Petroleum companies working with Government to find solution to fuel crisis
by PNG Business News - February 22, 2023
Photo: An empty service station at 8-Mile in Port Moresby after the fuel bowsers ran dry.
The Government is now in serious discussions with Kumul Petroleum Holdings Ltd (KPHL) and three multi-national petroleum companies to find solutions for the fuel shortage in the country, with a major announcement expected soon, Prime Minister Hon. James Marape has said.
The Prime Minister said the Government has been holding talks with ExxonMobil, Total Energies and Santos, together with Mineral Resources Development Company (MRDC) and State-owned company KPHL, to look into the immediate import of fuel and a long-term solution in the construction of a locally-based refinery for downstream processing to secure the domestic market.
Prime Minister Marape said today (February 19, 2023) Papua New Guinea, under his Government, was heading in the direction of downstream processing of its resources but Puma Energy’s actions of recent months have forced the Government to act now rather than later in this area.
“Our fuel insecurity due to reliance on one or two suppliers is forcing the Government to urgently call on its State-owned Enterprises and major oil companies operating in the country to finding solutions,” said PM Marape.
“The Government is now collaborating with Kumul Petroleum, MRDC, ExxonMobil, Total Energies and Santos to explore solutions that can ensure the country’s fuel security, including aviation fuel and general fuel.
“We are leaving no stone unturned. What has happened under Puma must not be repeated. For far too long, this country has been victimised when, in fact, Papua New Guinea continues to export petroleum and gas to the world year after year. The irony is staggering.
“I am, therefore, pleased to note the progress the Government is making with our national development partners – ExxonMobil, Total Energies and Santos.
“I am also looking forward to the moment when we can make the announcement on the immediate solutions we have worked out to resolve this relatively long-standing issue.”
Papua New Guinea was plunged into an acute shortage of fuel at the end of last year 2022 when Puma Energy PNG Ltd announced it could no longer source crude oil and finished products because of unresolved foreign currency issues. This affected its supply of fuel to PNG, especially to the aviation industry where Air Niugini was forced to ground its flights and left the travelling public stranded for days as a result. The matter raised huge concerns on supply monopoly and the country’s fuel security both for short and long term.
PNG Business News - February 27, 2023
International Trade Minister Richard Maru Urges Swift Resolution to Fuel Shortage
Photo: Richard Maru International Trade and Investment Minister Richard Maru has expressed his concern about the ongoing fuel shortage in Papua New Guinea, stating that it could send the wrong signal to investors willing to do business in the country. Maru emphasized the need to resolve the issue quickly, saying, "This will leave a bad impression on our investors. It cannot be an ongoing situation where we hold up business activities and service suppliers. My concern is the investors. It is beginning to create a pattern and we must not allow it (to continue)." Maru also urged Puma Energy and the Bank of Papua New Guinea (BPNG) to find a solution to the constraints in the supply of foreign exchange (FX) that prevented Puma Energy from purchasing crude oil. He said, "I'm sure Puma Energy and the Bank of PNG understand that and will come up with a resolution that will benefit everyone." Puma Energy's country manager, Hulala Tokome, confirmed that the company had not received FX flows for over six weeks, which was the reason behind the fuel shortage. he said, "Puma Energy could not purchase crude oil due to the constraints in the supply of foreign exchange (FX)." BPNG has maintained its stance that Puma Energy should be dealing only with commercial banks. The fuel shortage has affected motorists and fuel service stations in Port Moresby, Lae, and Mt Hagen. Maru emphasized that the fuel shortage would mostly affect businesses, saying, "It is important that the issue be resolved quickly. This will leave a bad impression on our investors. My concern is the investors. It cannot be an ongoing situation where we hold up business activities and service suppliers." In conclusion, Maru called on Puma Energy and BPNG to find a resolution that would benefit everyone and ensure that such fuel shortages do not happen again in the future. He said, "We must not allow it (the fuel shortage) to continue."
