EU MPs positive on oil palm

KUALA LUMPUR: The European Union (EU) members of parliament (MPs) are impressed with the oil palm industry’s contribution towards creating wealth and economic growth for Malaysia.
Danish MP Dan Jorgensen, who is vice-chairman of the Environment Committee and member of the Group of Progressive Alliance of Socialists and Democrats in the European Parliament said: “As a whole, I think, it has helped take people out of poverty, which is a very positive thing.”
“The challenge now is the sustainability of the commodity. Even though progress has been made, there is still possibility of becoming better in this area,” he said after a stakeholder roundtable discussion on issues related to biodiversity and the sustainability of Malaysian palm oil here last Friday.
Jorgensen was on a week-long visit to Malaysia together with two other EU MPs – Martin J. Callanan (Committee on the Environment, Public Health and Food Safety) and Ole K. Christensen (Member of the ACP-EU Committee).
Jorgensen said the next decade would continue to see an increase in the focus on sustainability as a competition criteria on the global stage, whether for fuel, food or other commodities.
Some EU MPs on a visit to Malaysia say the sector has helped take people out of poverty
“From the sustainability point of view, palm oil has great potential compared with other oils,” he added.
Many have voiced concern over the new sustainability criteria in the EU Renewable Energy Directive, due to come into force from Dec 5, and its impact on palm oil-exporting countries like Malaysia.
On that matter, Jorgensen expressed the willingness of MPs to assist Malaysia in ensuring there was no discrimination against the country’s palm oil export to the region.
“First, we do not want any discrimination at all of the palm oil sector. We have promised our friends in the industry here to help them in discussions that we have in the EU on different criterias.
“If there has been any discrimination, we will do everthing possible to change it.
“Second, we are at the same time very committed to the sustainability criteria,” he said.
The sustainability criteria is related to two issues – the lifecycle greenhouse gas emissions of biofuels and the land used to produce the biofuels.
Christensen noted that in western Europe, there was perception that palm oil is a bad thing because rainforests are being destroyed to make way for plantations.
“That’s what many people believe. So, we are gratified to get assurances here that Malaysia has strict laws to ensure no more forests are destroyed,” he said.
He also said it was a challenge to get this point of view across to the Western audience. — Bernama

Shortage of oil palm seedlings

By JACK WONG jackwong@thestar.com.my
Demand set to rise as Sarawak steps up development of oil palm plantations
KUCHING: Sarawak, which is facing a shortage of oil palm seedlings, is expected to see rising demand as the state has yet to develop a quarter of its target of one million hectares of oil palm plantations, said State Assistant Minister in the Chief Minister’s Department Naroden Majais.
He told an oil palm seedling entrepreneurship course here recently that Sarawak needed 16.4 million seedlings last year but the supply only amounted to 10 million.
Juara Beetuah Sdn Bhd managing director Michael James attributed the shortage in Sarawak, especially over the past two years, mainly to exports of oil palm seedlings to Kalimantan, Indonesia.
He said such sales had however abated as the Indonesian plantations, most of which were owned by Malaysian firms, had started their own nurseries.
Juara Beetuah, a major seedling producer and the only company in Sarawak awarded the competency certificate by Malaysian Palm Oil Board (MPOB), owns nurseries in Lundu (Kuching Division), Bintulu and Lawas in northern Sarawak.
Some EU MPs on a visit to Malaysia say the sector has helped take people out of poverty
James said his company produced up to 100,000 seedlings a year, which were mainly supplied to MPOB. The latter then distributes them to smallholders.
Juara Beetuah’s other customers are government agencies like Sarawak Land Consolidation and Rehabilitation Authority and Felda, which are involved in plantation projects.
“We produce based on advance contracts. On top of that, we produce another 10% for the market,” he told StarBiz.
Juara Beetuah uses high-yield clones that are able to produce between 28 and 33 tonnes of fresh fruit bunches per hectare a year.
However, James said the output would depend on several factors such as soil conditions and plantation management methods.
The company sells seedlings for RM8 to RM12 each, depending on transportation costs.

