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PNGEITI Congratulates Richard Kassman as New Industry Chamber President
by PNG Business News - May 18, 2021
Richard Kassman was recently named President of the Papua New Guinea Chamber of Mines and Petroleum, and the PNG Extractive Industry Transparency Initiative (PNGEITI) congratulated him.
He recently took over for Gerea Aopi, who had served in the role admirably. Richard Kassman is the Director of Corporate Affairs, Total E&P PNG Limited, and was vice president of the Chamber at the time of his appointment. He is an active member of the PNGEITI Multi-Stakeholder Group (MSG) and was vice president of the Chamber at the time of his appointment.
Kassman is a member of the PNGEITI MSG, which oversees the Global Extractive Industries Transparency Initiative (EITI) implementation in Papua New Guinea.
“As we all know Kassman is a dedicated professional with active engagement in both the Government and private sector in Papua New Guinea with deep commitment within those various roles he plays,” PNGEITI Head of National Secretariat Lucas Alkan said.
“His insights and contributions to the advancement of EITI reporting in this country have resonated with great value and the PNGEITI MSG is privileged to have him on board.
“At this juncture, we acknowledge his invaluable commitment and contribution over the years since PNG commenced implementing the EITI 7 years ago. Now as elected President of the PNG Chamber of Mines and Petroleum, we look forward to a heightened working relation with regards to the role that the industry plays as the key stakeholder in implementing and maintaining PNG’s position as an EITI affiliated member country.”
Kassman's expertise, according to Alkan, will significantly enhance the work of the PNG Chamber of Mines and Petroleum in representing the EITI in PNG, as well as giving the cause more visibility by building on the momentum of the campaign, which has generated many financial year reports from the extractive sector.
PNG Business News - May 03, 2021
Chamber Calls On Government to Pay Its Dues
The Port Moresby Chamber of Commerce and Industry has asked the government to pay over K100 million in unpaid dues to its members in order to help them develop their businesses. Stacey O'Nea, the Chamber's chief executive officer, stated that they are not after free handouts or a stimulus budget for companies; rather, they want what is owed to them to be compensated so that their businesses can be stimulated. “Many of our members are starting to scale down and are letting go of their employees due to the impact of COVID-19 on the country’s economy, and businesses are unable to continue to save jobs in the current prolonged COVID-19 threat environment,” she said. “The sensitive issue of job loss also has an impact on livelihoods in PNG’s extended family system and has a direct spillover effect on social and security issues. “Coupled with ongoing concerns on revenue challenges, subsequent profit decline, depreciating kina, forex availability, increased fuel and security costs and COVID-19 restrictions are a myriad of serious challenges shared across our businesses and industries.” O'Nea stated that the chamber is in talks with relevant authorities over receiving government compensation owed to its members. “While we are thankful for the Government’s efforts this year towards settling a number of urgent arrears for rentals, goods and services, we urge continuity of payments for contracts that have satisfied the vetting process, as they will help act as a stimulus to sustain operations in these times for our businesses and industries,” she said. Meanwhile, Opposition Leader Belden Namah has said that the economy is in free fall and has urged the government to ease controls on enterprises and social events as soon as possible while maintaining the new standard. Lockdowns, he claimed, are killing the economy by throwing workers out of jobs and forcing companies to close.
PNG Business News - May 04, 2021
Chamber of Mines and Petroleum Appoint Kassman as President
The PNG Chamber of Mines and Petroleum has appointed Richard Kassman as its current president. Kassman, who has served as the chamber's vice president for the past three years, succeeds Gerea Aopi, who began his career in the industry in 1991. Following the announcement, Kassman praised the outgoing president, Aopi, for his extensive work and guidance. “My first task as president-elect is to thank outgoing president Gerea Aopi. A colossus of a man whose contribution to our industry and indeed his beloved Papua New Guinea is unrivalled. “Gerea always guided the discourse ensuring being cognizant with national interests, when the chamber represented its diverse membership and promoted the industry. He served with class and distinction. He was measured, thoughtful and compassionate, and when required, frank and direct. Hallmarks of a courageous servant leader,” Kassman said. In his final remarks, Aopi put the industry's attempts to stay open during the COVID-19 pandemic into perspective. “Amidst the onset of the COVID-19 pandemic’s impact on the country last year, the chamber has been active in discussing legislation and policy that affects our industry. “Constant dialogue and discussion amongst council members representing mining and petroleum have been at the core of our engagement in the national and political space,” he said. Kassman, who works for Total E&P PNG Limited as the Public Affairs and External Communications Head, spoke about the mining and petroleum sector's future as well as the chamber's work. “The chamber plays a crucial role in providing discourse on major national issues. And it represents members who are always ready to step in to assist the national leadership in times of national calamity,” he said. The Chamber of Mines and Petroleum is PNG's apex body for the mining and petroleum industries, with a diverse membership that spans both the mineral and industry sectors. It comprises the majority of PNG's productive mining and petroleum firms.
