Kumul Petroleum Pays Interim Dividend of K100 million to state
by PNG Business News - August 30, 2021
Photo Credit: Papua New Guinea Today
Hon James Marape, the Prime Minister of Papua New Guinea, received an interim dividend payment of K100 million from Kumul Petroleum Holdings Limited (KPHL) in Parliament, which was delivered by the Board Chairman Prof Benedict Yaru and the Managing Director of KPHL, Wapu Sonk.
When the Prime Minister received the dividend check, he congratulated Kumul Petroleum's Board of Directors and Management for paying such a significant dividend in such a timely manner. The Prime Minister further stated that he expects the Company to pay an additional K200 million to satisfy the entire dividend of K300 million as stipulated in the National Budget for 2021.
He said, “My Government has come to recognise that active commercial participation and having a higher Equity interest by Kumul Petroleum as the National Oil Company (NOC) of Papua New Guinea is critical because it captures a significant portion of the lion’s share of the oil and gas proceeds for the country, which otherwise would normally go to the foreign commercial investors while the State waits to collect taxes and royalties which usually are further squeezed by concessions. Equity is King in any Project whether it be Mining or Petroleum or any other type of Projects, hence our push to have a higher stake in all new Projects, Porgera Gold Mine, Ok Tedi etc. “
The Prime Minister said, “Take back PNG is not a slogan without consequence; it is in fact a call to the people of this country to take control of the agenda for the economic betterment of this our country. Taking our nation back requires PNG to have control over its oil and gas sector from exploration through to production and development. This cannot be achieved under the current regime and without a fully empowered National Oil Company (NOC). That’s why my Government is committed to bringing about positive changes to the regime in the form of production sharing in line with international practice which the major oil and gas companies are already used to. This will be the game-changer we have been waiting for.”
To the company’s performance, the Prime Minister said, “Despite the setbacks caused by poor decisions by the past government with the UBS Loan which cost Kumul Petroleum and thus the country about AUD 362 Million (almost a billion Kina) in direct losses, the Prime Minister commended Kumul Petroleum for maintaining a high standard of corporate governance with “unqualified audit reports” for every year since the active operation in 2014. He said the company has every attribute to become like Petronas of Malaysia and make huge contributions to the country if it were left to operate independently like any other commercial entity and without undue interference by the government, which is also how Petronas operates”.
“I am pleased to know that after 696 LNG cargos by end of 2020, and from net proceeds of USD1.644 billion received in 2014 to end of 2020, approximately USD$1.119 billion has been passed onto the State; meaning KPHL has paid to the State the equivalent of 68% of the total distributions received from the PNG LNG Project”.
These remittances to the State are composed of USD$521,900,300 in direct dividends, USD$394,000,000 in return of capital payments (payments to State under Vendor Finance arrangement for Kroton Equity Option), USD$181,000,000 in various forms of taxes to IRC, and USD$23,000,000 on corporate social responsibility projects such as rural electrification projects in the country and the refurbishment and installation of new equipment
The Prime Minister further said “We also must not forget that Kumul Petroleum not only preserved the rights of the landowners and provincial governments to the Kroton Equity Option and provide the necessary vendor financing for those options, but Kumul Petroleum also had to accept a reduction of about US$600 Million in the offer price from US$1.0128 Billion, which was a significant dent to its balance sheet. So in fact, KPHL gifted US$600 Million to the landowners and provincial governments of the PNG LNG Project”.
The remaining revenues of KPHL have been re-invested in existing oil and gas fields it has cash call obligations to and other related facilities, a state-of-the-art live training facility for the Kumul Petroleum Academy, and retained for looming projects such as Papua LNG and Pasca Gas Project and related exploratory and studies.
Reference: PNG Facts (19 August 2021). “PNG Kumul Petroleum Holdings Limited Pays an Interim Dividend of K100 million to state”.