Popoitai: Liquidity from gas project a problem

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By SHEILA LASIBORI
THE PNG liquefied natural gas (LNG) project will continue to inject liquidity into the banking system over the construction phase.And the presence of increased liquidity is a major concern for the Bank of PNG (BPNG) that must act to diffuse it, according to Deputy BPNG Governor Benny Popoitai.BPNG uses the treasury bills (TB) to reduce or remove liquidity in the banking system.Popoitai said a wealth fund was appropriate to assist in keeping the liquidity level within the banking system at a lower rate.“Our current liquidity situation to date is that we have gone well over K700 billion in liquid assets in the banking system.“Our exchange settlement accounts has also gone over K500 million.“The basic indicator of the liquidity situation of the banks is that when the exchange settlement accounts of the banks with Central Bank increases, it indicates that they increased with liquidity.“That is a situation that we have to give a serious thought in dealing with the liquidity level,” Popoitai said yesterday in Port Moresby during the international and domestic stakeholders’ workshop on the possibility of setting up a wealth fund.“Much of that liquidity is injected from the construction of the LNG project as well as drawdown of the trust accounts from the BPNG,” he added.

New push to conserve tuna stocks

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By SHEILA LASIBORI
EIGHT Pacific Island countries, including PNG, are enforcing five new measures to conserve tuna in the Western Central Pacific Ocean (WCPO).The five new measures are:1) Reducing US treaty effort;2) Closing the rest of the high seas between 10 nautical miles and 20 nautical miles south to purse seine fishing;3) Extending the fish aggregating devise (FAD) closer to five or six months;4) Extending FAD closure on foreign fishing vessels only (or maybe a complete ban on use of beacons by foreign vessels; and5) Extending the FAD closure for purse seine fleets of commission (Western Central Pacific Fisheries Commission) member countries whose long line fleets take more than 4,000 tonnes annually in the high seas.National Fisheries Authority managing director Sylvester Pokajam made the disclosure while commenting on the status of tuna stock in the WCPO.The eight countries are: Palau, Federated States of Micronesia (FSM), PNG, Solomon Islands, Nauru, Kiribati, Tuvalu and the Marshall Islands.The countries drew up the additional measures prior to the fisheries ministers meeting in April this year during the Pacific Fisheries Agency (PFA) officials and ministers meeting in Solomon Islands.

Private sector urged to invest

THE private sector has been encouraged to consider investing in agriculture and manufacturing sectors to take advantage of the opportunities provided by the PNG liquefied natural gas (LNG) project which is essential for broad-based employment and income-earning opportunities.But the government must fully play its part by ensuring that roads, airstrips, ports, education and training utilities are operational and other investment conditions in place including a level playing field for competition, addressing law and order and corruption issues which hinder progress, according to the Business Council of PNG (BCPNG).“A stable exchange rate and low interest rates are needed for continued investment and a well managed and transparent sovereign wealth fund would be needed to restrain inflation and excessive currency appreciation, thus enabling other key industries such as agriculture, tourism and manufacturing to become viable once LNG revenue starts flowing,” Gerea Aopi, vice-president for BCPNG said.This was part of his closing remarks at the closing of the 26th Australia PNG business forum and trade expo in Townville, Australia this week.Aopi said the funding for the LNG project was secured in a tough financial market, and signalled the market and investor confidence in the project partners, led by ExxonMobil.“It also is a vote of confidence in PNG as an investment destination.

