minister Hon Simo Kilepa MP, and the Governor of the Bank of Papua New Guinea Mrs. Elizabeth Genia, marked a pivotal moment in the nation's financial landscape. The ceremony also witnessed the participation of key dignitaries, including the Minister for the Environment Hon. Simon Kilepa; Dr. Alfred Hannig, Executive Director for Alliance for Financial Inclusion (AFI); New Zealand High Commissioner, Peter Zwart; His Excellency Guillaume Lemoine, French Ambassador to PNG; and Mr. George Awap, Assistant Governor - BPNG. At the heart of the initiative lies the Inclusive Green Finance Policy (IGFP), developed by GGGI and CEFI in 2021. With a generous funding of USD 670,000 from the New Zealand Ministry of Foreign Affairs and Trade (MFAT), under the Low Emission Climate Resilient Development Program (LECRD), the IGFP aims to integrate green finance practices into PNG’s financial landscape. One of the highlights of the launch was the unveiling of the GFC's logo and website, symbolizing a new era of environmentally conscious and financial practices in PNG. The steering committee, chaired by BPNG, will guide the GFC in implementing the IGFP and leading future initiatives related to green finance flows in the country. The signing of a Memorandum of Understanding (MoU) among BPNG, GGGI, and three financial institutions—Bank of South Pacific Group (BSP Group), Nationwide Micro Bank (MiBank), and Women’s Micro Bank (Mama Bank)—underlines the commitment to integrating the IGFP into their operations and development of green loan products. The grant agreement signed between GGGI and Agence Française de Développement (AFD) further solidifies international support for PNG's green finance agenda. With a six million Euros grant, PNG through the GFC will receive one million Euros to support the ongoing work of IGFP implementation and an additional 1.8 million Euros for designing and capitalizing of a Green Refinancing Facility (GRF). In his keynote remarks, Chief Secretary Mr. Ivan Pomaleu OBE hailed the establishment of the GFC as a bold step towards greening PNG's financial sector, emphasizing the importance of promoting low-emission options to combat climate change impacts. “In line with the government’s mandate, the Green Finance Centre will strongly advocate for banks to channel loan investments in sectors such as agriculture, energy, SMEs and bioeconomy to promote low-emission options to reduce our carbon footprint and lead by example in the region and globally, demonstrating our commitment to addressing climate change impacts,” said Mr. Pomaleu. Echoing similar sentiment, BPNG Governor Mrs. Elizabeth Genia reaffirmed the bank's commitment to promoting national financial inclusion and environmental sustainability, acknowledging the pivotal role of GGGI and CEFI in driving this initiative forward. “The Bank of Papua New Guinea is committed to promoting national financial inclusion and the greening of the financial sector and the launch of the Green Finance Center underscores the commitment of all stakeholders involved to drive sustainable development and address climate change challenges through innovative financial mechanisms,” she added. High Commissioner Zwart stressed the urgency of climate action and commended the collaboration between the New Zealand Government, BPNG and GGGI in establishing the Green Finance Center. He said: “The New Zealand Ministry of Foreign Affairs and Trade is proud to provide funding for IGFP and collaborate with the Bank of Papua New Guinea and GGGI in establishing the Green Finance Centre which will play a crucial role in working with financial institutions to mobilize increased green lending and investments in Papua New Guinea.” AFD Executive Director Mr. Philippe Orliange expressed support for the IGFP and the Green Finance Center, affirming AFD's commitment to replicating the success of greening PNG’s financial sector across the Pacific Region.  “Greening the financial system in PNG is crucial towards the fight against climate change and I am proud that France is happy to help PNG tackle this. PNG is a role model in the Pacific, and we wish all the best to the team involved,” he added. The launch of the GFC aligns seamlessly with BPNG - CEFI’s Third National Financial Inclusion Strategy (NFIS 3) (2023-2027) and PNG’s climatic goals outlined in PNG Vision 2050 and Medium-Term Development Plan IV (2023-2027), highlighting the integrated approach towards sustainable development.