PNG Business News - July 29, 2021
Kumul Petroleum Supports PMGH Cancer Centre Structural Works
Photo Credit: Kumul Petroleum - Prime Minister of Papua New Guinea James Marape has the honour as Trustee of Kumul Petroleum to handover, in a symbolic gesture funds to the value of K10 million to the Port Moresby General Hospital to support the completion of structural works for the Cancer Centre. Structural works for the Cancer Centre at Port Moresby General Hospital will continue as planned following the boost of much needed funds by Kumul Petroleum Holdings Limited (Kumul Petroleum). The funding boost by Kumul Petroleum at the value of K10 million will assist with the smooth flow and completion of the Cancer Center structural works after construction had stalled early this year due to a lack of funds. The scoop of work for the completion of the construction includes the roof; upper floor; roof over the banker; including plant room and walls on both ground and first floors. ”Kumul Petroleum is proud to support the structural phase of the Cancer Centre construction works that will house key infrastructure (2 cancer bunkers) that will be important to the health and well-being of Papua New Guineans who seek cancer treatment, said Kumul Petroleum Managing Director Mr. Wapu Sonk. “Our organisation is passionate about supporting the efforts of the National Governments Strategic Vision to improve healthcare in the country and to see the hospital provide the highest quality of care for all Papua new Guineans, but for this to happen it is important that we have the infrastructure to do so. Hence, our support to this project”. Dr. Paki Molumi, Chief Executive Officer of Port Moresby General Hospital acknowledged Kumul Petroleum for its continuous support to the hospital and to specialist health care in Papua New Guinea, saying: “Port Moresby General Hospital is working to develop modern, world class facilities, that the designs for the cancer facility is in full compliance with international standards and construction has been professionally supervised to ensure continuing compliance.” “We are very grateful at Port Moresby General Hospital to receive this funding support from Kumul Petroleum on top of its other commitments. Such support from a national company is vital to the success of this facility and, will help to ensure that we stay on target to complete the facility and begin providing services to the people of Papua New Guinea as soon as possible”.
PNG Business News - September 06, 2021
Kumul Petroleum thanks Government for Pandora Licence
Photo Credit: Kumul Petroleum - Minister for Petroleum, Hon. Kerenga Kua MP, officially announced the award of a fourth Petroleum Retention Licence (PRL) the Pandora License to the Managing Director of Kumul Petroleum, Mr Wapu Sonk on Friday, 03 September 2021. Kumul Petroleum Holdings Limited (Kumul Petroleum) welcomes the government’s decision to award a fourth Petroleum Retention License (PRL) to the national oil and gas company (NOC). This decision comes less than five months after the awarding of three licences. The Minister for Petroleum, Hon. Kerenga Kua, in officially announcing the award, described the occasion as momentous for Kumul Petroleum as Papua New Guinea’s NOC. “In April of this year, I announced the Marape-Basil Government’s support of the decision of the Petroleum Advisory Board (PAB) to grant PRL 48, PRL 49 and PRL 50 covering the Kimu, Barikewa and Uramu gas fields to Kumul Petroleum. Today’s announcement brings the total amount of PRLs awarded to Kumul Petroleum to four”. Minister Kua said the award empowers Papua New Guinea’s own NOC to take a “significant step forward in its mandate” and thereby also fulfils the Marape-Basil Government’s greater vision of ‘Take Back PNG’. He said he as Minister for Petroleum is pleased that our own NOC has technically and financially prepared itself to take on some of the licenses as their terms expire, and also be able to support the Papua LNG, Pasca and other developments like P'nyang when they happen. He expressed confidence in the technical capabilities of the nationals employed by KPHL and urged the NOC to swiftly progress development plans to commercialise these fields and proceed to developing them as soon as possible”. Upon receiving the award of the Pandora License, the Managing Director of Kumul Petroleum, Mr Wapu Sonk thanked the PAB and the Minister for Petroleum for having confidence in the NOC’s capabilities and for recognising the NOC as an important partner in the Government’s ‘Take Back PNG’ vision. The Pandora license is the fourth PRL that Kumul Petroleum has secured this year, and presents for the NOC the opportunity to put to test aggregation and development concepts which the company has been developing. He said