Kumul Petroleum Holdings defends its role
The chairman of Kumul Petroleum Holdings Limited (KPHL) has clarified the role of the national oil firm.
Chairman Andrew Baing said the KPHL was established with the intention to be a corporate institution capable of commercial operation and profit generation like any other privately-owned business entity.
Mr Baing said the idea was adapted by taking into consideration the lessons and principles that created some of today’s powerful national oil firms such as Malaysia’s Petronas, Indonesia’s Pertamina and Brazil’s Petrobras.
He said the government intentionally excluded the application of the Public Finances (Management) Act on KPHL as part of this thinking, and more particularly because of the following critical commercial considerations:
- To enable KPHL to become financially independent so that KPHL did not run to Treasury to seek funds for its investment and operational requirements;
- To enable the State’s liabilities and loan obligations do not affect KPHL’s ability to finance its investments and operations;
- Conversely external funding as and where the economy dictates; and,
- More importantly, to limit political interference in the commercial operation of KPHL.
“KPHL’s mandate as PNG’s NOC and its governance and reporting requirements were established through the Kumul Petroleum Holdings Limited Authorisation Act 2015 (KPHL Act) and further strengthened by section 212b of the Constitution of PNG and other provisions,” Mr Baing said.