April 08, 2024
Papua New Guinea took a significant stride towards sustainable economic development with the inauguration of the Green Finance Centre (GFC) in a collaborative effort spearheaded by the Bank of Papua New Guinea (BPNG) and the Global Green Growth Institute (GGGI). The move aims to revolutionize PNG's financial sector by integrating green finance principles into its core operations. Other key partners include the Centre for Excellence in Financial Inclusion (CEFI), the Department of Climate Change and Development Authority (CCDA), and the Alliance for Financial Inclusion (AFI). The effort’s primary objective is to tackle environmental and climate change challenges in PNG through innovative and inclusive climate finance and green investment mechanisms within the financial and banking sector. This aligns with PNG’s commitment to achieving low-carbon, sustainable, and inclusive economic growth while addressing climate change risks across the country. This landmark collaboration launched on 25th March at the prestigious Hilton Hotel, Port Moresby. Distinguished guests included Chief Secretary to the Government of PNG Mr. Ivan Pomaleu OBE, Conservation Environment & Climate Change Minister Hon Simo Kilepa MP, and the Governor of the Bank of Papua New Guinea Mrs. Elizabeth Genia, marked a pivotal moment in the nation's financial landscape. The ceremony also witnessed the participation of key dignitaries, including the Minister for the Environment Hon. Simon Kilepa; Dr. Alfred Hannig, Executive Director for Alliance for Financial Inclusion (AFI); New Zealand High Commissioner, Peter Zwart; His Excellency Guillaume Lemoine, French Ambassador to PNG; and Mr. George Awap, Assistant Governor - BPNG. At the heart of the initiative lies the Inclusive Green Finance Policy (IGFP), developed by GGGI and CEFI in 2021. With a generous funding of USD 670,000 from the New Zealand Ministry of Foreign Affairs and Trade (MFAT), under the Low Emission Climate Resilient Development Program (LECRD), the IGFP aims to integrate green finance practices into PNG’s financial landscape. One of the highlights of the launch was the unveiling of the GFC's logo and website, symbolizing a new era of environmentally conscious and financial practices in PNG. The steering committee, chaired by BPNG, will guide the GFC in implementing the IGFP and leading future initiatives related to green finance flows in the country. The signing of a Memorandum of Understanding (MoU) among BPNG, GGGI, and three financial institutions—Bank of South Pacific Group (BSP Group), Nationwide Micro Bank (MiBank), and Women’s Micro Bank (Mama Bank)—underlines the commitment to integrating the IGFP into their operations and development of green loan products. The grant agreement signed between GGGI and Agence Française de Développement (AFD) further solidifies international support for PNG's green finance agenda. With a six million Euros grant, PNG through the GFC will receive one million Euros to support the ongoing work of IGFP implementation and an additional 1.8 million Euros for designing and capitalizing of a Green Refinancing Facility (GRF). In his keynote remarks, Chief Secretary Mr. Ivan Pomaleu OBE hailed the establishment of the GFC as a bold step towards greening PNG's financial sector, emphasizing the importance of promoting low-emission options to combat climate change impacts. “In line with the government’s mandate, the Green Finance Centre will strongly advocate for banks to channel loan investments in sectors such as agriculture, energy, SMEs and bioeconomy to promote low-emission options to reduce our carbon footprint and lead by example in the region and globally, demonstrating our commitment to addressing climate change impacts,” said Mr. Pomaleu. Echoing similar sentiment, BPNG Governor Mrs. Elizabeth Genia reaffirmed the bank's commitment to promoting national financial inclusion and environmental sustainability, acknowledging the pivotal role of GGGI and CEFI in driving this initiative forward. “The Bank of Papua New Guinea is committed to promoting national financial inclusion and the greening of the financial sector and the launch of the Green Finance Center underscores the commitment of all stakeholders involved to drive sustainable development and address climate change challenges through innovative financial mechanisms,” she added. High Commissioner Zwart stressed the urgency of climate action and commended the collaboration between the New Zealand Government, BPNG and GGGI in establishing the Green Finance Center. He said: “The New Zealand Ministry of Foreign Affairs and Trade is proud to provide funding for IGFP and collaborate with the Bank of Papua New Guinea and GGGI in establishing the Green Finance Centre which will play a crucial role in working with financial institutions to mobilize increased green lending and investments in Papua New Guinea.” AFD Executive Director Mr. Philippe Orliange expressed support for the IGFP and the Green Finance Center, affirming AFD's commitment to replicating the success of greening PNG’s financial sector across the Pacific Region.  “Greening the financial system in PNG is crucial towards the fight against climate change and I am proud that France is happy to help PNG tackle this. PNG is a role model in the Pacific, and we wish all the best to the team involved,” he added. The launch of the GFC aligns seamlessly with BPNG - CEFI’s Third National Financial Inclusion Strategy (NFIS 3) (2023-2027) and PNG’s climatic goals outlined in PNG Vision 2050 and Medium-Term Development Plan IV (2023-2027), highlighting the integrated approach towards sustainable development.
April 14, 2024
Papua New Guinea (PNG) and Australia have embarked on a collaborative endeavour to honour war memorials and enhance tourism prospects. This initiative follows a Memorandum of Agreement signed last year 2023 between the Papua New Guinea Tourism Promotion Authority (PNGTPA), National Capital District Commission (NCDC), and Canada Bay City Council in Sydney. A significant discussion has been initiated among the PNG Tourism Promotion Authority, NCDC, and Canada Bay City Council in Sydney to jointly develop war memorial sites in Port Moresby. This collaborative effort aims to honour war legacies and promote War Pilgrimage as a prominent tourist attraction, akin to the renowned Kokoda Trail trekking experience. The initiative is spearheaded by Canada Bay City Council, PNG Tourism Promotion Authority, NCDC, and Network Kokoda Australia. Driven by a vision to preserve the lessons of World War II, Canada Bay City Council has invested substantially in projects such as the Kokoda Trail Memorial Walkway. This collaboration aims to strengthen bonds between nations, including the United States and Japan, while emphasizing the historical significance of the Kokoda Campaign to both Australia and Papua New Guinea. Through this partnership, historic sites in NCD, including Paga Hill, Wardstrip, and Sabama, will undergo development, eventually extending into Central and Oro Provinces with support from provincial governments and Network Kokoda Australia. Under the agreement, both nations will jointly develop war memorial sites in Port Moresby, reflecting their shared commitment to preserving the legacies of the Second World War and promoting the War Pilgrimage as a prominent tourist attraction, akin to the renowned Kokoda Trail trekking experience. This trip seeks to establish a work plan for 2024-2025 to develop war memorial sites and promote war pilgrimages in NCD, Central, and Oro Provinces, with the ultimate goal of creating a tourist product stretching from Paga Hill to Buna. A stakeholders’ meeting, scheduled during this trip, will bring together participants across Australia to garner support for the initiative. Minister of Tourism, Arts & Culture, Hon. Isi Henry Leonard, MP, and NCD Governor, Hon. Powes Parkop, MP, LLB, LLM, will address the stakeholders and finalize the work plan for implementation. Plans also include the establishment of Network Kokoda PNG and pushing for the transfer of the Kokoda Track Authority to PNGTPA. “The collaboration between PNG and Australia to develop war memorials and promote tourism is a testament to the enduring friendship between our nations and the shared commitment to honouring our war heroes. This initiative will not only preserve historical legacies but also create opportunities for economic growth, education, and cultural exchange,” said NCD Governor, Hon. Powes Parkop, MP, LLB, LLM. The visit to Sydney marks a pivotal step in solidifying the partnership between PNG and Australia. Through joint efforts, both nations aim to create a lasting legacy that honours the sacrifices of past generations while paving the way for a brighter future through tourism, education, and cultural exchange. This collaborative endeavour underscores the importance of international cooperation in preserving historical narratives and fostering mutual understanding.