NBPO posts US$4.3mil profit drop

By YEHIURA HRIEHWAZI in Brisbane
NEW Britain Palm Oil (NBPO) recorded a drop in profit of US$4.3 million (K12.11 million) in the first quarter of this year, forced mainly by bad weather affecting fruits, road conditions and haulage.The company also announced that it will start operating its Liverpool refinery in England “within next month” and its chief finance director of 18 years David Dann will also leave the company in August.The announcements were made in Singapore as NBPO unveiled a profit of US$23.3 million (K3 million) for the three months to March 31, down from US$27.6 million (K78 million) in the same period last year. Sales climbed to US$82.1 million (K231 million) from US$73.8 million (K207 million).While the average price per tonne of crude palm oil climbed to US$767 (K2,154) from US$747 (K2,098), production fell to 86,025 from 87,690 tonnes.NBPO said Dann was “leaving the company to pursue other interests” and will work until Aug 31 to help smooth the handover. During the handover period his duties will be taken over by chief financial officer Amir Mohareb.Mohareb, who previously worked closely with Dann, is promoted to the top finance role and is expected to take up all of Dann’s operational duties following a three-month handover.Mohareb, who will “not immediately” join the board, currently works out of the PNG office and will transfer to the main office in Singapore following the promotion.Its production at the Liverpool plant will start processing crude oil delivered from its PNG plantations. “Progress at our UK palm oil refinery in Liverpool has been good and the plant is due to commence operations within the next month,” the company said.The group has already negotiated a series of multi-million pound supply deals with clients such as United Biscuits and cereals maker Jordans.Regular shipments from plantations in PNG will supply the Liverpool plant.

EON Cap's board to present proposal to shareholders

KUALA LUMPUR: EON Capital's board of directors will present a proposal by Hong Leong Bank to acquire the former's assets and liabilities with RM5.06 billion cash or RM7.30 per share in an EGM soon.
MIMB Investment Bank said in an announcement Friday on behalf of the board that a resolution would be tabled at the EGM on the proposal as well as the proposed distribution of the cash proceeds arising from the disposal to the shareholders.
The investment bank said this was being done after taking into consideration Credit Suisse Securities (M) Sdn Bhd's opinion that the offer was not fair from a financial perspective.
Credit Suisse was appointed as the independent adviser for the deal.
MIMB also said EON Capital's board member Ng Wing Fai's views would also be included in a circular to shareholders for the upcoming EGM. Ng, whose Primus Pacific Partners (HK) Ltd held a 20.2% stake in EON Capital, has expressed disagreement with the board over the offer.
MIMB said after taking into consideration Credit Suisse's opinion, the advice of the international adviser Goldman Sachs and all relevant aspects of the offer, the board has resolved that the proposed disposal was in the best interest of the bank.
MIMB said should the acquisition be passed, the cash distribution would be through a special dividend estimated to be about RM3.30 billion based on EON Capital's audited financial statements as at December 31, 2009 and, a capital reduction exercise amounting to RM1.76 billion.

Tengdui appointed to Petromin board

PAPUA New Guinean accountant Richard Tengdui has been appointed to the board of Petromin PNG Holdings Ltd.He has been appointed a non-executive director for a three -year term that took effect last May 5.Tengdui was nominated for appointment by Petromin board chairman Brown Bai, based on his performance as independent external member nominated by Certified Practicing Accountants of PNG to the Petromin audit and compliance board sub-committee. In welcoming Tengdui to the board, Bai said Tengdui’s wealth of experience in accounting, auditing and taxation would greatly enhance the boards ability to make balanced investment and management decisions.Tengdui’s appointment was made early this month by Petromin trustee shareholder Prime Minister Michael Somare.

NGE allots A$47m for drilling

AUSTRALIA’s New Guinea Energy (NGE) Ltd and Canada’s Talisman Niugini Ltd will now commit more than A$47 million (K118 million) to its drilling and seismic testing activities in Western province. The testing and drilling activities are on four petroleum prospecting licence (PPL) areas PPL266 and 267 – 100% NGE owned; and 268 and 269 - in shared ownership with Talisman (50-85% NGE and 15-50% Talisman).Michael Arnett, executive chairman of NGE, said last Friday a first well was in sight and that they were now mobilising the drilling programme on PPL 267- Panakawa.He said this during the sixth annual general meeting (AGM) in Port Moresby last Friday.NGE now has A$25 million (K63 million) available, of which about 40% will go to the testing and drilling of four PPL areas (together with Talisman) and also to fund other immediate activities. Last month, NGE executed a drilling contract with Australian Drilling Services Ltd to secure their Kremco ‘K 650” rig (Rig 6) for the drilling program on Panakawa prospect.Arnett said subject to timely completion of obligations by third parties, the obtaining of necessary PNG government approvals and other technical and environmental issues were expected early to middle of next month.

