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Oil Search Managing Director Resigns
by PNG Business News - July 21, 2021
Photo Credit: Geelong Advertiser
After 17 months in charge, Oil Search managing director Keiran Wulff resigned owing to concerns about his behaviour and bad health.
Dr Wulff has been dealing with a long-term medical problem that has lately worsened.
According to Oil Search chairman Rick Lee, the board met with Dr Wulff after receiving recent concerns and accusations about him.
According to Lee, the board believed Dr Wulff had acted in a way that was inconsistent with the board's expectations in terms of his managerial style.
Dr Wulff has taken on a large number of duties since his appointment as managing director in February, according to Lee, and the board recognizes the difficulty he has faced as a result of his recent health concerns.
“This period has been marked by extreme challenges including global lockdowns associated with the Covid-19 pandemic, a plunge in oil prices, crisis measures to protect the company’s financial position and developing a clear strategy to steer a path to a sustainable future through the energy transition.
“It is a tribute to all staff that Oil Search is now in a solid position with record levels of production in PNG, a strengthened balance sheet and our Alaskan development plans meeting milestone targets.”
Dr Wulff praised all Oil Search employees for their efforts, especially since the epidemic began and the firm began putting plans in place to protect its facilities in PNG and Alaska.
“It has been a great privilege to work at Oil Search and I believe the company is very well-positioned for the future.
“It has, however, become apparent to me that due to my health challenges, it is becoming increasingly difficult for me to perform at the level required of the position,” he said.
Peter Fredricson, who joined the firm as chief financial officer earlier this year, has agreed to take over as interim CEO with immediate effect.
Interviews with internal and external applicants will commence soon in the hunt for a permanent managing director/CEO.
Lee said the board was looking forward to working with Fredricson to keep PNG production projects on track and on budget, as well as development efforts in both PNG and Alaska.
The National (20 July 2021). “Wulff resigns from Oil Search”.
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 - May 31, 2021
Oil Search Seeking Beneficial Outcome with PPL for 40MW PNG Biomass and Solar Farm
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 - 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”.