Kumul Petroleum recognition means KEO dividend payment to PDL7 landowners
by PNG Business News - August 05, 2022
Photo: Kumul Petroleum Managing Director Wapu Sonk presents to PDL 7 landowner beneficiaries who have established and nominated Kroton Laitepo Equity Limited to receive the KEO benefits on their behalf, their unit certificate and preferential dividends
Papua New Guinea’s national oil and gas company, Kumul Petroleum Holdings Limited announced today that all necessary eligibility process verifications had been completed with the PDL 7 landowners, so that they were able to receive accrued Kroton Equity Option (KEO) preferential dividends.
The 2009 PNG LNG Project Umbrella Benefit Sharing Agreement between the Independent State and recognised provincial governments and landowners impacted by the project were entitled to exercise a commercial option to acquire shares in the State entity taking up shares in the project, known as the Kroton Equity Option.
Wapu Sonk, Managing Director of Kumul Petroleum said, “working closely with the Department of Petroleum and MRDC, we have completed the landowner identification studies for this landowner group, ensuring that they can receive their KEO entitlements.”
“Today I am pleased to announce that Kumul Petroleum can award this PDL 7 landowner group with a share certificate, recognising them and their nominated company, and therefore a cheque for their accrued preferential dividends from 2017 to 2021, for K22.7 million, this is a significant amount.”
“I thank these landowners for their patience over these past 5 years, we are all glad this moment has come.”
The PDL7 landowner beneficiaries have established and nominated Kroton Laitepo Equity Limited to receive the KEO benefits on their behalf.
Mr Sonk added, “It is important that Kumul Petroleum follows due process, including proper identification verified by the Department of Petroleum.”
“We issued a public notice in May this year notifying all KEO beneficiaries to complete KEO eligibility criteria requirement. The PDL 7 landowner beneficiaries are the first to complete this.”
Mr Sonk took the opportunity to also encourage other beneficiary groups to complete their KEO eligibility criteria compliance so that they could also receive their KEO related benefits.
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 - 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
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PNG Business News - August 12, 2022
Going Green: FAO-led EU-STREIT PNG Programme provides green-powered facility to local agricultural authorities to effectively service rural farmers
EU Funded UN Joint STREIT Programme in Papua New Guinea establishes a renewable energy-powered facility to support local government authorities in East Sepik Province, in delivering effective services to rural farmers and entrepreneurs. With generous support of the European Union, the FAO-led EU STREIT Programme officially opened a new 3 cluster office building on 10 August 2022, to host the Programme along with the East Sepik provincial divisions of Agriculture and Livestock, Cocoa Board and the National Agriculture Quarantine & Inspection Authority. The new-look office building is powered by 189 solar panels, which significantly reduce greenhouse gas emissions and reduces the collective dependence on fossil fuel. The solar panels supply the building with 90 KW of energy, relieving the resident agencies and authorities from relying on fossil-generated electricity for their needs, including lighting, ICT, water pumping, and temperature control. This zero-carbon-emission facility has the capacity to accommodate around 90 experts, technicians and extension service officers. Equipped with 120 batteries, the building can support staff’s operation for 36 hours in case of experiencing high cloud cover. The building, currently co-resided by the Programme and provincial agricultural bodies, will be transferred over to the East Sepik Provincial Administration at the end of the Programme and will continue to provide a sustainable base for sustainable support to agriculture-related services in the Province. Officiating the opening ceremony, His Excellency Ambassador Jernej Videtič, Head of the European Union Delegation to PNG, in his address, said: “I am happy to be here and to see that things are moving in the right direction to bring sustainable benefits to the people of East Sepik” Ambassador Videtič further highlighted that “with resources from the citizens of Europe to fund the EU-STREIT Programme in providing training, tools and support, the quantity and quality of cocoa, vanilla and fisheries products will increase. The objective is also to protect these quality products in international markets under the EU-STREIT introduced initiative of Geographical Indication.” The East Sepik Acting Deputy Provincial Administrator, Mr James Baloiloi, in his speech expressed his appreciation to the EU for funding the EU-STREIT Programme and the interventions that the Programme is doing in East Sepik and Sandaun provinces. “The STREIT Programme has gone ahead to introduce a culture of agribusiness that now enables the people of this Province and the people of Sandaun Province to have cash income that can sustain their livelihoods.” Mr Baloiloi added, “this infrastructure and building supports us and facilitates the service delivery to our people in this Province as well as Sandaun Province.” Thanking the EU for its generous funding support, Dr Xuebing Sun, the EU-STREIT Programme Coordinator, said: “the Programme has generated substantial impacts at beneficiary, local institutions and enabling business environment levels. This would not be possible with good partnership, increased ownerships and leaderships of the governments and implementing partners.” “This co-residing and close co-operation among UN agencies and their national partners in this integrated space reflect the partnership approach taken by the Programme to sustainably develop agri-enterprise activities in the region,” added Dr Xuebing Sun, adding “the new climate-friendly facility, which is fully powered by solar energy, also provides a space to welcome, advise and serve the farmers, including interested women and youth, who play very important roles along agri-food value chains”. “This kind of ‘green investment’ enables a shift to a more green economy for local institutions and infrastructure to meet cocoa, vanilla and fishery value chains stakeholders” advised Anthony Bennett, the FAO Lead Technical Officer of the EU-STREIT PNG Programme. United Nations’ implementing partners supporting the FAO-led EU-STREIT PNG present in the office include the International Labour Organization (ILO), International Telecommunication Union (ITU), United Nations Capital Development Fund (UNCDF) and United Nations Development Programme (UNDP). The EU-STREIT PNG is being implemented as a UN Joint Programme (FAO as leading agency, and ILO, ITU, UNCDF and UNDP as implementing partners), is the largest grant-funded Programme of the European Union in the Country and the Pacific region. It focuses on increasing sustainable and inclusive economic development of rural areas through increasing the economic returns and opportunities from cocoa, vanilla and fishery value chains and strengthening and improving the efficiency of value chain enablers, including the business environment and supporting sustainable, climate-proof transport and energy infrastructure development.