Shell: Bullish LNG growth

PERTH: Worldwide demand for liquefied natural gas (LNG) will almost double to between 350 million tonnes per annum (mtpa) and 400 mtpa by 2020 compared with about 200 mpta currently, global energy giant Royal Dutch Shell says.Queensland’s booming coal seam gas-to-LNG sector was entering a new phase of growth and investment, and would play a major role in meeting rising demand for the fuel, Shell senior executive Anne Pickard said.Pickard, who is executive vice-president of Shell Upstream International’s Australian arm, said the energy giant remained hopeful that it would complete its proposed multi-billion-dollar joint takeover of Brisbane-based CSG producer Arrow Energy that was being undertaken with PetroChina Ltd.She also said Australia represented the key plank in Shell’s push to boost its LNG output.“Globally, we aim to add around 15mtpa of LNG capacity by 2020, and much of that effort and investment will be focused in Australia, making us one of the biggest investors in the country,” Pickard told the Australian Petroleum Production & exploration Association Ltd conference in Brisbane yesterday.“If the (Arrow) transaction is completed, we will be in a position, through Arrow, to establish an integrated CSG-LNG operation.“It will bring together Arrow’s expertise as a leading coal seam gas operator, Shell’s LNG know-how, and PetroChina’s access to the Chinese energy market.“We are excited about this project (Arrow’s Curtis Island LNG project at Gladstone) and hope the joint acquisition is successful.” – AAP

WNB oil palm growers badly hurt by rains

THE oil palm sector in West New Britain province has been hard hit by continuous rains since last October.Destructions have been caused to road and bridge infrastructure which affected small oil palm growers within the Bialla district.Small growers were unable to sell fresh fruit bunch (FFB) and were deprived of income to pay for various needs including school fees.Between January and March this year, some growers especially from Silali, Tiauru and some parts of central Nakanai areas lost their palm produce as road networks were destroyed, thus preventing the delivery of FFB to the Hargy mill in Bialla.Temporary civil works carried out on roads recently was a relief to the affected growers as fruit trucks had gradually accessed the growers’ harvests for the month of April.Small oil palm growers were relieved of their anxieties when FFB delivery trucks picked up their produce which enabled them to earn hard cash.

PNGWIB welcomes Chinese investors

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By PATRICK TALU
SMALL to medium scale business entrepreneurs in Papua New Guinea have invited and welcomed Chinese entrepreneurs to invest in PNG.President of PNG Women in Business (PNGWIB) Janet Sape welcomed delegates of various small to medium scale entrepreneurs led by Shanghai Federation of Industry and Commerce (SFIC), who are in the country looking for business opportunities.Sape said PNG was a place of opportunities and they would find it suitable and conducive for investment.She said such investments in partnership with local entrepreneurs would enhance stronger business cooperation between Shanghai and PNG encouraging growth and sustainability of local business.Sape said she would be taking four delegates from PNGWIB to attend the Shanghai Expo 2010 and seek more opportunities for women.A local business-woman, who is involved in catering services, said it had been very difficult doing business in PNG, especially when seeking loans at the commercial banks.“If the Chinese are interested in PNG, it will give us the opportunity to go into partnership,” the women, who wished to remain unidentified, told The National yesterday. Many small business owners turned out in numbers and met with the delegates and exchanged information at a seminar yesterday at Airways Hotel.The aim of the seminar was to enhance the understanding and cooperation with different PNG chambers and relevant organisations in their endeavour to promote the external cooperation for Shanghai Small to Medium Entrepreneurs.The companies’ interests include scrap tyre and waste rubber processing line, investigation of the urban infrastructure market, real estate and construction and technology.While most of the visiting delegates are here to discuss potential joint venture deals in their specialised business activities, others are here to seek trade and investment opportunities.

