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Oil Search Seeking Beneficial Outcome with PPL for 40MW PNG Biomass and Solar Farm
by PNG Business News - May 31, 2021
Oil Search confirms that the Company received a letter from PNG Power Limited (PPL) that could significantly impact the PNG Biomass Power Purchase Agreement (PPA) which was signed between both companies in December 2015. The Company has analysed the implications of the letter’s unforeseen ‘notice of termination’ and is currently engaging with all key stakeholders including Markham landowners and development partners to assess the potential impact of a cancelled PPA.
The PNG Biomass project is aligned with the PNG Government’s ambition to diversify the country’s energy mix and complement the drive to create jobs and long-term opportunities for the people of PNG. The project will provide more than 500 direct jobs and stimulate many more across industries in the region. It also has the potential to make PNG a leader in renewable energy and enhance the country’s reputation globally.
“For the power sector and the people of our country, it is important that we find a way forward to bring the project’s lowcost reliable energy onto the Ramu Grid. We intend to work with PPL to find a resolution to move forward together. We are ready to build the power plant and solar farm. We have met all obligations in the PPA under our control in order to reach Financial Close and we have strong funding support from international agencies who recognise the social benefits of this project. We have a dedicated team ready to work with PPL to support them to meet their obligations. We are ready to be part of the power solution and the energy mix and help the country transition to 100% renewable by 2050,” said Leon Buskens, Oil Search Country Manager.
PNG Biomass has enormous energy benefits for PNG. It will provide the Ramu grid with up to 40MW of renewable, clean, affordable and reliable energy, from biomass power generation and a solar farm. The project will help stabilise the Ramu Grid and reduce blackouts in Lae. In 2018, Oil Search lowered the project’s power price significantly at the request of PPL. Ever since, the Company has continued to work closely with all stakeholders, including lenders, grant funders and contractors, to ensure an extremely competitive levelised cost of power that will result in material savings to PPL. In the process, Oil Search has attracted grants from the international community to the benefit of PPL worth over USD40 million (K140 million).
“This is a compelling project for reliable power generation and creates large financial savings for PPL. Our PNG Biomass project is an excellent example of sustainable development, attracting widespread interest and admiration from the international community. PNG Biomass is truly a world-class sustainable tree farming and energy operation. This is an outstanding opportunity for PNG to showcase what it can do on the global stage,” adds Mr Buskens.
The local inclusive economic growth that can be generated with PNG Biomass is substantial. PNG Biomass has already invested K18 million into the communities in the Markham Valley in the form of land rentals, employment, labour, contracts, sponsorships and much more. Mutual trust and confidence with the landowners have been built over more than a decade. The outcome of this partnership is a leading-edge precision tree farming operation and a world class nursery employing state of the art monitoring, measurement and testing. A comprehensive baselined environmental management plan has been developed across all aspects including air and water quality, soils data as well as individual tree growth, leaf analysis and GPS area mapping. The automated seedling production system produces a consistent supply of high-quality fibre cell seedlings and is one of only a handful of such systems worldwide. Specialised planting techniques are employed for deeper soil cultivation, resulting in minimal soil erosion and disturbance.
“Hundreds of local communities, including many women and youth, are provided opportunities through our PNG Biomass project. Out of the 500 direct jobs we are creating, there are already 300 landowners and locals working. They are planting over 20 million trees on 16,000 hectares of low production grass land,” said Mr Buskens.
Oil Search confirms that the Company is committed to work with the PNG Government to provide sustainable opportunities that directly align with the government’s national development priorities in electrification, energy mix diversification, renewable energy, climate action under the Paris Agreement, reforestation, and sustainable inclusive economic growth. “We have designed this project to be part of powering PNG and empowering our rural communities. We remain optimistic and shovel-ready to deliver,” concludes Mr Buskens.
PNG Business News - March 29, 2021
Oil Search Operating With Measures
Oil Search claims that stringent quarantine procedures, behaviour restrictions, and personnel roster guidelines put in place last year have secured the company's activities in the region. In a statement, Oil Search said that no cases of Covid-19 had been identified in their field operations. In addition to the number of Covid-19 cases around the world, the organization has increased its efforts to protect its employees and ensure secure and efficient operations. The instituted ways include: The organization is bringing its disaster and emergency response strategies into effect, with staff in PNG and Sydney closely handling and tracking the situation. PNG field sites are continuing to follow precautionary procedures placed in effect last year, which included redeploying non-essential personnel, limiting access and transport to field areas, and putting in place stringent preventative measures and quarantine zones; Imposing further RISK Reduction Steps, such as acquiring further monitoring facilities and expanding the quarantine duration for staff and contractors heading to the field; Reducing the Port Moresby office's workforce to a core community of medical, defence, and facilities workers, with regular checking of office employees; and, Procurement and distribution of nearly 500,000 pieces of personal security equipment to the National Government. Oil Search managing director Dr Keiran Wulff said, “The Covid-19 is a growing threat to the people of Papua New Guinea. “We are doing everything to ensure that our employees can continue to work safely, and to support their families as they do so.”