April 14, 2024
Papua New Guinea (PNG) and Australia have embarked on a collaborative endeavour to honour war memorials and enhance tourism prospects. This initiative follows a Memorandum of Agreement signed last year 2023 between the Papua New Guinea Tourism Promotion Authority (PNGTPA), National Capital District Commission (NCDC), and Canada Bay City Council in Sydney. A significant discussion has been initiated among the PNG Tourism Promotion Authority, NCDC, and Canada Bay City Council in Sydney to jointly develop war memorial sites in Port Moresby. This collaborative effort aims to honour war legacies and promote War Pilgrimage as a prominent tourist attraction, akin to the renowned Kokoda Trail trekking experience. The initiative is spearheaded by Canada Bay City Council, PNG Tourism Promotion Authority, NCDC, and Network Kokoda Australia. Driven by a vision to preserve the lessons of World War II, Canada Bay City Council has invested substantially in projects such as the Kokoda Trail Memorial Walkway. This collaboration aims to strengthen bonds between nations, including the United States and Japan, while emphasizing the historical significance of the Kokoda Campaign to both Australia and Papua New Guinea. Through this partnership, historic sites in NCD, including Paga Hill, Wardstrip, and Sabama, will undergo development, eventually extending into Central and Oro Provinces with support from provincial governments and Network Kokoda Australia. Under the agreement, both nations will jointly develop war memorial sites in Port Moresby, reflecting their shared commitment to preserving the legacies of the Second World War and promoting the War Pilgrimage as a prominent tourist attraction, akin to the renowned Kokoda Trail trekking experience. This trip seeks to establish a work plan for 2024-2025 to develop war memorial sites and promote war pilgrimages in NCD, Central, and Oro Provinces, with the ultimate goal of creating a tourist product stretching from Paga Hill to Buna. A stakeholders’ meeting, scheduled during this trip, will bring together participants across Australia to garner support for the initiative. Minister of Tourism, Arts & Culture, Hon. Isi Henry Leonard, MP, and NCD Governor, Hon. Powes Parkop, MP, LLB, LLM, will address the stakeholders and finalize the work plan for implementation. Plans also include the establishment of Network Kokoda PNG and pushing for the transfer of the Kokoda Track Authority to PNGTPA. “The collaboration between PNG and Australia to develop war memorials and promote tourism is a testament to the enduring friendship between our nations and the shared commitment to honouring our war heroes. This initiative will not only preserve historical legacies but also create opportunities for economic growth, education, and cultural exchange,” said NCD Governor, Hon. Powes Parkop, MP, LLB, LLM. The visit to Sydney marks a pivotal step in solidifying the partnership between PNG and Australia. Through joint efforts, both nations aim to create a lasting legacy that honours the sacrifices of past generations while paving the way for a brighter future through tourism, education, and cultural exchange. This collaborative endeavour underscores the importance of international cooperation in preserving historical narratives and fostering mutual understanding.
April 18, 2024
In Part I, we read about the signs of oil and gas throughout Papua New Guinea that enticed many oilmen to look for large oil and gas fields over many decades, and we read about the first commercial oil discovery at the Iagifu 2-X well and how the Kutubu field was successfully developed.  We now pick up the story where subsequent exploration wells found mainly gas fields rather than oil fields.    When Papua New Guinea realised that its petroleum endowment was not so full of oil, but was comprised substantially of natural gas resources, it was recognised that gas would be difficult to develop in the absence of any domestic gas demand from households, commerce, or industry, and all the more so being remote from the gas markets of other nations. So, in 1992, the Government through the newly-established Petroleum Branch, commissioned a study on all the discovered oil and gas fields of Papua New Guinea.  This work was conducted by the US firm, Scientific Software Intercom in collaboration with the officers of the Petroleum Branch and sought to assess the extent of the petroleum resources and reserves to proper and systematic standards of reserve reporting then published by the Society of Petroleum Engineers. Based on summations of the reserves, an economic study was undertaken applying the then prevailing Papua New Guinea petroleum fiscal regime. The results were presented to the National Executive Council (the Cabinet) showing that if the production from the gas fields discovered to date were aggregated, there could conceivably be a commercially viable gas development based on the export of Liquefied Natural Gas (LNG) to East Asian markets, but more work would be needed to obtain better quantification of the gas field development costs and the construction costs of a LNG plant and export facilities. The Government liked the idea of gas development and embarked on examining its policies for such and began fostering the notion of gas development. Economic and policy studies were conducted and extensive discussions between gas field owners and promoters ensued. In 1995, the Government tabled a White Paper on Natural Gas Policy before the Papua New Guinea Parliament. The policy laid down the regulatory and fiscal terms that the Government was willing to consider for the encouragement of investment in gas development.  Key features were the introduction of Petroleum Retention Licences (PRLs) to allow the companies to keep their discoveries beyond the period of tenure provided by a normal Petroleum Prospecting Licence.  This would be allowed in consideration of an acceptable programme of gas field appraisal and delineation, conduct of commercial studies and development promotion by the licensees. So long as a field was currently not commercially viable, the PRLs would allow retention for up to 15 years.  The gas policy also introduced a single ring-fence for the field development, gas pipeline infrastructure, LNG Plant and marine facilities. And based on considerable economic modelling, the Government landed on a concept of 50/50 sharing of the net value between the developer and the Government. The income tax rate for gas operations was set to 30% of net profits and the State decided it would keep its right to take up to 22.5% equity in the entirety of any development, including the LNG plant and associated facilities. Royalty rates were left at 2% of the wellhead value.  