Exec: Twinza not signing deal

by PNG Business News - September 06, 2021

Photo Credit: Twinza Oil

According to country manager Roppe Uyassi, Twinza Oil Ltd would not sign the non-disclosure agreement in the manner supplied by the government.

He was reacting to Prime Minister James Marape's recent comment that he was dissatisfied and had "ran out of patience" with the way the business was handling the finalization of the Pasca A gas accord.

Twinza is the owner and operator of the Pasca A gas project, 95 kilometres off the coast of the Gulf.

“I am running short of patience,” Marape said last week.

“Sometimes they (Twinza) have a funny habit of going to the media first before sitting down with the State Negotiating Team (SNT).

“I can go to the petroleum advisory board next week if they (Twinza) keep us running around like this.

“I want Twinza to get it correct: if they’re serious about this project, the SNT is ready at any time.

“One of the Twinza guys should jump on a plane, get into Port Moresby, and talk to us face-to-face if they feel that their local executives don’t have the mandate to make final calls.”

During a recent Parliament session, Petroleum Minister Kerenga Kua stated that the SNT and Twinza will sign a non-disclosure agreement that would remain confidential until the gas agreement was inked.

Uyassi, on the other hand, said they were waiting for SNT to start writing the gas deal.

“We have informed the minister and the SNT that we are not able to sign the non-disclosure agreement in the form sent by the State Solicitor.

“If both parties engage in good faith with mutual cooperation, the drafting should be a matter of days.

“So a non-disclosure agreement is a distraction.”

 

Reference: Mauludu, Shirley. The National (30 August 2021). “Twinza not signing deal: Exec”.



Related Articles

Oil and Gas

PNG Business News - May 07, 2021

Pasca A Project now Expected to Start in 2025

The Pasca A offshore oil and gas project in Gulf faces further delay to its start-up which is now expected in 2025, says developer Twinza Oil Ltd. The project will continue to be postponed until a deal is signed, according to Roppe Uyassi, who added that the project's delay would likely be compounded by the project team's departure.  “This is really unfortunate for PNG, following the lengthy delays we have already seen from resource projects in PNG such as Papua LNG and Wafi-Golpu,” Uyassi said. Only prior to signing the deal last month, the government made it clear that it wanted a 6% export tax before it could sign it. According to the developer, it was 4% more than what had been settled upon previously. While the window for negotiations was still open, Petroleum Minister Kerenga Kua said it was critical to secure the best offer for the region. Oil and gas discovery and production, according to Uyassi, is a "highly dangerous but potentially lucrative market." “There needs to be a balance that recognises the risk taken by private investors and the development goals and aspirations of PNG, and the best deal would be one that maximises revenues to PNG,” he said. “This could be in the form of payments to local businesses and employees, or taxes and royalties to the Government to fund the country’s development priorities in health, education, security, infrastructure etc. “Importantly, it must also provide an incentive for private investors from all over the world to provide their money to develop the Pasca A Project on the promise of profits that will reward them for taking the risk to invest in Papua New Guinea. “We firmly believe that the deal agreed to between the State and Twinza strikes the right balance and provides a win-win outcome for both parties, delivering the highest State take of any resource development in PNG, be it on a discounted or nominal project value going to the State. “We understand that the outcomes of over 65 per cent discounted and 52 per cent nominal State take were even verified and benchmarked independently by Deloitte after being consulted by the State. “The agreed terms also included domestic market obligation (DMO) for the supply of gas being provided from the first year of production for the first time in PNG’s history, plus an increased percentage of domestic market gas supply to 10 per cent of production.” According to Uyassi, the Pasca Project would need at least K5 billion in additional funding in the coming years. “Even the State nominee carrying the State’s 22.5 per cent equity on the project going forward would require project financing to move this project forward into production, meaning that whatever terms we agree with the State must also be viable for the State nominee to raise financing. “The worst-case scenario would see Twinza sign an unviable gas agreement deal, only for the project to fail as it can’t attract investment from financiers who are more conservative than oil and gas project proponents such as Twinza.” Twinza had already started standing down the Pasca Project team due to the continuing delays in signing the deal, according to Uyassi, as the timetable of the gas agreement's implementation remained unclear. “This will continue, however, I will point out that as a foreign investor, Twinza has invested more than K350 million in the Pasca field over the past 11 years and will remain committed to PNG long-term,” he said. “The Pasca Project is ready to move into the Feed phase of project development soon after a successful gas agreement signing.” According to Uyassi, the project has been on hold since 2020, pending the start of the Feed process. “We remain hopeful that the development of PNG’s first offshore oil and gas field will commence soon,” he said. “We are committed to Papua New Guinea and remain hopeful this is something PNG will have to address for the long-term good of the industry and the many local businesses that depend on the industry.”