PNG Business News - March 31, 2021
Oil Search Environmental Management Certified as ISO 14001 Compliant
Oil Search continues to place constructive environmental conservation at the forefront of its activities. To that end, it maintains an efficient environmental protection scheme that complies with the ISO 14001 global standard's specifications. The Company is dedicated to preserving and reducing environmental impact in the communities. Oil Search's oil and gas facilities are located in some of the world's most isolated and environmentally diverse locations. It is critical that its infrastructure and management processes are equipped to handle the threats that its operations pose to the natural environment. Leon Buskens, Oil Search Country Manager said, “This is an outstanding result for Oil Search. The ISO 14001 recertification provides assurance to our shareholders and other stakeholders of our commitment to safe and environmentally responsible operations.” Over the course of five days, an analysis of the Company's Environment Management System (EMS) was performed through the Oil Search PNG Business Unit (BU). The audit looked into Oil Search's environmental inspection results, EMS training logs, and relevant contracts that included clauses requiring vendors to follow the company's environmental policies and procedures. The organization first obtained ISO 14001 certification in 2009 and has retained it for the last ten years. Oil Search is committed to recognizing and mitigating the detrimental effects its activities can have on workers and contractor personnel, local community residents, and the ecosystem as a responsible operator, as well as defining opportunities for quality development and optimizing productive business operations. Oil Search's contributions to water, pollution, biodiversity, land use, food care, education and security, and carbon mitigation are outlined in concrete strategies for Health, Welfare, Environment and Security, Social Responsibility, and Climate Change policies. The company takes a cautious approach to address possibly harmful environmental and social effects on the broader economy and surrounding climate. This entails frequent consultation with communities on how the company's activities can affect them, as well as ensuring that their property, culture, wealth, and rights are safeguarded. Oil Search has set 2021 Key Success Indicators for waste management and greenhouse gas emissions reduction as part of its ongoing pledge to good environmental performance. This involves reducing onsite waste disposal and introducing greenhouse gas (GHG) reduction measures that lead to a GHG level reduction of more than 30% for all managed assets by 2030.
PNG Business News - February 15, 2021
Oil Search Happy with Papua LNG Progress
Oil Search Ltd is happy to see the progress of the US$12 billion (K41.38 billion) Papua LNG project.According to Oil Search managing director Dr Keiran Wulff, “We are pleased to see further progress achieved on the Papua LNG. This milestone highlights the commitment from the Government towards Papua LNG and is a significant step in de-risking the project. It also demonstrates increasing alignment between the Government and the joint venture partners. We look forward to progressing the Papua LNG and announcing further milestones consistent with our strategic review announced last November.”Total, the operator of the project signed the agreement - together with ExxonMobil and Oil Search - signed an agreement with the government early this week. This is seen as a final step under the Papua LNG gas agreement to proceed with the project fiscal stability. Total managing director, meanwhile, Jean-Marc Noiray said that they welcome the “whole stabilisation of the project”.“The Feed (front end engineering design) itself will last between 15 and 18 months, from the moment we reach the final investment decision,” he said. “And from final investment decision to first gas, we have about four years of construction. It’s a long journey before we get to the first gas, and the first revenues for the developers and the country.”