PNG Business News - June 08, 2021
PNG Chamber Shoots Down PSA Regime Proposal
Prime Minister James Marape said the government could look at a hybrid tax regime for mining and oil and gas after members of the Papua New Guinea Chamber of Mines and Petroleum pointed out the flaws of a production sharing agreement (PSA) system. John Chambers, the general manager of Santos in PNG, warned that PSA-style regimes had been detrimental to other countries such as Bangladesh, Indonesia and Brazil. Speaking on behalf of the PNG Chamber, Chambers also warned that any changes to PNG’s current regimes would "impact near-term investment unless you can define how that new regime is going to be and articulate it properly." In the PNG Chamber's webinar, Marape confirmed that changes to the country’s regulatory and fiscal regimes for PNG’s mining and petroleum sector were being drafted and would be circulated soon. But he has also reassured the sector that the changes would be made "in consultation" with them and implemented by 2025, PNG's 50th year of independence. To support Chambers' argument against a PSA, the group heard from two organisations on the regime's downside Chris Graham, Wood Mackenzie’s Vice-President for Energy Consulting, Asia Pacific, said successful PSAs placed a greater administrative burden on government. Emma Beatty, Director of Research at MineHutte, said 99 per cent of countries with active mining industries had a royalty and tax-based system and that PSAs "made projects harder to finance for miners, because lenders didn’t understand them." Due to their greater complexity, PSAs also could exclude smaller junior mining companies, Beatty noted. The Marape government has been looking at introducing PSAs into its new resources laws, which the PNG Chamber and the industry has generally opposed . Under a PSA, the State maintains ownership of its mineral resources but engages a developer to run a resources project, in return for a share of production. That, however, is a shift away from the current regime, where a developer controls the resources in return for paying various taxes and rents, and granting the State a mandatory minority share in any project. Following the Chamber's presentations, Marape conceded that PSAs "may not be the way to go" and suggested that a "hybrid" system might work better for PNG. There was no change to the current regime as yet, the Prime Minister told the audience, but that the intention was there as he welcomed the "healthy debate and consultation." "But, whatever form it [reform] takes, 2025 is the benchmark date," he said.
PNG Business News - July 22, 2021
Oil Search Considering Merging with Santos
Santos, an Australian oil firm, announced its plan to combine with Oil Search Limited. Santos proposed a non-binding indicative merger last month with the goal of making the two companies the regional energy champions. The proposed merged entity has a market capitalization of A$22 billion (K56 billion), putting it among the top 20 ASX-listed companies and the top 20 global oil and gas companies. This means, among other things, that the merger will have a diverse portfolio of high-quality, long-life assets spanning Australia and Papua New Guinea, a solid balance sheet with ample cash to support expansion choices, and an investment-grade credit rating. The merger plan, if approved, would be conducted through a Scheme of Arrangement in which Oil Search shareholders would receive 0.589 new Santos shares for each Oil Search share held, according to Santos in a market disclosure to the Australian Stock Exchange. Following the scheme's acceptance, Oil Search shareholders would control 37% of the combined company, while Santos shareholders would own 63%. Based on Santos' closing price on June 24, 2021, the ownership ratio suggested a transaction price of A$4.25 (10.92) per Oil Search share. This was a 12.3% premium to the Oil Search closing price of A$3.78 (K9.72) on June 24, 2021, and a 9.8% premium to the Mubadala block trade selling price of A$3865. (K9.92). Kevin Gallagher, managing director and chief executive officer of Santos, said the merger will bring more alignment to PNG, allowing for the development of important projects such as Papua LNG, as well as the creation of new employment and support for the local economy. Santos, according to Gallagher, has proposed a true merger in which ownership of the combined firm is based on proportionate contribution and value. “The strategic rationale for a merger is clear and offers superior value to Oil Search shareholders rather than continuing on a standalone basis. “Santos continues to believe that the Merger Proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders.” Oil Search stated in its ASX market update that it is open to receiving and engaging with any proposal that is in the best interests of its shareholders. While the company's board of directors agrees with Santos that combining the two firms makes strategic sense, the conditions must be fair to the company's shareholders, which the terms proposed by Santos are not. Despite Santos shareholders holding 70% more shares than Oil Search shareholders, Oil Search maintains that the proposed conditions provide just a 6.8% premium based on Friday's closing share prices for Oil Search and Santos. According to the firm, no such proposal has been made at this time. Reference: Post-Courier (21 July 2021). "Oil Search Open To Merger with Santos".
