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Kua Sees Bright Future for PNG Oil and Gas Industry

by PNG Business News - April 26, 2021

Petroleum Minister Kerenga Kua sees a bright future for the Oil and Gas industry.

According to Kua, the price of a barrel is currently over US$60 (K207.63).

“The outlook for the industry is still good and positive and the industry is still in very strong shape,” he said. 

The Covid-19 pandemic, he said, remained a challenge to the industry.

However, the operator of the PNG LNG project, ExxonMobil PNG Ltd, took a professional approach to deal with the issue.

Globally, US oil prices are down 42 cents (K1.47), or 0.7 per cent, to US$62.71 (K219.89) a barrel, after rising 6.4 per cent last week as a result of the revival of Covid-19 cases around the world and countries imposing tougher sanctions that would hurt economic growth.

Oil Search Ltd, a partner in the PNG LNG project, recently said that the increase in Covid-19 cases in PNG has had no impact on its operations and production.

“To date, there has been no impact to production in our Oil Search operations in PNG as a result of the recent surge in the Covid-19 cases,” Kua said.

“The increase in confirmed Covid-19 cases in PNG has prompted Oil Search to enact its crisis and emergency management plans.

“The health and safety of our employees remain the highest priority and teams have been assembled in PNG and Sydney to deploy additional support to protect our people and to ensure the safety and reliability of our operations.

“At our PNG field locations, we continue to operate under precautionary protocols established in 2020, which includes redeployment of non-essential personnel, restriction of access and travel to field locations and implementation of strict preventative measures and quarantine zones.”

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Minister Says Pasca Talks In Progress

Twinza's Pasca is the topic of negotiations. According to Petroleum Minister Kerenga Kua, a plant in the Gulf is currently underway. Kua predicted that reaching an agreement on the country's first offshore oil project would take some time. “(Project) still under negotiations,” he said. “Generally, it could take a few years to negotiate an agreed position. Once in a while, it takes less time. Patience is important to all sides.” Twinza has previously stated that the talks were over the fiscal terms for the construction of the gas-condensate field in the Gulf of Papua. “The company is committed to working collaboratively with the Government to deliver an agreement that allows the project to move forward toward development, while providing a higher state take than previous projects,” country manager Roppe Uyassi said. “Once the Pasca A gas agreement and the petroleum development license are in place, the project is well-positioned to enter the front-end engineering and design phase later this year.” Twinza was also excited to discuss significant non-financial prospects with the SNT, such as domestic business commitment, third-party access to infrastructure, and national material. “These matters were differentiated from land-based projects as Pasca A field is planned to be the first offshore development in PNG.” Meanwhile, according to company records, Twinza's main asset is the offshore Pasca A liquids-rich gas field. The Pasca A field development plan had been completed, the petroleum inventory had been approved, and the program to receive full-field development licenses had been completed. The Pasca A development will become the country's first offshore field development after all requisite government approvals are issued.

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PNG Business News - December 21, 2020

Kumul Petroleum Hopes to Work with Developers of Papua LNG Project

Kumul Petroleum Holdings Ltd (KPHL) hopes to work with the developer of the Papua LNG Project and its partners.According to Managing director Wapu Sonk, KPHL hoped to work with Total and the Papua LNG joint venture partners to start the front-end engineering design work and begin the liquefied natural gas (LNG) financing and marketing work.It can be recalled that Petroleum Minister Kerenga Kua has said that an announcement would be made where the Papua LNG Project would be a stand-alone project towards next year’s design phase. He said that a meeting would be held between the government and the Total senior management this month. “If the decision is made, it will be positive for PNG because we will begin to see some early work going on,” Kua said.The country’s national gas and oil company, KPHL is in charge of managing the State’s 16.57 per cent equity in the ExxonMobil operated US$19 billion (K64.91 billion) PNG LNG project. This has allowed the firm to become the third-largest player in the largest single investment made by the country. Sonk added that even with this pandemic, there had been no material impact on the project and its operations, besides a few delays in various areas. “PNG LNG project performed very well in terms of LNG production,” he said. “The main challenge has been LNG prices, which has been very low in Q1 to Q2 and in the third and fourth quarter, the prices have improved to approximately US$6.40 to US$7.50/MMbtu (K21.98 to K25.76 million British thermal units) from as low as US$2.40/MMbtu (K8.24/MMbtu) early this year. LNG and oil price has impacted all the joint venture partners and us at Kumul Petroleum as well as with MRDC (Mineral Resources Development Company), no exception. PNG Government also is impacted as a result.He said, “We hope that the oil and LNG prices will recover and be stabilised given there is now a vaccine for the Covid-19. ExxonMobil maintains the great job in optimising and improving production in a safe and environmentally friendly manner.”Sonk added that KPHL paid K200 million as dividend due to better cost commodities last year. “We have been able to continue to train Papua New Guineans at the Kumul Petroleum Academy, deliver cheap and reliable power into Port Moresby through NiuPower, delivered the rural electrification programme mostly in Hela and Southern Highlands connecting Nipa to Tari, Tari to Koroba and Tari to Hides (Juni) and Ialibu to Kagua,” he said.

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