Kumul Petroleum will now be able consolidate these asset and move toward commercialising fields which were previously held by different owners and were otherwise considered stranded, isolated and economically challenging. Kumul Petroleum’s commercialisation plans will include further to drilling of delineation and development wells and project capital investments. Hence to mitigate Kumul Petroleum’s associated risk exposures, the company will look to invite joint venture partners and technical service providers with the requisite technical and financial capabilities who will assume critical roles in the development of these gas fields. Mr Sonk stated that “Kumul Petroleum will commit itself to work with the Department of Petroleum in carrying out the licence conditions. We will also look at the best way possible to commercialise this licence so that it benefits our people who have entrusted us to hold this licence”. Article Courtesy of Kumul Petroleum
PNG Business News - May 12, 2021
Kumul Petroleum Secures Additional 7% in Deal with Total
Kumul Petroleum Holdings Limited (KPHL) has secured a contract for an additional 7 per cent free carried equity in a historic deal with TOTAL SE. Papua New Guinea's national oil and gas corporation, reported an increase in its aggregate equity in potential joint exploration ventures with Total SE following talks in Paris last week to remobilize the Papua LNG Project. Wapu Sonk, KPHL's Managing Director, was delighted to confirm a promising agreement with TOTAL SE for an extra free carried 7% equity in any potential joint exploration ventures, on top of KPHL's 22.5 per cent back-in rights. This ultimately raises the company's total equity to almost 30%. Prospects such as the Deep and Ultra Deep Offshore Exploration Blocks in the newly awarded PPL 576 and PPL 589 Licenses, as well as future joint exploration ventures, will be affected by this agreement. Kumul Petroleum will be able to engage as a JV partner and gain access to vital technical details without having to vote on financial matters, thanks to the 7% free carried equity. The increase was discussed and agreed upon during the latest Papua LNG Remobilization discussions in Paris on May 3, 2021, between the PNG Government Delegation led by Deputy Prime Minister Sam Basil and the TOTAL SE Delegation led by Patrick Pouyanne, Executive Chairman and CEO. Pouyanne praised the efforts of the Marape-led government to increase local involvement in their region. TOTAL SE and the PNG Authorities decided to collaborate to build substantial in-country value and execute the Papua LNG Project in an outstanding manner as part of Total's strategic endeavour to continue cementing relationships with national stakeholders. TOTAL and its joint venture (JV) partners describe the project as a much-needed and timely US$13 billion (PGK 48 billion) capital expenditure (CAPEX) project that will turbo-charge and fuel the PNG economy during this covid-19 pandemic-induced economic recession and add much more in the future. Kumul Petroleum is looking forward to the secondment of its technical personnel to the pre-FEED, FEED, and Detailed Engineering Design phases of the plant, according to Sonk, as part of the increased collaboration between the two organizations. Kumul Petroleum also expects to resume joint marketing activities for LNG entitlements from the Papua LNG Project, and intends to complete effective Sales and Purchasing Agreements (SPAs) in the LNG Industry, he said. By the end of the third quarter of 2022, the parties hope to have completed these SPAs. Another significant benefit of this collaboration with TOTAL, according to Kumul Petroleum, is that the company will be able to exploit their respective strengths for their joint-equity funding option. “We recognise the financial stress and challenges induced by the COVID-19 pandemic and other intervening circumstances in the major markets and will endeavour to leverage our combined synergies to attract major global financial institutions to finance our equity shares. “On this occasion, Kumul Petroleum acknowledges the visionary leadership and foresight of both Delegations, led by the Deputy Prime Minister of Papua New Guinea and Executive Chairman & CEO of Total SE respectively, in pushing the boundaries beyond the current Oil & Gas Act provisions, and securing the PNG government's wishes for greater national participation in resource development projects,” Sonk said. TOTAL's determination and revised contribution to speeding up the Papua LNG remobilization works is also acknowledged by Kumul Petroleum, with the aim of committing the remainder of 2021 to Pre-Front End Engineering Design (Pre-FEED) work and launching FEED in early 2022 in preparation for a Final Investment Decision (FID) in 2023.