Aussies move in to secure space in LNG

WHILE Papua New Guineans are complaining about their inability to win contracts from the PNG liquified natural gas (LNG) project, north Queensland businesses are moving into high gears organising themselves to get a slice of the action.President of Port Moresby Chamber of Commence (CC) David Conn was in Cairns last week to brief businesses there on how to get involved in the PNG activities while the Townsville CC organised a breakfast meeting with the Australia PNG Business council to discuss business opportunities in PNG.Conn attended a meeting in Cairns on April 21, where about 170 businesses were represented. The theme of the forum was; “Partnering with PNG” by people wanting to export their services and expertise to the gas resources development projects.The “Partnering with PNG” forum, co-hosted by Advance Cairns and the Cairns CC, will feature a panel session and key guest presenters offering extensive and current business experience working with, and in PNG.Conn provided a “warts and all” advice on what it takes to be involved in the PNG market, while Carl Valentine, a Port Moresby partner with PricewaterhouseCoopers with significant experience in the PNG market, gave attendees information on technicalities of doing business with PNG.

Indon ‘money guru’ to head World Bank

WORLD Bank (WB) president Robert B. Zoellick has announced the appointment of Sri Mulyani Indrawati as managing director of the World Bank Group.As Indonesia’s minister for finance since 2005, Indrawati has guided economic policy for one of the largest countries in Southeast Asia, and one of the biggest states in the world, navigating successfully in the midst of the global economic crisis, implementing key reforms, and earning the respect of her peers across the world.“I am delighted to announce the appointment of Sri Mulyani Indrawati. She has been an outstanding Finance minister with in-depth knowledge of both development issues and the role of the World Bank Group,” Zoellick said .“As a member of the senior team, she will play a key role in helping to lead the bank as we move to strengthen client support, implement our reform programmes, and anticipate future challenges.”Prior to her position as finance minister, Indrawati served as state minister and chair of the Indonesian national development planning agency.Between 2008 and 2009, she served as coordinating minister of economic affairs.From 2002 to 2004, she was an executive director on the board of the International Monetary Fund.She has been on the faculty of the University of Indonesia and was a visiting professor at the Andrew Young School of Public Policy at Georgia State University.Accepting the appointment Indrawati said: “It is a great honour for me and also for my country to have this opportunity to contribute to the very important mission of the bank in changing the world.”

Landowner company into joint venture

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By PATRICK TALU
LOCAL landowner company (lanco) Massco PNG Limited (MPNGL), South Korean-based firm, CoDA PNG Ltd, and associates company Seohee Construction Ltd (CPNGL), have entered into a joint venture agreement to participate as major contractors in the PNG LNG project.The MoU was signed by MPNGL executive chairman Jerome Kairi, CPNGL chief executive Joshua Chi and Kim Young-kim of Seohee Ltd in Port Moresby yesterday, witnessed by board of directors of MPNGL and CPNGL representatives.CPNGL and Seohee are amongst the top three planning and design architecture and property development company in the South Korea with branches in the Britain and the United States.MPNGL is the umbrella lanco of the Gobe Field Engineering (GFE), from Gobe main PDL 4 in Southern Highlands province.During the signing of the joint venture agreement between the three companies, Kairi said: “The occasion signifying our desires, hopes and aspirations to meaningfully participate directly in the engineering procurement contractors (EPC) construction and not as subcontractors to EPC.“It also voices out our capacity and capabilities to meet the projects contracts schedule,” Kairi said.He added that the joint venture company was for the purpose of long term sustainability and maximising benefits and capacity building for lancos.Kairi said the joint venture was not duplicating the GFE functions but a commercial venture with GFE’s blessing.“We want to prove that we can be competitive with major contractors.”During an interview with Chi as to what specific project CPNGL was looking at the LNG project, he said: “As a specialist planning design and architecture, we are looking at all aspect so long as our services are required by EPC.“We are also looking at project managements and property development.”The signing had paved the way for equipment mobilisations from South Korea into the project construction sites before June in order to kick start the project.