PNG Business News - July 21, 2021
Study Says Sweet Potato Growers Have Received Significant Insights into Customers Buying Habits
In Papua New Guinea (PNG), sweet potato (kaukau) growers have received significant insight into customer buying habits, which is assisting them in identifying new market possibilities. The recent market analysis, which was supported by the Papua New Guinea-Australia Partnership and conducted by the Australian Centre for International Agricultural Research, revealed that an increasing number of consumers in Port Moresby prefer to buy fresh produce from supermarkets, citing convenience and safety as reasons. While this trend may result in fewer consumers at conventional farmer markets, PNG and Australian experts believe it may open up new marketplaces for rural people. “Farmers are looking for stable markets where they can receive more consistent prices for better-quality produce,” said Professor Philip Brown from Central Queensland University (CQU), who is leading the research project. “The research shows that consumer behaviour is likely to support an expansion in the supermarket sector in large urban centres and this is positive news for the farmers. This could allow commercial focused farmers to secure more stable market access.” The study of 353 customers was conducted as part of ACIAR-funded sweet potato research sponsored by CQU and the PNG National Agriculture Research Institute (NARI), which aims to improve sweet potato value chains by increasing the quality of harvested roots. Sweet potato quality and production are improving, resulting in increasing supplies to retailers eager to provide better fresh produce. “The project, with support from the Fresh Produce Development Agency and NARI, is helping farmers to build their business skills and connect with emerging supermarket opportunities,” said Professor Brown. Kirt Hainzer, a CQU researcher who collaborated on the survey alongside NARI researchers, said it was the first study to look at customer behaviour and see what role stores may play in the development of PNG's commercial sweet potato sector. “The research sought to better understand and compare how consumers buy staples from open markets and supermarkets and to explore the preferences for purchasing staple foods as supermarkets increase the availability of convenience staples like rice,” said Hainzer. “Although expanding formal sales represents a huge step forward in developing a commercial sweet potato industry, continued research on consumer preferences and the market for fresh produce will help better understand trends in staple food purchasing and what market opportunities exist for growers.” With over a hundred kinds of sweet potato in the nation, NARI economist Raywin Ovah said the study sought to find out which of these customers preferred. “Not all the varieties are preferred from a consumer point of view. There are only a few that consumers want to be based on the taste or health properties and that is what we want to also find out. Farmers can be provided with that information, so they produce those varieties that the market wants.” One of five initiatives under the Transformative Agriculture and Enterprise Development Program is a project to increase commercial sweet potato production and commercialization in the PNG highlands. The ACIAR program, which is funded by Australia in collaboration with the government of Papua New Guinea, aims to improve the livelihoods of rural men and women through private sector-led development, increased agricultural productivity and quality, and the development of individual and institutional capacity. Reference: Loop (20 July 2021). “Study looks into sweet potato industry”.
PNG Business News - July 21, 2021
Garry: MRA Evaluating K50 Billion Worth of Investments
According to managing director Jerry Garry, the Mineral Resources Authority is evaluating more than K50 billion in investments in the country. Wafi-Golpu, Frieda River, and Woodlark are among them. “We are also looking at the Central Lime and Cement,” he said. “If that project comes on-stream, it will be one of the first industrial mines ever built in the country.” Garry was speaking at a Port Moresby consultation session on the Mine and Works (Safety and Health) Bill 2021. PNG, he added, was home to some of the world's largest mines. “We have grown from strength to strength,” he said. “If you compare the Bank of PNG statistics, the mining sector alone, in terms of production, has exported over K17 billion in 2020 and 2019. “So it’s a huge industry that we are trying to regulate and manage.” Garry expressed gratitude to the industry for making safety a primary priority. “They have been taking health and safety at the workplaces very seriously,” he said. “We must not only consider (the workers) and the environment but also people living around the (areas) we operate in. “And if we are using any hazards, we must also take responsibility.” The newest mining methods in Wafi-Golpu, known as block cave mining, are one of the new things to expect, according to Garry. “New mining hazards will come with this new mining method,” he said. Reference: The National (20 July 2021). “Authority assessing investments worth K50bil”.