PNG Business News - September 16, 2021
Engaging the global crowd to design the electric mine of the future
Today, the Electric Mine Consortium (EMC) launched the ‘Electric Mine Simulation’ crowd challenge in partnership with the OZ Minerals Think & Act Differently ideas incubator and Unearthed. OZ Minerals, IGO, South 32, Blackstone Minerals, Evolution Mining, Barminco and Goldfields have committed to significantly reducing their carbon footprint. These seven mining companies along with a number of partner companies, have come together to form the Electric Mine Consortium, a collaborative group seeking to accelerate progress towards a fully electrified zero carbon and zero particulates mine. Electrification of mine sites is a critical step change needed for the mining industry to achieve a zero carbon future. Switching to electric and renewable energy represents a transformational shift that will change the way mines are designed. This challenge is about using simulation to understand the impacts of electrification on mine design and through this challenge the EMC is looking to find innovators that can help do this. The eight-week online challenge invites companies and individuals from around the world to propose an approach to designing an open architecture, mine design simulation platform that can initially be used to compare a fully electric underground mine with its traditional diesel powered equivalent. Brett Triffett, Transformation Technologist, from OZ Minerals explained, “there is a great opportunity to use whole-of-mine simulations that integrate all of the dependent systems so we can understand the holistic value in transitioning from diesel to electric solutions in underground mines. We would like to be able to quickly build and test different mine designs and compare things like productivity, costs, emissions and energy requirements. We think that eventually this capability could be expanded to include the entire mining value chain. We have invited the crowd to propose solutions because we are not currently aware of a platform that meets this brief. What we have learned from running previous crowd challenges is that there are often people from outside our industry who have ideas or technology that can be applied to mining. These people are often unknown to us and in many cases they are unfamiliar with our industry. By participating in a crowd challenge, innovators can access a new market and be supported in developing new products and business models.”. A selected cohort from from this challenge will join the Think & Act Differently incubator and be supported in developing a demonstration of their solution. The incubator program is a supportive environment that includes; funding, mentoring, opportunities for collaboration, capability uplift and exposure to mining data and mining operations from across the EMC members.
PNG Business News - September 15, 2021
Weir Minerals strengthens its partnership with international technology group, Andritz
Weir Minerals and Andritz have signed an agreement at MINExpo 2021 expanding their shared commitment and strategic cooperation to supply equipment for processing tailings in the mining industry. The foundations of this agreement have been built on a shared understanding and vision to enable the sustainable and efficient delivery of the natural resources essential to create a better future for the world. Since 2018, Weir Minerals’ and Andritz’s partnership has seen them collaborate on joint tailings projects. This shared history as partners – a collaboration made stronger by the quality of individuals on both teams – has reinforced their abiding belief that together, both Weir Minerals and Andritz are stronger. This shared success has led both Weir Minerals and Andritz to renew their on-going commitment and announce they’ll be expanding their offer to all regions around the globe. Utilising Andritz’s proven separation and dewatering technologies, Weir Minerals has strengthened its whole-of-mine capabilities, showcasing market-leading products from extraction to comminution, mill circuit and tailings management. ‘Weir Minerals has been providing tailings solutions for decades; we have dedicated research facilities – the Weir Technical Centre in Melbourne, Australia and the Sustainable Mining Centre in Venlo, Netherlands – that are challenging conventional ways of thinking about tailings, while also developing practical, innovative and sustainable solutions that will reduce operating costs and improve safety,’ Ricardo Garib, Weir Minerals Division President said. ‘Decreasing ore grades mean that mines are producing more tailings than ever before. One of the challenges with tailings management is that there cannot be a one-size-fits-all approach; each mine requires a tailored solution that carefully considers the minerals being processed, as well as the site’s climatic and geological conditions. Weir Minerals prides itself on having both the expertise and equipment that allows us to partner with miners everywhere to plan and implement tailings solutions based on their operations’ unique challenges and this agreement with Andritz enhances those capabilities,’ he said. ‘Andritz has a long history working across a range of different industries. We are very proud of the work we’ve done with Weir Minerals; together, we’re excited about continuing to provide a joint offering of sustainable and value-added tailings solutions. Both companies bring a different expertise and know-how to the partnership; we complement one another and ultimately it’s our customers who’ll benefit,’ Steve Huff, President Andritz