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Twinza Awaiting Response from Petroleum Minister
by PNG Business News - June 04, 2021
Photo Credit: Petroleum Exploration Society of Australia
Twinza notes the comments regarding the Pasca A Gas Agreement made by the Petroleum Minister, the Hon. Kerenga Kua, in a media release of 25th May 2021.
Twinza is currently awaiting a response from the Petroleum Minister as to whether the terms offered to the State, and outlined most recently in the Twinza media release of 19th April 2021 are acceptable or, if not, on which terms the Minister is prepared to support the signing of the Gas Agreement. An execution version of the agreement, incorporating these terms and using the State’s own template, is with the Minister for his consideration.
Twinza will provide a media update once we have received correspondence from the Petroleum Minister which either confirms that the agreement is accepted for execution, or provides clarity on the terms by which the State would sign the Gas Agreement.
Twinza Chairman and CEO, Ian Munro, commented that,
"The Company remains committed to delivering Pasca A, PNG's first offshore oil and gas project. However, it appears the 12-month long process may be stalled yet again because the State has not communicated to Twinza the agreement terms which would be acceptable. It is time to bring this matter to a conclusion such that the Project can move forward and Twinza is on standby to execute the agreement on the Petroleum Minister’s desk”.
The completion of the Pasca A Gas Agreement this month would allow the Project to move into the Front-End Engineering and Design phase, with a final investment decision in late 2022 and first production in 2025.
A continued delay in concluding the Gas Agreement will impact the planned Project schedule, defer investment and see production move out to 2026.
PNG Business News - April 23, 2021
Kua: State Ready to Continue Talks
According to Petroleum Minister Kerenga Kua, the window for talks on the Twinza's Pasca A gas project is still open. Mr Kua was referring to Twinza Oil Limited, saying that the current terms of the arrangement are not suitable for any investor and that the firm has asked its Pasca A project team to stand down. Although he acknowledges Twinza's reservations about the Pasca A agreement being signed, he believes it is the government's prerogative to negotiate better terms. In a letter to Twinza in February, the Minister said that “the Prime Minister’s policy directives come amid an impasse between the State Negotiating Team (SNT) and Twniza Oil Limited (TOL) in reaching a closure on the Gas Agreement”. “He has further instructed me to direct the SNT to re-negotiate certain fiscal terms with TOL to achieve his policy directives and conclude a Gas Agreement signing on or before the 21st February 2021.” According to the corporation, the state has requested a 6% Production Levy in order to sign the deal, which is 4% higher than the Production Levy that was agreed to as part of the substantive terms ('Agreed Terms') for Pasca A, signed by the State Negotiating Team and confirmed by Prime Minister James Marape on September 24, 2020. The additional levy demanded, according to Twinza, would make the Pasca A Project unfinanceable for any investor. Mr Kua, in response, said: “Until the signing takes place, the window for negotiation is still open. As Minister for Petroleum, it is imperative for me to seek the best outcome for PNG. “I understand that Twinza negotiations have taken several months to reach this point and the company has invested heavily in time and resources. But given the uniqueness of the project related to other existing oil and gas projects in the country it would be negligent for the State not to demand more benefits from this deal.”
PNG Business News - April 29, 2021
Economist Says Government Giving Misleading Message to Foreign Investors
Negotiations between Twinza Oil Ltd and the Papua New Guinea government are likely to proceed, according to an economist, but refusing to change conditions at the last minute sends a disappointing message to international investors. Marcel Schroder, an economist with the Asian Development Bank's macroeconomic analysis division, was referring to the government's announcement, conveyed to the company on April 16, that a 6% output levy is now needed to sign the agreement for the Pasca A gas project offshore of Gulf. “This is four per cent higher than the production levy that was agreed as part of the comprehensive terms for Pasca A, negotiated by the State negotiating team and announced by Prime Minister James Marape last Sept 24,” he said. In general, according to Schroder, an investor will back out if the anticipated advantages of its outside alternatives outweighed the benefits of the project under discussion. “Outside options for the investor could be projects in other countries,” he said. “Outside options for the Government are leaving the resources in the ground. A new investor may come forward if they view it as financially beneficial.” Future investors will be worried, according to Schroder, that the government may want to renegotiate the deal after development has begun. “They might also be concerned about this happening in other future agreements,” he said. “Since any investor requires to be compensated for higher incurred risks, this can weaken the government’s bargaining position, and, thus, negatively affect its take in future projects. Economically, it was sensible of the negotiation team to ask for early revenues from the project. These can be used for financing development projects and they will aid macroeconomic stability.”
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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”.