With the foundations for the gas development defined by the revised gas regulatory and fiscal regime, Exxon and BP pursued their LNG development plans based on the large Hides gas field with notions of taking the gas to the Papua New Guinea north-coast and a deep water plant site at Madang.  However, these plans faltered due to the Asian financial crisis in 1997 and the consequent sudden reduction in East Asian LNG demand and the terrible tsunami that occurred in 1998 at Aitape on the north coast.   An account of the tsunami was made by Prof. Hugh Davies of the University of Papua New Guinea in his book Aitape Story published in 2007. He attributed the devastating waves to movement on a sea floor fissure arising from a 7.0 magnitude earthquake. That movement caused a slump of seabed bottom sediment which would have generated the wave.   The tsunami demonstrated that whilst placing any LNG facilities nearer to markets, any north coast-located LNG facility would have to be built to much more exacting standards to cater for the additional seismic risk, as compared to the south coast. The Petroleum Division, mindful of the seismic hazards of the New Guinea part of Papua New Guinea, had earlier commissioned a Papua New Guinea Seismic Hazard Study, prepared by Dr Horst Letz, a renowned seismologist, which was completed around the time of the tsunami. It clearly defined the risk and indicated that a southern coast location for a LNG plant and facilities would be preferable. The story of the tragic Aitape tsunami and its aftermath are told by Prof Hugh Davies in his 2007 book: the Aitape Story.    When the amendments to the Petroleum Act were being prepared for gas development pursuant to the 1995 Gas Policy, the results of policy studies on landowner benefits (both royalty and equity sharing), strategic access to pipelines and processing facilities and elementary domestic gas business provisions became available, and an effort was made to incorporate these matters into the amendments. The Government was intent in providing statutorily defined benefits to communities hosting any future oil and gas development together with a proper process of consultation and liaison with communities. For such benefits, the Government devised the idea of a separate Development Agreement between the community parties and the State, which would be agreed in a formally convened Development Forum after proper research had been made as to land matters through the conduct of social mapping and landowner identification studies carried out by the licensees. Significant and specific political lobbying arose from the Southern Highlands Province (home to the major oil and gas fields) for the Government to consider making a separate Gas Act for gas operations. In the resulting compromise, the Government agreed at the political level to introduce some of the reforms suggested by the Province, but only if the Act would remain intact, though it was now agreed that the new Act would be rebranded as the Oil and Gas Act, whilst still referring to petroleum for the most part. Thus, the Oil and Gas Act, No 49 of 1998 was born. It represented a major restatement of the former Petroleum Act, covered much new ground and paved the way for improved participation by communities and their sharing in benefits. The cover of the Oil and Gas Act, 1998 consolidated to 2007, though there have been many more amendments since. This copy is battered and torn due to extensive use by the writer!  Later, BP withdrew from Papua New Guinea and took their ideas about Papua New Guinea LNG development to West Papua in Indonesia where they successfully launched the Tangguh LNG Project.  Then, Chevron, realising that they were handling increasing volumes of associated gas in their operation of the Kutubu oil fields, re-injecting as much as 400 million standard cubic feet of gas per day bought out the commercial notions that the International Petroleum Corporation (the early Lundin company) had about developing their offshore Pandora gas field in the Gulf of Papua, and sending that gas to Townsville in Queensland, Australia to supply a 200-megawatt power plant. A period followed when all development notions were focused on transmitting gas to Australia from the producing oil fields, plus the undeveloped gas fields. With Kutubu oil production declining, Chevron departed the venture, selling its Papua New Guinea interests to Oil Search and over the course of several years, the schemes waxed and waned. The Papua New Guinea Gas Project, alias Papua New Guinea Gas to Queensland Project or Gas to Australia Project ended up with over 4,300 kilometres of trunk gas pipelines and lateral pipelines hanging off the Papua New Guinea gas sources. Most of that infrastructure was in the north-eastern quadrant of Australia and was to be expensed against the supply of gas to a wide and quixotic range of Australian gas customers.  With low gas prices, high steel prices and the emergence of coal seam methane development notions in Australia, finally it was realised that Papua New Guinea might end up giving its gas away for nothing and that the only value For Papua New Guinea might remain in the natural gas condensates extracted in Papua New Guinea. The Papua New Guinea Gas Project for the supply of gas to Australia thus failed. An abrupt turn was made to change all the development ideas toward supplying a LNG plant to be located on the Papuan South coast and an effort made to market the gas as LNG to East Asian markets. The dependence on external infrastructure and specific gas demands in Australia was also not seen as either politically attractive or sustainable. Thus, was born the Papua New Guinea LNG Project, more familiarly known as the PNG LNG Project. PNG LNG has many factors in its favour as a distinct source for LNG for supply to East Asian markets. Papua New Guinea is a non-aligned Christian nation; it is not an Islamic nation. Papua New Guinea is desirous of investment and keen for development based on commercial oriented fiscal terms. Papua New Guinea as a nation has open-ocean access from its shores to customers and does not rely on any strategic straits. It has a Westminster-style Government and observes the principles of law and contract. Papua New Guinea is favourably positioned to supply the Australasian region, but can reach out to serve Asian, Pacific and American markets.  