Separation said. Tailings management forms an important element of Weir Minerals’ broader integrated solutions approach, which considers problems and challenges from all perspective and draws on a range of experts – process engineers, design engineers, product experts and materials scientists, among others – to identify potential challenges and opportunities and provide tailored solutions. ‘This latest agreement enhances our overall tailings offering and enables us to provide our customers with a complete tailings solution. Under the brand name IsoDry, we will continue to offer customers a range of mechanical separation technologies, such as thickeners, filter presses, centrifuges, and vacuum belt filters,’ Charlie Stone, Weir Minerals VP Sales and Business Development-Mill Circuit said. Weir Minerals has strengthened its tailings team to support the market and ensure that it can provide innovative solutions based on each customer’s specific requirements. The agreement provides the opportunity for potential future collaboration on technology, harnessing Andritz’s market-leading separation technology in conjunction with Weir Minerals’ minerals and tailings processing technology. Many of these products – Warman® pumps to transport fluid tailings, GEHO® pumps to handle paste, Cavex® hydrocyclones to dewater tailings and the Multiflo® range of dewatering solutions – have been integral to helping miners manage their waste for generations. Weir Minerals and Andritz have also reiterated their shared commitment to sustainability; it is an essential part of both their business and corporate strategies. Both companies have outlined ambitious plans to reduce their carbon emissions, while their approach to ESG initiatives extends to all aspects of their organisations. ‘Shareholders and stakeholders are rightfully demanding more sustainable mining practices and tailings management is an area where there’s a lot of scope for improvement. Weir Minerals wants to play a central role in changing how the industry thinks about and manages tailings. Ultimately, we believe that sustainable solutions are not only environmentally beneficial, but also reduce operating costs and minimise risk,’ David Almond, Weir Minerals Global Director, Product Management Process said. ‘Weir strives to make our customers more sustainable and efficient; it’s core to our purpose and at the heart of what we do. We believe that embedding sustainability throughout our organisation protects and creates long-term value for our stakeholders and secures the long-term future of Weir. Our approach to tailings management is an extension of our broader corporate strategy. There is scope to make long-lasting, impactful change in how the mining sector thinks about and manages tailings and Weir is proud to be one of the industry leaders,’ Jon Stanton, Weir Group Chief Executive said.
PNG Business News - September 15, 2021
STAKEHOLDERS VIEWS CRITICAL FOR BETTER RESOURCE GOVERNANCE: ALKAN
Head of the PNGEITI Mr Lucas Alkan last week in Wabag at the opening of the consultation. The Head of the PNG Extractive Industries Transparency Initiative (EITI) Mr. Lucas Alkan has issued a strong challenge to stakeholders in the extractive industries to embrace and promote the work of EITI in Papua New Guinea to derive best value from the industry. Mr. Alkan spoke of this last week in Wabag when he opened the upper highlands regional consultation on a proposed law to transition the PNGEITI into a statutory authority. “PNG EITI is a government driven initiative to promote transparency and accountability in the PNG mining and petroleum space which has been driving the PNG economy for a sustained period of time. “But there is this misconception about proceeds from mining and petroleum activities not being translated well into development on the ground and this sentiment is shared by many at both the provincial and national level. “What PNGEITI is doing is to shed light on the leakages on revenues and proceeds from the mining and petroleum activities with the ultimate aim of improving governance in the mining and petroleum sectors using international best practice standards to see the desired development outcome from this important sector. “Seven years into PNGEITI implementation in PNG, we’ve now seen the need to make the PNGEITI administrative body, the PNGEITI into a statutory body to see more improvement in the EITI reports to enhance good governance in the sector to derive the best development outcome. “We’ve covered two regions; the New Guinea Islands and Momase regions and we are now conducting consultations in Enga and Eastern Highalnds to cover the big highlands region. “I encourage the best knowledge and views from all stakeholders from the stakeholders in these consultations so that we give birth to a law that truly reflects the genuine views of all stakeholders for better development outcomes. A State Technical working group comprising the Department of Petroleum, State Solicitor, Internal Revenue Commission, Department of Personnel Management, Department of Treasury, the National Economic Fiscal Commission and Department of Finance were in the Enga capital, Wabag for a four days consultation for the Upper Highlands region” “PNGEITI has been in operations since 2014 effected by a NEC decision and now we are moving into the next step in anchoring this extractive industry reporting process into PNG’s legal and administrative system. PNGEITI published 7 reports detailing activities taking placing inn the PNG mining and petroleum space,” Mr. Alkan said. Article Courtesy of PNG Extractive Industries Transparency Initiative