PNG Business News - February 28, 2023
PNG ECONOMY FACES ANOTHER FUEL SUPPLY THREAT
Photo credit: Puma Energy Amid current economic issues in Papua New Guinea such as high inflation and unemployment, a shortage of foreign exchange currency last week crippled the country's fuel supply immensely, marking the second major nationwide fuel crisis within three months. This was the result of an ongoing situation between the Bank of Papua New Guinea (BPNG) and the country's major fuel products supplier, Puma Energy, due to a lack of diligence in discussions by both parties concerning the approval of the fuel firm's foreign exchange orders by the country's financial regulator. By 17th February, the nationwide shortage in fuel prompted business houses and the public to be held to ransom and left to squander what was left of Puma Energy's limited supply. Puma Energy confirmed in a letter to the media that none of its propositions have been satisfied from agreements discussed with Prime Minister James Marape during his meet with company executives in Singapore. Puma's Country General Manager, Hulala Tokome, revealed that what was discussed and agreed upon in Singapore with the government had not been honoured. "Our FX orders have been restricted by the Bank of PNG, which is limiting our ability to operate and ensure the supply of product into the country. The root cause of the problem is for the Bank of PNG to approve our FX orders. If our FX orders are not settled this will impact the availability of fuel supply," he said. "A total shutdown by Puma is going to affect a lot of businesses nationwide, because it takes us more than a month to replenish our fuel stock," Mr Tokome said. Propositions by the government in ensuring an immediate solution since the last fuel shortage have not come to fruition, and it has shown no tangible outcomes in affirming a confirmed alternative. This has prompted major service providers to ration their fuel intake, leading to flight disruptions, constant power blackouts, cuts in water supply, and a huge delay in business activities and operations due to the limit suppliers have put on fuel consumption. State entities have also voiced their concerns with Commissioner of the Independent Consumer and Competition Commission (ICCC), Paulus Ain, stating that the impact of fuel disruptions in PNG is of "grave concern" and that the ICCC is encouraging fuel suppliers to enter into the PNG market. "There is no restriction for other suppliers to enter into the fuel supply market," Mr. Ain said. Government departments and agencies responsible for facilitating potential entrants should not become a barrier but assist and facilitate possible and potential entrants," he said. In addition, Institute of National Affairs (INA) executive director Paul Barker also said there needs to be honest and transparent negotiations between Puma Energy and Bank of PNG. Barker said all major forex transactions for each month should be made available and posted online to the market and public, so that ongoing disputes and claims can be openly verified. In relation to the ongoing fuel saga, discussions by the government with Kumul Petroleum Holdings Ltd. (KPHL) and multinational companies ExxonMobil, Total Energy, Santos, and the Mineral Resources Authority (MRA) are still pending. The Prime Minister recently stated that the government will be heading towards locally based downstream processing, but Puma's current stance has questioned the government's timing on when a local refinery is scheduled to come into play. While the government has made its appeal to suppliers of fuel there are also underlying issues affecting the flow of foreign currency to the domestic foreign exchange market. The fall in forex together with issues concerning PNG's major economic sectors are contributing to high inflation, unemployment, and the ongoing threat in fuel supply.
Paul Oeka - March 27, 2023
Papua LNG project to Minimise Economic Challenges
Photo: Petroleum Minister Kerenga Kua Petroleum Minister Kerenga Kua has recently stated that the Papua LNG project is critical in addressing some of the economic challenges that are currently faced in the country. He said about K75 billion will be generated over a 15 year period when the project is in progress. He added that the initial stages of the project has commenced with K500 million said to be inputted into PNGs foreign exchange capacity in 2023. During a press conference on Thursday the 9th of March, The Petroleum minister highlighted the progressive stages of the Papua LNG project and emphasized the importance and significance of the benefits that the project will provide. According to studies the project life is expected to operate over a 15 year period that will generate about K75 billion and significantly boost Papua New Guinea's struggling economy. "The K75 billion benefit is inclusive of what comes to the state directly as levies, to Kumul Petroleum, to the landowners as royalties and the provincial governments. All of us put together are going to be collecting and sharing that benefit in the next 15 to 20 years", Kua said. Minister Kua said that studies for the Papua LNG project began in 2004 following the discovery by Interoil, the resource estimate is in the range of 6 trillion cubic feet of gas and 98 to 100 million barrels of condensive oil. The benefit of this project is immense and a positive component is the national content which is expected to positively impact GDP, export earnings, forex, revenue to impacted levels of government, landowner benefits and Job opportunities. Minister Kua said the project developer Total Energies will inject K500 million into the PNG economy in 2023. "The Papua LNG project is a project of national significance for Papua New Guinea and will stimulate business confidence and will provide a significant impetus for our economy", "The Marape-Rosso government places high priority on the delivery of the Papua LNG project, we have an improved deal for our people, and improved contribution for our national contractors and workforce. The government strongly supports the Papua LNG project and encourages all stakeholders including project partners to work diligently to deliver the project on time and on budget", Minister Kua said. Petroleum Secretary David Manau was also present at the conference, he highlighted that the petroleum department will work closely with impacted provincial governments and landowners as this is important in ensuring that all stakeholder grievances are discussed and addressed. In light of this, a development forum is expected in the third quarter of this year. Meanwhile, Kua also revealed a unique aspect of the upcoming project which will mitigate the project's carbon footprint and is set to make PNG in becoming the first country in the Asia Pacific region and only the second on the world to re-inject carbon dioxide back into the well pad in a LNG project. He said the re-inspection of carbon dioxide into the well pad is a significant step towards reducing the project's carbon footprint and will help mitigate the environmental impact of the project and contribute to Papua New Guinea's efforts to combat climate change. The Papua LNG project is a joint venture between the PNG government, TotalEnergies and Exxon Mobil. It is one of the largest investments in the country's history and is expected to generate significant revenue for PNG's economy. Total Energies holds 40.1 percent interest in Papua LNG, along with its joint venture partners Exxon Mobil (37.1 percent) and Santos(22.8 percent). The Papua New Guinea government may exercise a back-in right of up to 22.5 percent interest at the Final Investment Decision (FDI) planned by end of 2023 to early 2024 and production will be scheduled for four years later.