With diminishing oil production and the absence of new oil finds, Papua New Guinea’s explorers needed to capitalise on prior exploration investments that failed to find oil. Gas in the new century was no longer a hindrance and could be profitably developed even extending the life of the oil fields. The PNG LNG project was projected to export LNG at a heating value of 1,135 BTU/SCF gas and the liquids were forecast to sell at US$ 60/barrel. Anticipated LNG prices were:  US$ 8.07 per MSCF: equivalent to US$ 10.20 per MMBTU, or US$ 9.69/GJ. The original plant design was upgraded early on from.6.3 million tonnes per annum to 6.9 million tonnes per annum for production over a 30-year period.  Gross income was estimated to be ~ US$ 74.3 billion. Even at US$ 50/barrel oil, the project was still forecast to yield US$ 61.9 billion in LNG sales. The gas is rich in natural gas liquids, so at just 20 BO/MMSCF, some 210 million barrels of natural gas liquids were forecast to yield an additional US$ 12 billion of sales revenue. The PNG LNG Project at Caution Bay about 20 kilometres north-west of Port Moresby And so, in May 2014, Papua New Guinea became an LNG exporter, and is now producing about 8+ mta LNG per annum to customers in China, Japan and Taiwan - well above the original nameplate capacity of the LNG Plant. It got there because of fine operatorship on the part of ExxonMobil of a coherent joint venture. ExxonMobil was able to market the gas to top quality customers and obtain superior project financing. The only major disappointment has been the collapse several times in the crude oil prices below projections, and hence the LNG prices due to the indexing with crude oil. For the first year, some elevated prices were obtained, but clearly the fall of crude oil below US$ 30 per barrel in 2015 hurt the project economics, as did the see-sawing of prices in the aftermath of the Covid pandemic when prices plummeted to less than US$ 3 per MMBTU only to soar to over US$ 60 per MMBTU later.  The markets have calmed down now.  Access to lands for the project development came with resounding landowner consent after an enormous development forums were held at project level in Kokopo in New Britain and at licence level in each licence area. During the forums, the sharing of the benefit streams of the 2% royalty, 2% free equity from the State, 2% development levy, and other project grants including business development grants and infrastructure grants were discussed. Oddly, whilst some grants have been paid, some of the royalties and equity benefits have yet to be distributed due to some remaining uncertainties about landownership, and/or challenges based on rivalry. But notwithstanding this situation, the landowners have been extremely patient and have remained stoical. Indeed, the landowners have negotiated with the Government for the vendor financing of additional equity in the PNG LNG Project of about 4.2% that was promised to them in the main development forum in Kokopo. These equity holdings will be most valuable once the project finance has been paid down. The fact that the landowners see that value, needs to be recognised.   What is next? There are plans for additional LNG trains being added to the existing location for further LNG output.    In 2008, a significant gas discovery was made at the Elk-4 well of InterOil Ltd drilled in the Gulf Province. This was appraised by further drilling and the reservoir intersected in this well shown to be part of a much larger and better-quality reservoir by the drilling of the nearby Antelope 1 well.  Gas reserves of this field are estimated to be about 6.2 TCF (equivalent to about 1.2 billion barrels of oil). InterOil was a small entrepreneurial company with little experience, and whilst they tried to consider developing what became known as the Elk-Antelope gas field, they eventually sold down their assets to major international companies – Total of France and ExxonMobil of the USA, and to Papua New Guinea’s local oil and gas company – Oil Search, which merged with Santos in December 2021 in a $22 billion deal. The Antelope 2 appraisal well was tested by then licensee and operator, InterOil Ltd at a record, if not astonishingly, high gas flow rate of 705 million standard cubic feet of gas per day in 2009 (after PNG BN). Total, now rebranded as TotalEnergies, is the operator of the Papua LNG Project which seeks to develop this gas field separately, but in synergy with the PNG LNG Project.  After considerable delays, finalising a Gas Agreement with the State, they agreed upon outstanding issues and are now very much resolved to proceed with the project. TotalEnergies, as operator, submitted their application for the licences required for the Papua LNG Project on 28th May 2023.  The Papua LNG Project will develop the Elk-Antelope gas field and transmit the gas by a new pipeline to the Caution Bay site occupied by ExxonMobil. There Total will have four new electric driven LNG processing trains built, each of 1 million tonnes per year capacity next to the current trains of the PNG LNG Project. It is planned to place the remaining gas through ullage within the existing LNG plant of the PNG LNG Project, owned and operated by ExxonMobil and its partners. The condensate would be exported through the Caution Bay site at a separate loading facility, whilst some existing facilities of ExxonMobil will be utilised such as the site utilities, camps and the jetty, and some will be upgraded for consequent greater use. The Papua LNG Project aims to produce about 6 million tonnes LNG per annum (mta). The Papua LNG Project will produced gas from the Elk and Antelope gas field and transport it to liquefaction plant adjacent to the PNG LNG Project liquefaction plant (after TotalEnergies). The FEED (Front End Engineering and Design) work for the upstream field facilities started in July 2022 and was awarded to French firm Technip Energies NV. The FEED work for the downstream LNG plant started in March 2023 and was award together with the Engineering, Procurement and Construction (EPC) contract to JGC Corporation in partnership with Hyundai Engineering & Construction Co., Ltd. TotalEnergies has publicly confirmed that the project remains on track for a Final Investment Decision (FID) in 2024 with the first LNG production anticipated in late 2028/early 2029. The project is estimated to cost about US$12 billion and it is expected to expand Papua New Guinea’s GDP by 50%, or so. At present, there has been no announcement of project financing or LNG sales and purchase agreements that might underpin the project, though TotalEnergies remains confident, and perhaps a little, but appropriately, tight-lipped on such matters!  