Paul Oeka - August 12, 2022
CPAPNG annual meet to discuss global changes
Certified Practicing Accountants of Papua New Guinea will be hosting their 23rd annual conference with about 400 participants nationwide expected to attend the two day conference organized by CPA PNG in Lae Morobe Province from August 18 to19, 2022 CPAPNG was established in 1974 and has come a long way with a lot of achievements along the way. Over the years its membership grew from mere numbers to just below 2000 which includes 40% locals and 60% non-citizens. . The CPA PNG conference is one of CPAs three significant annual events on their calendar with this year's conference theme; Is PNG prepared for the recession?" The conference will see certain key leaders in executive management roles from both the public and private sector delivering presentations in line with the conference theme. CPA PNG's Executive Director Mr. Yuwak Tau said the theme of the conference was selected because there was a decline in the global economy and the general so when that eventuates small economies tend to be affected. He added that they have basically selected the theme that was current and appropriate so that members would find relevance during the course of the conference. “The meeting is to create intellectual and interactive discussions with seasoned business leaders to present and share their ideas and experiences to find probable outcomes within their business environment and industries in times of economic uncertainty”. Some of the topics to be presented by consultants are current significant issues such as crypto currency, transport pricing, bit coin block chain technology and stress management. This were some topics that people have heard about but have not really ventured into. Mr. Tau added that it would be quite hard to measure the benefits immediately but the participants will be able to look at insights shared during the conference that would be appropriate in the areas of employment, accounting, finance, auditing and others. The conference will create an environment where participants can also share information so That they can take points to apply in their work place and industries. In relation the Kumul petroleum Holdings had also presented a cheque of K50, 000 to support the coming event at their head office. The cheque was presented by KPHL's executive General Manager Corporate Affairs, Luke Liria and was received by CPA PNG Chairman Richard Kuna. Mr. Liria said KPHL has appreciated the effort put in by CPA PNG to ensure that its members in State owned enterprises and the private sector were given appropriate level of training and as part of KPHL's corporate social responsibility and commitment they hope that their support will continue to help the organization facilitate and make sure the accounting practices is of international standards. CPA PNG's Chairman, Richard Kuna acknowledged KPHL for their support and stated that he was looking forward to seeing KPHL being a big part of the upcoming conference.
Paul Oeka - August 12, 2022
BSP: Small to Medium Enterprises Loans reaches 60% rate.
Bank South Pacific's Financial Group Ltd Chief executive officer Mr. Robin Fleming has recently announced that the bank has granted more than K200 million as loans to small to medium enterprises under its credit scheme facility that the then Marape government had released to the bank to support Small to Medium Enterprise (SME) and local businesses during the peak of the COVID-19 pandemic. Mr. Fleming said about 1523 customer loans have been approved, that is about 60% of loan approval rates since 2019. Prior to this announcement BSP and the Department of Commerce and Industry (DCI) had agreed to increase the maximum loan under the small-to-medium enterprise (SME) credit enhancement facility to K5 million. The previous limit was K3 million when the Government first released K100 million as security to the bank under its K200 million SME allocation for BSP to rollout the loan facility last year. Fleming stated that even though they have exhausted and rolled out the bulk of the governments relief funds for SME's they will still be running the SME loan program under its credit facility scheme “At this stage, BSP has not received the funding planned for this year but that is not preventing BSP from giving loans under the facility”. “There remains significant capacity for BSP to continue to assess, approve and funds loans under the facility”. “The agreement with the Government did provide for momentum in the SME facility to be maintained while allowing for the Government budget and funding process to be adhered to”. As part of the government SME relief funding, Commercial Banks were allocated K200 million with BSP Financial Group receiving K100 million, NDB K80 million and another K20 million was allocated to the department of Commerce and Industry BSP could not comment on how the National Development Bank (NDB) is dealing with the K80 million it received, but the intent, when discussions were initiated, was that BSP would be lending to more mature SMEs and NDB to startup ventures. In addition to enabling SMEs to access lower cost of funds through the facility with BSP, the bank has also made it a responsibility to ensure that Government funding is preserved by not approving loans that have a higher risk of default.