Oil and Gas

PNG Business News - June 01, 2021

Pasca A First Shipment Expected in 2025

According to Petroleum Minister Kerenga Kua, the first cargo of the liquefied petroleum gas (LPG) from the US$1.6 billion (K5.5 billion) Pasca A project in the Gulf is expected to start in 2025. It will be the country's first offshore extractive resource project with infrastructure, located 95 kilometres offshore in seas 93 meters deep in the Gulf of Papua. Pasca A, according to Kua, is a modest gas condensate project in terms of reserves. The offshore production facilities, on the other hand, have the ability to combine tiny pockets of stranded gas deposits in the Gulf of Papua. “The project will evolve in a two-phased development plan. “In Phase One, rich liquids will be stripped and produced, namely liquid petroleum gas (LPG) and condensate while gas is re-injected. “In Phase Two, gas will be produced.” Phase One is estimated to take two years to complete and generate between 32 and 38 million barrels of LPG and condensates. In the third year of the project's manufacturing life, Phase Two will commence. During the project's ten-year lifespan, an estimated 330 to 400 billion cubic feet of gas (BCF) would be generated. Twinza Oil (PNG) Ltd, the operator, is concentrating on commercializing its "found but underdeveloped assets." Twinza Oil Ltd has a business relationship with Baker Hughes General Electric (BIIGE), which offers vendor finance for the company's drilling projects. Kua said in a statement that negotiations on the project began during the application stage for a petroleum development license in 2018. In 2020, the Cabinet established the State Negotiating Team (SNT) for the Pasca A project to negotiate a fair agreement for the state. “Last September, the Pasca A SNT and Twinza Oil Ltd initiated the term sheet for a Gas Agreement,” Kua said. “However, there were some misunderstandings on the financial analysis method used and the domicile status of the company. “These have been resolved through the SNT negotiations and offline discussions with Twinza. “In negotiating resource projects deals for the country, the State has taken an approach to tax from production rather than profits. “The Pasca A SNT has so far negotiated the production levy from the base case of 2 per cent (equal to Papua LNG Gas Agreement) from the Loloata initialled term sheet of last September, up to 4 per cent in April. “At a 5 per cent production levy that State would have reached 55 per cent state take on nominal cash flow analysis, which is what we want to achieve.”

Oil and Gas

PNG Business News - April 22, 2021

Government Increases Its Demand for Pasca A Deal

According to project operator Twinza Oil Ltd, the government has raised its demand for the Pasca A Gas agreement once again, ahead of the scheduled signing. According to a statement from Twinza, the government told the firm last Friday that signing the agreement now demanded a 6% production levy. It read: “This is 4 per cent higher than the production levy that was agreed as part of the comprehensive terms (agreed terms) for Pasca A, negotiated by the state negotiating team and announced by the Prime Minister James Marape last Sept 24. “The additional levy requested would make the Pasca A project un-financeable for any investor. “The agreed terms would have delivered the highest State take from any resource development in PNG and were widely regarded as meeting all of the demands of the State, including early revenues, full royalty and development levy entitlement and a domestic market obligation of 5 to 10 per cent while satisfying the requirements of project financiers.” it said that the State had also attempted to amend the negotiated terms through a letter from Petroleum Minister Kerenga Kua on February 4. “The Government’s demand to raise the fiscal take to (between) 55 and 60 per cent nominal share, which is 75 to 85 per cent of the actual project value, would make Pasca A unviable for investors and financiers alike,” it said. “Notwithstanding the changing State positions, Twinza remains committed to PNG and progressing the Pasca A Project on the agreed terms.” Twinza gave an extra concession to the negotiated terms, raising the production levy to 4%, with a further rise to 6% at higher oil prices, in an attempt to close the deal. “This will provide 65 to 70 per cent of project value to the State or 52 to 54 per cent of nominal take,” it said. “The State take has been independently verified by Deloitte in a comprehensive report commissioned by the Department of Petroleum and delivered to the minister this month.” Twinza has kept its project team for Feed (front-end engineering and design) – readiness in the hope that the gas deal will be concluded by the end of 2020 after the negotiated terms were confirmed by Marape in September. The Pasca A gas agreement reached this month would have required the project to enter the Feed process right away, with a final investment decision expected in 2022 and first production in 2025. “Given the continued delays, Twinza will now stand down the Pasca Project team until there is clarity on terms and execution of the gas agreement.” Chairman and chief executive Ian Munro said: “Twinza was awarded the Pasca license nearly 10 years ago as a foreign direct investor. Since then, the firm has invested over K350 million in cultivating a field that was discovered more than 50 years ago but overlooked by other industry players. “It is disappointing that at the closing stages of a drawn-out 10-month gas agreement process, the State is now seeking to again revise terms to ones that are demonstrably unacceptable to any investor. “Consequently, while Twinza remains committed to progressing the Pasca A project on a fair and equitable basis, the company will streamline its costs while awaiting a gas agreement signing on acceptable terms. “We remain focused on developing PNG’s first offshore oil and gas field and opening up the Gulf of Papua to much-needed investment as soon as circumstances allow.”


Recent Articles

Mining

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.

Company

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. 

Business

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

Join Papua New Guinea's

Business Community

Be the "First" to get our exclusive Digital Magazine & Weekly Newsletter.