Kumul Petroleum thanks Government for Pandora Licence
by PNG Business News - September 06, 2021
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 - 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 - August 30, 2021
Kumul Petroleum Pays Interim Dividend of K100 million to state
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 - April 18, 2022
Government partnership results in official opening of Kumul Petroleum National Heart Centre
Every year, hundreds of Papua New Guinean’s will require life-saving heart procedures as lifestyle related disease and coronary heart disease is among the top ten common cause of admission at the Port Moresby General Hospital. Today, Papua New Guinea’s largest referral hospital, Port Moresby General Hospital (PMGH) officially opens a fully equipped 30 beds cardiac ward with 6 self-contained private rooms that will provide Papua New Guineans specialised medical treatment that was once unavailable in-country given the lack of clinical specialists, equipment, drugs and consumables. With the support from the Government of Papua New Guinea and Kumul Petroleum Holdings Limited (Kumul Petroleum) through a tri-partite agreement between the National Department of Health (NDOH), PMGH and Kumul Petroleum, who as Papua New Guinea’s national oil and gas company allocated K50 million to improve cardiac services within the country; this will be a thing of the past as Papua New Guineans receive life-saving heart procedures such as stenting and angiograms at the Kumul Petroleum National Heart Centre. Dr Paki Molumi, Chief Executive Officer of Port Moresby General Hospital said at the official opening that in recognition of the enormous contribution which makes a direct impact of the lives of Papua New Guineans, the Board of PMGH named the cardiac center the “ Kumul Petroleum National Heart Centre” . Managing Director of Kumul Petroleum Wapu Sonk said that Papua New Guinea’s national oil and gas company was honoured by the recognition of the Board of PMGH and said Kumul Petroleum is very proud to be associating itself with Papua New Guinea’s largest referral hospital in the area of Cardiac Surgery and specialist care that our country has been lacking for a long time. “When we signed the MOA in 2020, and thereafter I iterated that the Board of Kumul Petroleum is very committed to see the spending of the K50 million funding support that we committed, on the right equipment in developing the right skills, and in making sure, the services delivered at the right price to our people. “I am pleased to note from what Dr Molumi has said that this vision has become a reality. Through this partnership with PMGH and NDOH, Papua New Guineans will no longer spend on average up to K200, 000.00-K250, 000.00 to receive the lifesaving cardiac catheterization and stenting procedures they needed to travel overseas for specialist medical care. Since, the first stenting procedure, witnessed by Kumul Petroleum Trustee, Prime Minister Hon. James Marape on 22 July 2021, Papua New Guineans have received this procedure for free then subsequently at a fraction of the cost as of 28 January this year, saving citizens on average 95-96 percent of what will have been spent if they travelled overseas. Today, an angiogram alone and stenting services combined may cost a maximum of K2, 500.00 - K10, 000.00.” “Today’s official opening goes to prove that with joint cooperation with national companies and government partnership is the way forward to realise tangible benefits for our people. Today, celebrates a major policy achievement not only for us as a company, or Port Moresby General Hospital; but for us as a nation following 47 years of Independence where a national facility is funded by our people with returns from investments of our natural resources, equipped, and led by our national staff and doctors.” Minister for Health and HIV/AIDS Hon. Jelta Wong acknowledged the positive results of the partnership by the National Department of Health, PMGH and Kumul Petroleum; praising all parties to the MOA for the achievements thus far, and the opening of the Kumul Petroleum National Heart Centre. Dr Molumi added that further improvements under the cardiac program supported by Kumul Petroleum, are the cardiac outpatient or non-invasive cardiac outpatient which is completed and fully equipped with some of the latest and quality cardiac equipment. They include, Electro cardiogram machines, Echo machines and treadmill machines for stress test ready to be used after this opening. Under the arrangement Kumul Petroleum pays for the equipment which is chosen by the end-users. This has allowed for the purchase of quality branded medical equipment which is available in any modern hospital. Plans are under way to build an operation theatre complex which will have a specialized cardiac theatre. The cardiac operation theatre once built will complete the cardiac program from Diagnostic Services at the non-invasive cardiac outpatient, Invasive Cardiac Services at the Cardiac Catheterization Laboratory and coronary care unit and admissions to the cardiac ward. This means PMGH will be able provide the full cardiac services from Diagnostic to Cardiac Catheterization and cardiac surgery. That will be replicated to the rest of the country. The Kumul Petroleum National Heart Centre was officially opened by Her Royal Highness, Princess Royal while on a tour of Papua New Guinea on behalf of Queen Elizabeth II on her Platinum Jubilee. Article courtesy of Kumul Petroleum
PNG Business News - February 05, 2023
PNG Tourism Promotions Authority (TPA) and Bougainville TPA signs MOU