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PNG Business News - June 15, 2021
PNG Vanilla Company Partners Expo2020 Team
Dr. Nancy Irwin (left) with the Deputy Commissioner General for Expo2020 and Head of the PNG Expo2020 Secretariat, Mrs. Jacinta Warakai-Manua began the partnership to tell the PNG Vanilla story in Dubai, by exchanging ideas in Port Moresby last week. A vanilla production and export company is partnering with the PNG Expo2020 Team to promote their products in the Dubai World Exposition that starts in October this year. KAMAPIM, a company working with landowners in the Madang and Morobe Provinces produces top quality vanilla beans and is already exporting to the EU market. The Managing Director of the company Dr. Nancy Irwin, met with the PNG Commissioner General to Expo2020 Ambassador Joshua Kalinoe and his Deputy Mrs. Jacinta Warakai-Manua in Port Moresby last week to firm up the arrangements. Dr. Irwin said Kamapim (pidgin for develop and to improve) concentrates its efforts in producing the best quality bean for the international market through quality assurance production methods. “PNG farmers can grow anything, they have instinctive ability to grow well any crops. When I first started the project, the quality of the beans were poor, full of fungus due to lack of processing knowledge. We saw huge potential of the organically grown beans and started working with landowners through a cooperative production and marketing structure to improve quality” “The company provide extension services to farmers and buy the beans directly, ensuring farmers are paid a fair price for their efforts”, she said. Dr Irwin said the beans are tested internationally and are consistently classed as the top-quality A grade level. “While PNG has a good perception of growing environment friendly organic vanilla beans, the challenge is for the relevant Government authorities to work with farmers to improve quality. I believe the cooperative production methods applied by our company, Kamapim, could be used nationally as one of the models to improve quality for the export market as well as to maximize revenue gain for farmers”, Dr. Irwin said. She said the company is looking forward to partnering with the PNG Expo2020 Team to tell the PNG story and to connect with niche importers in Dubai and the Arab world in general. Dr. Irwin said the company would promote its products in specially branded PNG Expo2020 containers to create visibility for the country as well as to preserve quality at the company’s cost.
PNG Business News - June 15, 2021
PNGEITI Praises Open Dialogue to Reopen Porgera Mine
The PNG Extractive Industries Transparency Initiative (PNGEITI) has praised the open stakeholder dialogue culminating in reaching consensus to re-open the Pogera Mine in Enga. Parties in April this year sanctioned a “Framework Agreement for the New Pogera Project” which spells out the roadmap to reopen the mine. Mark Bristow, CEO and President of Barrick Gold last week explained key elements of “Framework Agreement for the New Pogera Project” at a public forum at the Piam Oval in Pogera witnessed by PNG Prime Minister James Marape, landowners and other leaders. In the new agreement, PNG stakeholders will together own a 51 % equity stake in the mine while Barrick Niguini Limited (BNL), a joint venture company in which Barrick and Zijin Mining Group each own 50% will hold 49 %. BNL will remain the mine operator. At the end of the first ten year period, the PNG stakeholders will have the option to purchase BNL’s 49 % PNGEITI Head of Secretariat Lucas Alkan remarked that the open discussion throughout the negotiation process on the part of the mine operating lead, Government and landowners has culminated in this agreement signed happily by all parties. “We at the PNGEITI congratulate the Government and the project lead Barrick Gold and other stakeholders for reaching a consensus decision to reopen the mine. “Pogera has been an economic powerhouse for many years and people in the country have been waiting for the outcome. “We commend the Prime Minister, the President and CEO of Barrick Gold Mr. Mark Bristow for the leadership in ensuring that the negotiations were done in the transparent and open manner. “PNG Extractive Industries Transparency highly encourages such openness in the negotiating process for resources benefits and importantly the responsibilities that each stakeholder must take on to ensure smooth flow of proceeds. “We look forward to working with the Government and the project operator in the areas of transparency and accountability to help derive best value for all stakeholders. PNGEITI commitment to reporting on developments in the mining and petroleum space is becoming stronger with new reporting dimensions taking shape as we making progress in promoting transparency and accountability in the PNG mining and petroleum industry” Mr. Alkan said.
PNG Business News - June 14, 2021
BPNG Goes For Review
Treasurer Ian Ling-Stuckey has revealed the terms of reference for a review of the Bank of PNG, as well as the members of the review panel. Former Chief Secretary Robert Igara will lead the study, which was planned in the Supplementary Budget for 2020. Former central bank governor Sir Wilson Kamit and Australian professor Dr Stephen Howes are the two members. “These very eminent people, all of whom have detailed experience of the PNG financial system and reform, will be working to a term of reference approved recently by the NEC,” Ling-Stuckey said. “It is the first review of the central bank and the Central Banking Act 2002 since Sir Mekere Morauta’s financial system reforms when he was prime minister from 1999 to 2002. “Much has changed since then, and the effects of the coronavirus pandemic, along with substantial technological advances, have made the need for a review even more urgent. “The aim is to modernise the bank and the legislation in line with international developments, and make it more responsive to prevailing circumstances while preserving its independence.” The study is scheduled to be finished in time for Parliament's November session. “An independent advisory group was also established by the late Sir Mekere when looking at the changes that led to the Central Banking Act 2000,” he said. “Igara, currently the University of Papua New Guinea chancellor, was chief secretary at the time, and Sir Wilson was the governor of the Central Bank. “Prof Howes, head of the Development Policy Centre at the Australian National University, has long been involved in PNG research and advice and consultation, particularly in relation to national development.” Reference: The National (8 June 2021). “BPNG going for review”.