Place your Ad Here!
PNG Power Undergoes ISO Certification
by PNG Business News - June 14, 2021
Photo Credit: Loop PNG
PNG Power Limited will be subjected to an evaluation by its asset management standard unit in order to receive ISO 55001 certification.
A third party will undertake the assessment and ISO 55001 certification process, which will take 12 to 18 months and include an evaluation of the company's present AM practices and processes, identification of gaps, and development of a roadmap for adoption.
This will be the first phase in PNG Power's ISO 55001 accreditation process, which will be supported by USAID's PNG Electrification Partnership (USAID-PEP).
The company's old and old infrastructure assets, according to PPL managing director Flagon Bekker, have continued to obstruct the delivery of dependable power to clients across the country.
PNG Power has taken the first step forward in commencing the Asset Management Strategy and Framework for Management of PNG Power Infrastructure Assets, he added, under its new asset management (AM) unit.
He explained that ISO 55001 accreditation is vital because it ensures that PNG Power has an asset management system (AMS) in place that caters for internal and external challenges influencing asset management in order to meet the company's goals.
Risk management, ageing/aged infrastructure, supply chain and spares maintenance, maintenance optimisation, AM performance monitoring, and project/investment lifecycle assessment and planning are the six workstreams that the AM unit will focus on.
PNG Power's asset management will be based on these workstreams.
On the leadership front, it will be ensured that senior management has accepted responsibility for developing and communicating the AM Policy and Strategic Asset Management Plans to all stakeholders involved.
The accreditation will also provide confidence that AM objectives have been defined, recorded, and disseminated within the organization, as well as that adequate planning has been put in place to meet the goals.
PNG Power is also sponsored by the World Bank under its Energy Utility Performance and Reliability Improvement Project (EUPRIP) to strengthen infrastructure through rehabilitation and upgrade works, therefore the support from PEP is expected to complement the asset management strategy.
PNG Power is also working with USAID PEP Activity to improve grid home connections, and the AM effort will guarantee that quality and dependable power reaches end customers.
Post-Courier (10 June 2021). “PPL To Conduct Assets Review”.
PNG Business News - April 19, 2021
Bekker Says Contract Reviews Are Important
According to PNG Power Ltd, renegotiation and reviews of current contracts with independent power producers (IPPs) make the business healthier and more competitive (PPL). PPL managing director Flagon Bekker made the statement in response to questions raised by IPP industry groups (IP3) about PPL unilaterally reviewing and renegotiating current contracts and contractually negotiated prices to supply electricity to the grid. IPPs, according to Bekker, must be adaptable enough to evolve as fiscal, technical, and environmental factors change with time. “We asked IPPs to respond to a survey late last year where we asked them for their suggestions and next steps in dealing with the current commercial status quo,” he said. “In fact, we offered four or five alternatives to renegotiation. None responded.” According to Bekker, analysis shows that in terms of pricing, spending, and the overall economy, it is best to keep IPPs' share of the total market minimal. “Egypt is the best example of countries that have kept IPPs to a smaller share of the total (market) and found it easier to weather macro-economic shock and have greater freedom in deciding where to source finance for power investment in the future,” he said. “The IPPs not only make the macroeconomy weaker, but they are also the cause of their own problems. “PPL is leading to change this. “IPPs should not resist. “They should partner by suggesting solutions for the future. “PPL will send the survey out again and we hope they respond this time.” According to Bekker, there was a lot of analysis and support focused on post-negotiation evaluations, which shows that the renegotiation process contributes to the discovery of lessons and eventually the execution of those lessons. “Off the top of my head, here is a list of countries that have renegotiated PPAs in full or in part over the years: Philippines, Brazil, India, Argentina, Mexico, Turkey, Poland, China (among others),” Bekker said.
