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Trafigura Receives Approval From ICCC
by PNG Business News - May 26, 2021
Photo credit: Trafigura Group Pte. Ltd. (2020)
Trafigura Group Ltd has received approval from the Independent Consumer and Competition Commission (ICCC) for its planned acquisition of an additional interest in Puma Energy Group Ltd.
Puma is now controlled by Trafigura, which owns the majority of the company, and will have a majority stake in Puma after the takeover.
While Trafigura and Puma were both private entities registered in Singapore, the parties applied to the ICCC for approval, according to ICCC commissioner and chief executive officer Paulus Ain.
This was due to Puma's three wholly-owned subsidiaries in Papua New Guinea, Puma Energy Bunkering PNG Ltd, Puma Energy PNG Ltd, and Puma Energy PNG Refining Ltd. Oil refining or refinery at Napa Napa, wholesale and retail distribution of refined petroleum goods, liquefied petroleum gas, and bitumen production are also part of the activities in PNG.
Trafigura also provides significant inputs to Puma's refining and wholesale businesses, both abroad and in PNG, under a long-term supply agreement.
“The proposed acquisition will only result in the change of ownership and controlling interest within Puma,” Ain said. “Hence, this would not have any serious competition effects on the overall structure of the markets in PNG, if any. Based on available information the ICCC wishes to inform all concerned parties that the ICCC is satisfied that the proposed acquisition of further interests in Puma by Trafigura will not have, and will not be likely to have, the effect of substantially lessening competition in any market(s) in PNG. The ICCC, therefore, has granted clearance to Trafigura to proceed with its proposal to acquire a further interest in Puma.”
The National. 24 May 2021. “Trafigura Group given clearance”.
PNG Business News - March 11, 2021
Puma Energy Concerned About Shortage of Forex
Puma Energy PNG Ltd is concerned about a shortage of foreign currency (forex) to import crude oil in a timely manner, according to country manager and director Hulala Tokome. The business paid for its crude supplies when forex was available on the market, he said. Tokome added that the availability of forex had influenced the crude oil purchase schedule, also commenting on oil prices, citing Platts as a source. According to Tokome, oil prices for February have been steadily rising. Platts is a source of benchmark price assessments in the physical energy markets and a provider of energy and metal knowledge. “Hence, we will have an increase in prices for March as the Independent Consumer and Competition Commission (ICCC) pricing structure is based on Mean of Platts (MOP) Singapore prices for the prior month,” Tokome said. “There is a one month lag on pricing effect. “All eyes will be on the Opec (Organisation of petroleum exporting countries) meeting. Their decision to increase crude oil production or not will determine which direction prices will go. There is strong market optimism around global demand returning on the back of vaccine rollouts.” Many countries have begun to announce plans to phase out lockdowns, he said, and the warmer weather could help support demand. “With this, prices should continue to trend upwards,” Tokome said. Brent rates are currently at US$64/bbl (K220.95/barrel of oil), according to Tokome.
PNG Business News - April 29, 2021
Trafigura Files Application to Acquire Puma Energy
According to the Independent Consumer and Competition Commission, Trafigura Group has filed an application for approval for a potential purchase of an additional interest in Puma Energy Group (ICCC). On a public note, Trafigura's commissioner and chief executive officer Paulus Ain stated that Trafigura was already the largest shareholder in Puma and that after the takeover, Trafigura will have a controlling interest in Puma. Puma Energy has three wholly-owned subsidiaries operating in the country: Puma Energy Bunkering PNG Ltd, Puma Energy PNG Ltd, and Puma Energy PNG Refining Ltd. Oil refining or refinery at Napa Napa, wholesale and retail sales of refined petroleum products, LPG and bitumen supply are among the company's activities in the region. The ICCC, according to Ain, is requesting input and submissions from interested stakeholders and individuals who may have an interest in the proposed transaction. “Please provide your comments on whether or not this acquisition will have any serious harm to competition in any markets in PNG,” he said. Puma Energy Holdings Pte Ltd, Trafigura Pte Ltd, and Sonangol EP announced last Friday that they had signed a series of agreements. Trafigura decided to buy Puma Energy's whole shareholding from Sonangol for US$600 million, according to a statement from Puma Energy (K2.065 billion). Puma Energy and Sonangol have decided to sell their Angolan company and properties, according to the statement. The Pumangol retail network of service stations, airport terminals, and maritime terminals, including the state-of-the-art Terminal de Combustibles da Pumangol em Luanda (TCPL) terminal in Luanda Bay, Angola, was acquired as part of this. Puma Energy will be able to minimize the size of the rights issue to collect US$500 million (K1.72 billion) from rights already subscribed for by Trafigura and a limited number of minority owners as a result of these deals, according to the company. The rights were being applied into a convertible instrument in which subscribers paid Puma Energy on Wednesday, and the shares would be distributed to subscribers after regulatory approvals were received. Rene Medori, chairman of Puma Energy, said that improving and recapitalizing the company's balance sheet was a crucial strategic goal that would help stabilize the company's finances and support investment in its aggressive growth plans. Trafigura's executive chairman and chief executive officer, Jeremy Weir, said the company was delighted to help Puma's recapitalization and the selling of its Angolan holdings to Sonangol, a long-time ally. “This is a further demonstration of our commitment to and confidence in Puma Energy and its future prospects.” Meanwhile, Hulala Tokome, country manager and director of Puma Energy PNG Ltd, said that the takeover would have no effect on the company's PNG operations or customers.
PNG Business News - May 07, 2021
Puma: Aviation Industry Hit The Hardest
Puma Energy, a fuel and energy provider, has pointed out that the aviation industry has been struck the hardest. Puma Energy country manager Hulala Tokome mentioned that Puma supplies 100% of the country's jet fuel needs, demand remains poor, which is in line with a global downturn in travel that has also affected this country. He said that while most of Puma's business in PNG has remained robust, the company's employees have played a key role in this by operating in bubbles and being segregated at the refining camp, shift working at our terminal and aviation facilities, and 60% of the head office workers working from home. “Demand for aviation fuel remains at about half the level before COVID struck and recovery will be closely tied with the nation’s recovery from the pandemic,” said Tokome. “This is not only true of aviation but many other industrial sectors where we are seeing companies going out of business or in distress, thousands of people out of work and suffering as a result.” He said that the country's future is in jeopardy and that everyone in PNG has a part to play in its recovery. “We know that the pandemic can be controlled from observing other countries, but it will depend on all of us working together,” said Tokome. “The government sets the recovery plan and enabling policies and regulations to stimulate the economy, the private sector needs to adapt to the changing environment, and all of us need to observe the Niupela Pasin measures and change our behaviour to avoid infection and reduce transmission as fast as possible. “That means changing lifelong habits, wear masks, step up for hygiene, avoid crowds, isolate yourself when sick, minimise travel, and work virtually where possible. “It is clear that vaccination will play a major part in recovery and research has already been shown it can reduce the rate of infection, severity and spread of the disease.” He explained that this is a personal choice, but he urges all Puma employees to get vaccinated as soon as possible, on top of all the work they've already done in implementing stringent modern COVID work initiatives and transitioning to new ways of working to keep their families secure and healthy.
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”.