The Department of Commerce, Trade and Industry reached another milestone recently when it signed a Memorandum of Understanding (MoU) with the Papua New Guinea (PNG) Tourism and Promotions Authority (TPA). The MOU paves the way forward for both parties to continue bilateral partnership based on the understanding of tourism and promotions in Bougainville. The MOU was signed by the PNG TPA and the ABG Department of Commerce, Trade and Industry on the understanding relating to a joint partnership for the protection and preservation of tangible and intangible culture, development and promotion of tourism, contemporary culture and the arts and sustainable tourism in the autonomous region of Bougainville. ABG Vice President and Minister for Commerce Trade and Industry, Hon. Patrick Nisira (MHR) acknowledged the PNGTPA for its tremendous support so far since the first MoU was signed in 2016. The support has cemented many agreements already signed and has proven that Bougainville is truly a tourism destination that is worth investing time and money on. Mr. Nisira acknowledged the PNG TPA officers for their continuous negotiation with the Bougainville partners in pushing for significant income generating programmes to proceed in the region. “Standing here today it gives me great pleasure to witness and participate in this significant event that will go down in history books of this nation to be. We are here today to mark this important event on the signing of the MOU between my ministry and the department of national government and PNG Tourism Promotions Authority (PNG TPA).” This agreement adds value to our collective vision, ideas and consultations that the local tourism and cultural practitioners in both government and private sectors, he said. “As a way forward the agreement presents a realistic and workable approach to tourism development and its sustainability in the region.” “The MOU also sets out a framework for future development for tourism emphasizing on effective and determined and holistic approaches.” He said that the agreement generally outlines the pros and cons of tourism development in Bougainville and the framework and strategy of reaching the targeted goals and vision earmarked to reaching the overarching goals of economic building and development. Deputy Chief Secretary for Operations Anthony Koiri approved and signed the MOU on behalf of the Bougainville Public Service Chief Secretary who is on sick leave at the moment. The signing was witnessed by the staff of the PNG Tourism Promotions Authority (PNGTPA), Department of Commerce, Trade and Industry, senior officers and a small crowd at the Bel Isi park.
PNG Business News - February 05, 2023
PNGEITI POSITION ON PORGERA MINE LEGACY TAX ISSUES
The PNGEITI Head of Secretariat Mr. Lucas Alkan says all parties to the Pogera Mine must adhere to rules governing the extractive industry, particularly when dealing with fiscal matters that must be administered and observed according to law. His comments follow a news article on The National citing the Internal Revenue Commission (IRC) that unmet tax obligations of the Pogera mine stood in the way to expedite the mine re-opening process. Mr. Alkan says a workable and timely strategy that does not impinge on basic laws is a way forward. Below is the full comment on this issue. “The Papua New Guinea Extractive Industries Transparency Initiative (PNGEITI) commends The National newspaper for attempting to bring to light what appears to be the final outstanding issue (among others) in the Porgera Mine recommencement negotiations (more on this in footnote). We’ve noted from the reporting that taxation matters are legacy issues that appear to be standing in the way for the multi-million-kina Porgera Gold Mine to re-open. We have observed that the Government was on track to conclude negotiations and re-open the Mine by June last year, however this did not eventuate as anticipated. Attempts to reopening the Mine in the second half of last year was not feasible due to the national general elections and the formation of government. It appeared that all negotiations were concluded and a new Porgera Mining Agreement Framework was in place for the Mine to be re-opened in the first quarter of this year. Surprisingly, we learn that an old Porgera Tax liability dispute is standing in the way for the Mine to be re-opened. The early recommencement of the Mine, preferably within the first quarter of this year is critical for the country as the lead time required for mobilizing resources and the significant start-up capital needed to get the mine back into its full operating capacity would be a significant challenge. On this, we are aware there are also discussions going on with the developer and the government as to who is going to meet the startup cost but we understand Barrick Niugini Limited might meet the full cost of starting up the Mine and government would refund later but unsure as to whether this understanding has been reached or not yet. With regards to the current standoff, the EITI based on its global best practice principles is of the view that the existing law governing taxation matters must dictate or take precedence over any political intervention. We do not know the specifics of the on-going tax matter but understand that it is related to a tax dispute concerning the ‘old Porgera Mine’. If it is a significant amount of tax owed by Barrick to the Government based IRC’s audit in 2013 then it is a legal tax obligation that Barrick and its joint venture partners need to settle as required by law. We fail to understand as to why the old Porgera tax obligation/liability