The shareholders in the project are TotalEnergies (operator) with a 40.1% stake; ExxonMobil (following the acquisition of InterOil in Feb. 2017) holding 37.1%; Santos Ltd. (following the acquisition of Oil Search Ltd in Dec. 2021) with 22.8%; while the Papua New Guinea government retains the option to exercise a back-in right for up to a 22.5% interest at the time of the grant of the project licences. In an innovation of a kind, the development of the P’nyang LNG Project for which the Government has negotiated, agreed and signed a Gas Agreement with the companies is now planned to take place after the construction of the Papua LNG Project starting in 2028, and again lasting for about four years. This project will not involve the building of any new liquefaction facilities, but will rather transmit its produced gas to the nearest trunk gas pipeline of the PNG LNG Project. The gas will then be transported by the PNG LNG Project for a commercially agreed tariff and delivered to the PNG LNG Project LNG plant where it will be tolled through the facilities and exported.  The P’nyang gas will therefore be what is known as “back-fill” gas for the PNG LNG Project LNG plant when it has already depleted and processed the gas from its project dedicated gas fields. P’nyang gas will therefore optimise gas throughput of the PNG LNG Project pipeline and facilities extending their life and making further income both for the companies and the Government. This obviates the need for new facilities and represents a significant capital saving.  The P’nyang LNG Project is estimated to cost about US$ 9 billion and seeks to develop about 4.4 TCF of gas reserves (about 860 million barrels of oil equivalent) and should extend the useful life of the PNG LNG Project facilities by about 10 years to around 2046. Gas Agreement for the P’nyang gas field development is signed 23 February 2022 Gas development beyond what is described above depends on linking other discovered gas fields that are smaller and more remote to the infrastructure and the development of yet-to-be- discovered gas fields. Exploration density in Papua New Guinea is very low due to limited infrastructure and access to petroliferous areas, so one can reasonably anticipate that if exploration drilling is encouraged significantly more gas reserves might be identified. With the combined processing capacity of the ExxonMobil-led PNG LNG Project (8.3 million tonnes per year) and the TotalEnergies-led Papua LNG Project (4 million tonnes per year), there will be an aggregate capacity to process 13.7 million tonnes of LNG per year (equivalent to about 300,000 barrels of oil per day). Some have dared to talk that a LNG output of 20 million tonnes per annum is possible for Papua New Guinea in the foreseeable future. However, a few hurdles remain, primary amongst which is a lack of new wildcat drilling to find new gas fields, perhaps due to uncertain and undefined petroleum sector policy. Papua New Guinea can still be successful in producing oil and gas well into the future, but it has to learn that it takes more than oil and gas reserves to create a viable and sustainable production industry.  A review of its past successes should indicate what it needs to do. It has the natural gas resources in volumes enough to keep the current and planned trains filled, and perhaps more trains, but it must continue to be proactive in all aspects of gas development planning, promotion and participation. Importantly, the promised benefits to landowner in particular and to the wider public need to be delivered by the Government.    Any lapse into baseless self-indulgent or impractical schemes could readily spoil what is essential a very good framework for continued gas development investment, notwithstanding the plans to change the regime structure to one of production sharing.  The future of PNG’s gas industry is firmly in the hands of the Government with excellent operators to assist it.
April 14, 2024
Ok Tedi Mining Limited (OTML) recently presented K100, 000 to the Ok Tedi Women’s Network (OWN) to support a fundraiser to purchase cervical cancer-screening equipment. The funding was presented during a Gala Fundraising Dinner organized under the patronage of OTML Managing Director and Chief Executive Officer, Kedi Ilimbit. The event drew support from business partners and the local communities, who purchased tables and donated cash. Other initiatives and in-kind contributions also bolstered the fundraising. A total of K168, 000 was raised for the acquisition of a thermal coagulator gun, GenXpert cartridges and accessories, which are vital in aiding early detection and prevention of cervical cancer. The fundraiser was held in consultation with OTML’s Health Services and Tabubil Hospital. OWN Chairperson, Jessica Bablis, expressed pride in working for a company that not only provides a platform to address women’s issues but also support initiatives proposed by its female workforce. “Cervical cancer is the second most frequent cancer among PNG women and 1, 400 women in PNG die from it every year. This equipment will contribute to the reduction in cervical cancer cases in Western Province and PNG, which is an amazing breakthrough. I thank all OTML and Business Partner employees for their support of our Pinktober fundraiser and most of all OTML MD Kedi Ilimbit for his visionary leadership to fundraise for something that will positively impact and improve the lives of many people in our host communities,” said Ms Bablis. Over the years OWN has spearheaded various initiatives during the global cancer awareness months of October and November, commonly known as “Pinktober” and “Movember.” Since 2019, with the support of the workforce, OWN have donned pink high visibility shirts during Pinktober to spotlight cancers impacting women. This evolved to include Movember, with the incorporation of blue high visibility attire to spotlight cancers impacting men. OWN members have also fundraised to support colleagues battling cancer. In 2023 the group also acquired and delivered an incubator to the Tabubil Hospital for premature babies encountering complications after birth. Mr. Ilimibit commended OWN for their tireless efforts in advocating for awareness on cancers for both men and women, and engaging in fundraising drives to invest in improved health services. “OWN has demonstrated their unwavering support for the well-being of our community. They embody the spirit of compassion and solidarity, and remind us of the impact that can be made when we come together for a common cause. Their contributions will make a lasting difference in the lives of many of our people in the community,’ said Mr Ilimbit.