PNG Business News - March 27, 2023
WanPNG: The Skills Development and Jobs Platform for the People of Papua New Guinea
Wan PNG is a platform and community dedicated to expanding opportunities for local Papua New Guineans. Its goal is to increase the development and sustainable employment of local PNG talent, so everyone in our great nation can share in newfound resources and growing prosperity. With the goal of empowering individuals and businesses with the skills and people they need to succeed in the 21st century world, the Wan PNG platform spans three core areas for job seekers: Employment opportunities: Gain experience with internships, start earning with entry positions, or upgrade your career with the next big job. Career advice: Advance your career with expert advice and professional resources, and stay up-to-date on the latest news. Education and training: Expand your employment prospects by upgrading your knowledge, skills, and competencies through courses. For employers it provides: Free access to upload jobs and find the best talent. Smart matching between jobs and candidates. Diversity promoting candidate suggestions reaching a wide pool of talent. The platform's primary objective is to promote lifelong learning and employment and simultaneously bridge the skills gap in Papua New Guinea by providing accessible training opportunities to all its citizens. WanPNG believes that by investing in the development of its people, Papua New Guinea can unlock its full potential and become a more prosperous nation. WanPNG is now available for job seekers and employers. Visit the website now at www.wanpng.com to learn more.
PNG Business News - March 27, 2023
St John Ambulance First Aid Training for Workplace
The St John ambulance service responded to over 21,000 emergencies across Papua New Guinea in 2022. In addition to being Papua New Guinea’s main emergency ambulance service, St John is the nation’s leading first aid training provider equipping thousands of workers with essential first aid skills and knowledge. With just one day of training, St John’s expert first aid trainers can equip your workers with the basic skills to handle all kinds of first aid emergencies. Workplace accidents and injuries are a common occurrence and it is essential for employers to have a competent workforce that can respond effectively to emergencies. St John’s workplace first aid courses ensure your workforce is equipped with the first aid training to assist a sick or injured person. It also helps organizations comply with legal requirements, reduce workplace injuries and fatalities and promote a culture of safety and preparedness. The Papua New Guinea St John Ambulance provides training routinely in Port Moresby and Lae, and can facilitate training at any location in PNG, which makes it easy for workers to gain or maintain their first aid qualifications. St John’s first aid trainers come from a variety of backgrounds, enabling them to contribute real-life experiences to the training environment. Each course, based on St John Ambulance Australia’s training resources, goesthrough rigorous appraisal by training and health specialists including St John’s Papua New Guinea’s medical expert advisory panel - made up of some of the industry’s leading physicians and health professionals, who ultimately endorse the clinical training content components of the first aid courses. St John CEO Matt Cannon said, “this rigorous appraisal process gives clients the confidence of St John’s commitment to delivering the highest quality in training content and delivery in Papua New Guinea.” Workplace first aid courses cover a broad range of topics, including basic life support, wound care, bandaging, splinting, CPR and using an AED. Participants learn how to identify and manage different medical emergencies such as heart attacks, strokes, burns, fractures, and poisoning. Each training program is designed to be flexible and can be delivered on-site or at one of our training centres. If you want to ensure that your workplace is prepared to respond to emergencies, contact St John today to learn more about our workplace first aid training.