clause was inserted into the new Porgera Mining Framework Agreement making it a condition to resolve this legacy tax issue before reopening the Mine. If whatever was reported and commented by PM Marape recently is true then Barrick Niugini Limited and the State need to speed up the negotiation process and resolve this dispute immediately. Both parties should exercise good faith – Barrick Niugini Limited should not pull strings on this old Porgera tax liability matter and delay the re-opening of the Mine. It is understood the State (IRC) may not easily forego if there is a substantial amount of tax liability to be paid by the operator. Whatever the parties decide to do, they should resolve the tax liability issue through the due process of law but allow the Mine to re-open immediately under the New Porgera Framework Agreement. Political intervention is not recommended to resolve this dispute as this can undermine investor confidence, set bad precedence for the Government and create an uneven playing field for project developers. Barrack Niugini Limited should not put undue pressure on the State to resolve this matter politically in order to re-open the mine as it is not a best business practice. All stakeholders and the citizens have the right to know the specific issues or the nature of this tax liability issue between Barrick Niugini Limited (BNL) and the Internal Revenue Commission (IRC) as the continued delay in re-opening the Mine continues to have negative consequences on the economy. The prolonged delay has not only resulted in significant revenue loss to the Government (including the provincial and local level governments in the impacted resource area) but also loss of employment, business opportunities and spin-off benefits to the landowners and the wider communities. The shutting down of the Mine 3 years ago has had significant negative consequences on the economy including the current foreign exchange shortage that has constrained business operations in the other sectors of the economy. Porgera Mine had been a good source of foreign exchange inflows and its continued shutdown will definitely not going to contribute to the 4% economic growth (that was largely to be driven by the extractive sector) projected for by the World Bank for last year and the real GDP growth of 4% projected for this year in the 2023 National Budget. PNGEITI commends the transparent negotiation process to date that took substantial amount of time and effort to ensure the interests of all parties were reflected in those agreements. We encourage all parties to continue to respect and observe the laws of the land in this dispute resolution process to address the tax liability issue. We believe that a win-win situation for both parties (Government and Barrick) is to re-open the mine first and work together to resolve the outstanding tax liability dispute later going forward.
PNG Business News - February 02, 2023
Weir Minerals releases the 6th edition of the Warman® Slurry Pumping Handbook, the definitive resource for slurry pumps
Photo: The Warman Slurry Pumping Handbook is the definitive guide for most slurry pumping applications. Weir Minerals, manufacturer of the industry-leading Warman® slurry pump, has released the latest edition of their coveted Warman® Slurry Pumping Handbook. The 6th edition, compiled by the most trusted name in slurry pumps, features detailed engineering data required for most slurry pumping applications. Drawing on decades of Weir Minerals’ inhouse expertise in innovative engineering and slurry pumping technology, the new handbook has updated reference material based on new learnings, improved understanding and technological developments within the mining industry. With customers always in mind, the handbook aims to empower engineers to achieve optimal performance from their Warman® slurry pumps. An increased global focus on the environment, energy consumption and water conservation will influence slurry pump design and considerations – making this latest handbook an essential tool for all current and future pump engineers. “Pumping slurry has many challenges and I’m excited to publish our latest handbook, packed with fundamental theory, application advice, standard practices and latest Warman learnings from the field; all aimed to help our customers, present and future, deliver with excellence.” Marcus Lane, Director, Slurry Pumping Technology Group Weir Minerals are continually striving to shape the next generation of smart, efficient and sustainable solutions with cutting-edge science and innovation. The comprehensive handbook includes over 140 pages of detailed information, including performance charts, impeller design, part configuration, assembly and slurry considerations – fully supported by accurate technical renders and specifications. “The high quality of the reference material in this essential resource reflects the leading status of the Warman slurry pumps. As the industry leader, we have a responsibility to develop our future engineers; we will make the latest version of the Warman Slurry Pumping Handbook available not only to our customers, but also to the leading schools worldwide, so they can learn from the best in the industry.” John McNulty, Vice President Global Engineering & Technology. As part of Weir Minerals’ commitment to investing in STEM education and developing the next generation of engineers, copies of this essential resource will be gifted to the leading mining and engineering educational facilities around the world, including the winner of the 2022 Warman Design & Build competition, Deakin University in Australia.