April 14, 2024
Ok Tedi Mining Limited (OTML) recently presented K100, 000 to the Ok Tedi Women’s Network (OWN) to support a fundraiser to purchase cervical cancer-screening equipment. The funding was presented during a Gala Fundraising Dinner organized under the patronage of OTML Managing Director and Chief Executive Officer, Kedi Ilimbit. The event drew support from business partners and the local communities, who purchased tables and donated cash. Other initiatives and in-kind contributions also bolstered the fundraising. A total of K168, 000 was raised for the acquisition of a thermal coagulator gun, GenXpert cartridges and accessories, which are vital in aiding early detection and prevention of cervical cancer. The fundraiser was held in consultation with OTML’s Health Services and Tabubil Hospital. OWN Chairperson, Jessica Bablis, expressed pride in working for a company that not only provides a platform to address women’s issues but also support initiatives proposed by its female workforce. “Cervical cancer is the second most frequent cancer among PNG women and 1, 400 women in PNG die from it every year. This equipment will contribute to the reduction in cervical cancer cases in Western Province and PNG, which is an amazing breakthrough. I thank all OTML and Business Partner employees for their support of our Pinktober fundraiser and most of all OTML MD Kedi Ilimbit for his visionary leadership to fundraise for something that will positively impact and improve the lives of many people in our host communities,” said Ms Bablis. Over the years OWN has spearheaded various initiatives during the global cancer awareness months of October and November, commonly known as “Pinktober” and “Movember.” Since 2019, with the support of the workforce, OWN have donned pink high visibility shirts during Pinktober to spotlight cancers impacting women. This evolved to include Movember, with the incorporation of blue high visibility attire to spotlight cancers impacting men. OWN members have also fundraised to support colleagues battling cancer. In 2023 the group also acquired and delivered an incubator to the Tabubil Hospital for premature babies encountering complications after birth. Mr. Ilimibit commended OWN for their tireless efforts in advocating for awareness on cancers for both men and women, and engaging in fundraising drives to invest in improved health services. “OWN has demonstrated their unwavering support for the well-being of our community. They embody the spirit of compassion and solidarity, and remind us of the impact that can be made when we come together for a common cause. Their contributions will make a lasting difference in the lives of many of our people in the community,’ said Mr Ilimbit.
April 02, 2024
The Papua New Guinea Chamber of Resources and Energy (PNG CORE) recently hosted an Industrial Wind-Down Media Function, providing a pivotal networking platform for the resources sector. Held in Port Moresby on March 22nd, the event attracted nearly 100 attendees, comprising members, stakeholders, and media representatives, facilitating strategic collaboration and offering insights into the industry's future. Designed to foster dialogue among stakeholders and members within PNG's mineral, petroleum, and energy sectors, the event centered around the theme of "Connect, Communicate, and Collaborate." Attendees engaged in hours of networking, participated in information sessions led by the PNG CORE Communications Committee, witnessed the official launch of PNG CORE’s 2024 Events Calendar, and celebrated member achievements. Networking emerged as a central theme during the event, with a focus on its importance in identifying opportunities, sharing knowledge, accessing resources, and building brands. The media's role in shaping public opinion and facilitating decision-making between the resource and government sectors was highlighted, underscoring the need for informative and independent reporting. This event gave the media professionals the chance to network, plan coverage, uncover in-depth stories, and engage audiences with timely content. In his opening address, PNG CORE Senior Vice President Richard Kassman emphasized the significance of exploring additional opportunities within the resources sector and its role in facilitating knowledge exchange and networking. Mr. Kassman urged media professionals to prioritize factual reporting, without political bias and emphasized the importance of promoting educated discourse among Papua New Guineans. “This is a very important topic, and I'm asking the media to look at the facts and allow our people and encourage the discourse in our people." “We want to develop Papua New Guineas knowledge and not the knowledge you read about on social media. The people of Papua New Guinea rely on educated Papua New Guinean for information, insight and to have a discussion on their behalf,” Mr Kassman added. Looking ahead, PNG CORE aims to continue its leadership in representing the mining and petroleum sectors, both locally and internationally. As part of its mandate to promote PNG as an investment destination, the Chamber will collaborate with the media to amplify its efforts and enhance industry visibility. The event served as a critical platform for discussing sector challenges and exploring PNG CORE's upcoming initiatives. During the event, additional information about PNG CORE Council and its Committee was shared including the official announcement of PNG CORE 2024 Events Calendar, marking the Industrial Wind Down as their second significant event. PNG CORE Council and its Committee play a vital role in the industry. Eight committees provide oversight to the councils’ strategic activities to address various agendas and issues that affect the industries, one of which is the Communications Committee, which was recently revived. The committee was reactivated this year as part of the chairman’s effort to foster closer working relationship between industries and members and external stakeholders, especially with the Chamber’s media partners. There are issues affecting the nation’s industries, by which the committee will be providing guidance to Chamber’s council on possible ways to address those issues through the media. Building on PNG CORE’ collaboration in the pasts, they are looking forward to the media’s support to assist with this effort. PNG CORE is also tasked to promote PNG as an investment destination. The Chamber will be doing so predominantly in international events, extending invites to the media to come along and be part of the campaign in a collaborative effort. Additionally, the 2024 Calendar of Events reflects PNG CORE's commitment to hosting diverse forums and conferences, including international engagements aimed at showcasing PNG's potential as an investment hub. The 2024 Calendar of Events are as follows: Prospectors and Developers Association of Canada from March 3-6 in Canada  Industrial Wind Down March 22 -  Port Moresby Security Summit April 17 Port Moresby Resource Week – Canconex, Career Fair, HR Forum- June 3-5 Port Moresby Annual General Meeting July - Port Moresby Emergency Response Challenge (ERC), September - Port Moresby PNG Resources and Energy Investment Conference, December 8-11 - Sydney, Australia Looking ahead, PNG CORE aims to continue its leadership in representing the mining and petroleum sectors, both locally and internationally. As part of its mandate to promote PNG as an investment destination, the Chamber will collaborate with the media to amplify its efforts and enhance industry visibility. The successful event showcased PNG CORE’s lead in representation of the mining and petroleum sectors, including related industries in PNG, highlighting its innovation and collaboration in hosting both international and local conferences, workshops and seminars and producing publications relevant to the industry. “The collaboration between the resources sector and the media is essential in driving national development and shaping the future of Papua New Guinea. Both entities play integral roles as nation builders, contributing to the economic growth and prosperity of the country,” Mr Kassman said.