PNG Business News - June 01, 2021
PNG Assets Have Potential To Earn, Says Bekker
PNG Power Managing Director Flagon Bekker said the company's assets have a lot of potential for generating income and maximizing their use to help the country distribute energy more efficiently. PNG Power has the capability and assets to provide that opportunity and needs to look at the best solutions to accomplish this sort of outcome, he said. Electricity markets have altered worldwide and in the region to produce better benefit for the economies of those nations, he said. “Reform is inevitable for the power sector in PNG as it has been and continues to be across the globe. PNG is not unique,” Bekker said. “Reform will consist of a measured, step by step approach by PPL and the other market participants. It will mean lower power prices for the people of PNG through transparent, competitive investment and operating processes in generation, transmission and distribution and retail business units. Reform is about change. Change for a better stronger and more sustainable sector.” He highlighted that, after the recent passage of enabling legislation, the National Energy Authority (NEA) will take over regulatory tasks from PNG Power and the ICCC. He stressed that PNG Power could not be both a regulator and a participant in the business at the same time, that it could not be both the referee and the player, as well as the third umpire. “It must now behave in a more commercial manner to implement the programs necessary to achieve the government’s electrification agenda. PNG Power would become a competitive participant in the market in the future, with a single buyer responsible for power demand throughout the country's electrical infrastructures. “I want all PNG Power staff to understand the vision that we have for the organisation and its important role in achieving the goals of the government; this requires that we must act in a commercial manner, especially in dealing with donors and investment parties. “We should not be afraid of change; we must all embrace it,” Mr Bekker said when responding to the media criticism by the Energy Workers Union about the changes and the reforms initiated at PNG Power.” Reference: Post-Courier (31 May 2021). “Bekker: PNG Power Is Able To Make Money.”
PNG Business News - June 28, 2021
PPL MD Resigns, OIC Appointed Amid Power and Union Woes
PNG Power Limited’s Managing Director has been replaced with an Officer in Charge as the power utility continues to face operational challenges. This included a prolonged 16 hours of power outage last week Friday in Port Moresby that saw many business houses resort to generators to keep doors open to customers and deliver services. Earlier that day, it is understood an impending strike by the PPL Union was addressed by the management, led by the now resigned MD. A townhall meeting on Friday at the Airways Hotel in Port Moresby saw the PPL team and the former MD Mr Flagon Bekker address various stakeholders and media about the challenges that they were facing and what they were doing to turn the power company around. It was during question time, that Mr Bekker left after being notified by a staff that he was needed back at the PPL head office at Hohola. In a statement released Sunday, Chairman of PNG Power Limited (PPL) Mr Moses Maladina announced the resignation of the Managing Director, Mr Flagon Bekker, effective immediately on Friday. “Mr Bekker’s decision to leave the organisation after nine months are based on personal reasons,” Mr Maladina said. The Chairman also announced the appointment of Mr Obed Batia as Officer in Charge of PNG Power, whilst a more formal engagement is finalised. Mr Batia has over 30 years of service with the company and has served the Leadership Team with distinction and possesses outstanding credentials. I have every faith in Mr. Batia’s ability to provide much needed stability. The statement assured that the Chairman and Board of PNG Power will provide the new Officer in Charge and the Leadership Team with its full support, during the interim. “We assure all the PNG Power employees and their families, key stakeholders and suppliers, and the valued PPL customers of continued stability during this transition period,” Maladina said. “It remains our key priority, to focus on the objectives of our Annual Operating Plan and to deliver on a promise to provide accessible, affordable and reliable energy services to the people of Papua New Guinea. “I would like to take this opportunity to thank Mr Bekker for his time here at PPL and to wish him well, as he returns to his family in Australia,” the chairman said. Among the issues that need the attention of the new OIC is the cancellation of the Power Purchase Agreement (PPA) signed with Oil Search Limited last year for the Biomass and Solar Farm project located in Markham district of Morobe province. Local landowners have expressed disappointment following the release of a statement by OSL of the negative implications of the recent cancellations of the PPA with OSL for the solar farm and biomass project that was to be an additional source of power supply into the PPL Ramu grid. The company’s challenges include a K25 million monthly loss to power theft and millions owed in outstanding fees, particularly from Government.
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”.