April 02, 2024
The Papua New Guinea Chamber of Resources and Energy (PNG CORE) recently hosted an Industrial Wind-Down Media Function, providing a pivotal networking platform for the resources sector. Held in Port Moresby on March 22nd, the event attracted nearly 100 attendees, comprising members, stakeholders, and media representatives, facilitating strategic collaboration and offering insights into the industry's future. Designed to foster dialogue among stakeholders and members within PNG's mineral, petroleum, and energy sectors, the event centered around the theme of "Connect, Communicate, and Collaborate." Attendees engaged in hours of networking, participated in information sessions led by the PNG CORE Communications Committee, witnessed the official launch of PNG CORE’s 2024 Events Calendar, and celebrated member achievements. Networking emerged as a central theme during the event, with a focus on its importance in identifying opportunities, sharing knowledge, accessing resources, and building brands. The media's role in shaping public opinion and facilitating decision-making between the resource and government sectors was highlighted, underscoring the need for informative and independent reporting. This event gave the media professionals the chance to network, plan coverage, uncover in-depth stories, and engage audiences with timely content. In his opening address, PNG CORE Senior Vice President Richard Kassman emphasized the significance of exploring additional opportunities within the resources sector and its role in facilitating knowledge exchange and networking. Mr. Kassman urged media professionals to prioritize factual reporting, without political bias and emphasized the importance of promoting educated discourse among Papua New Guineans. “This is a very important topic, and I'm asking the media to look at the facts and allow our people and encourage the discourse in our people." “We want to develop Papua New Guineas knowledge and not the knowledge you read about on social media. The people of Papua New Guinea rely on educated Papua New Guinean for information, insight and to have a discussion on their behalf,” Mr Kassman added. Looking ahead, PNG CORE aims to continue its leadership in representing the mining and petroleum sectors, both locally and internationally. As part of its mandate to promote PNG as an investment destination, the Chamber will collaborate with the media to amplify its efforts and enhance industry visibility. The event served as a critical platform for discussing sector challenges and exploring PNG CORE's upcoming initiatives. During the event, additional information about PNG CORE Council and its Committee was shared including the official announcement of PNG CORE 2024 Events Calendar, marking the Industrial Wind Down as their second significant event. PNG CORE Council and its Committee play a vital role in the industry. Eight committees provide oversight to the councils’ strategic activities to address various agendas and issues that affect the industries, one of which is the Communications Committee, which was recently revived. The committee was reactivated this year as part of the chairman’s effort to foster closer working relationship between industries and members and external stakeholders, especially with the Chamber’s media partners. There are issues affecting the nation’s industries, by which the committee will be providing guidance to Chamber’s council on possible ways to address those issues through the media. Building on PNG CORE’ collaboration in the pasts, they are looking forward to the media’s support to assist with this effort. PNG CORE is also tasked to promote PNG as an investment destination. The Chamber will be doing so predominantly in international events, extending invites to the media to come along and be part of the campaign in a collaborative effort. Additionally, the 2024 Calendar of Events reflects PNG CORE's commitment to hosting diverse forums and conferences, including international engagements aimed at showcasing PNG's potential as an investment hub. The 2024 Calendar of Events are as follows: Prospectors and Developers Association of Canada from March 3-6 in Canada  Industrial Wind Down March 22 -  Port Moresby Security Summit April 17 Port Moresby Resource Week – Canconex, Career Fair, HR Forum- June 3-5 Port Moresby Annual General Meeting July - Port Moresby Emergency Response Challenge (ERC), September - Port Moresby PNG Resources and Energy Investment Conference, December 8-11 - Sydney, Australia Looking ahead, PNG CORE aims to continue its leadership in representing the mining and petroleum sectors, both locally and internationally. As part of its mandate to promote PNG as an investment destination, the Chamber will collaborate with the media to amplify its efforts and enhance industry visibility. The successful event showcased PNG CORE’s lead in representation of the mining and petroleum sectors, including related industries in PNG, highlighting its innovation and collaboration in hosting both international and local conferences, workshops and seminars and producing publications relevant to the industry. “The collaboration between the resources sector and the media is essential in driving national development and shaping the future of Papua New Guinea. Both entities play integral roles as nation builders, contributing to the economic growth and prosperity of the country,” Mr Kassman said.

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