Saudi company wins contract

SAUDI Arabia-based Red Sea Housing Services (RSH), the world’s leading provider of remote site housing, has been awarded US$127.9 million ( K352 million) contract by Chiyoda-JC Joint Venture (CJCV), to build housing facility for LNG project.The contract is specifically to build liquefaction and storage facilities and other housing facilities at Portion 152 near Papa and Lealea areas in Central province.ExxonMobil has awarded the engineering contract to CJCV, a company specialised in multi-disciplinary and construction of major housing facilities to cater for Esso Highlands housing facilities.CJCV then sub-contracted RSH to build the do the work.In a statement released by RSH, construction is expected to be completed next November and will accommodate the LNG project workforce.Chairman of RSH Dr Majid Al Kassabi said: “We are pleased to have this opportunity to build a high-quality housing facility for the PNG gas project.“This reflects our reputed expertise and commitment to provide the best and durable housing solutions for ExxonMobil Corporation”.Don Summer, managing director of ASH, said awarding the new contract to RSH was based on the company’s reputation and craftsmanship spread out in different countries of the world including Africa.Meanwhile, a local contractor who did not want to be named said it was a slap in the face for local contractor like him.“It undermines the capabilities of local business,” he said.

NBPOL completes CTP PNG take-over

THE New Britain Palm Oil Limited (NBPOL), a large scale integrated industrial producer of sustainable palm oil, has completed its acquisition of the 80% of shares in CTP (PNG) Limited, according to a statement in its website.Two months ago, the company announced the proposed acquisition of CTP PNG for a considered price of US$175 million (about K482 million) payable in cash, plus an additional consideration in relation to stocks and capital expenditure.NBPOL said the completion of the CTP PNG acquisition was conditional upon entering into a US$200 million (about K550 million) 12-month facility with Standard Chartered Bank and the ANZ Banking Group Ltd and approval by ordinary resolution of the company’s shareholders being obtained at the general meeting on April 15.NBPOL said these had been satisfied and the acquisition was now complete.The acquisition includes the addition of more than 25,000ha of established and producing oil palm plantations, and five mills to the company which increases NBPOL’s established plantation area by almost 50% and is comprised of estates close to its current centre of operations.NBPOL chairman Antonio Monteiro De Castro said: “The board was delighted to have completed this transformational acquisition, which is strategically and geographically an excellent fit.“The directors of NBPOL believe that the acquisition not only represents compelling value but also has the potential to be earnings enhancing for the company.“NBPOL will benefit from greatly increased production, economies of scale, operational efficiencies, and a larger potential source of fully segregated, palm oil, available direct from plantation to consumer,” he said.

Lae’s Voco Point opens new hardware

By GABRIEL LAHOC
THE Voco Point seafront in Lae, Morobe is experiencing a renaissance of business activities with the recently constructed Voco Point Hardware (VPH) officially opened last Saturday at a ceremony witnessed by members of the public, clients and customers.Operating as a subsidiary of Mukito Suppliers Ltd, VPH is a 100% nationally-owned hardware shop specialising in general, industrial, electrical and agricultural supplies.From humble beginnings in Goroka, VPH brings competition to other hardware suppliers in Lae, with a strong faith to provide the best service and prices to customers.The hardware shop may be small compared to other established hardware shops, however, the management is of the firm view that it is a very big achievement in terms of ownership and investment by any Papua New Guineans.“It’s a big achievement for all small nationally-owned businesses, as most times, these businesses have been overlooked by bigger foreign businesses,” proprietor Allan Mandi said.He started his business in 2004, from a start-up capital of K900, which he received as finish pay from another hardware shop.VPH is located at the junction of Frigate Street and Seagull Street, opposite Trends Beauty Saloon and The Nationals Lae bureau office, and has current staff strength of 20 working under manager Charlie Lapila.VPH promises very-competitive prices and services, which includes special deliveries, with major clients from the rural districts services in Eastern Highlands such as Department of Agriculture and Livestock and the University of Goroka.

EC to prepare businesses for opportunities in LNG

By SHEILA LASIBORI
PORT Moresby-based Enterprise Centre (EC) has been contracted to prepare PNG businesses for business opportunities in the PNG liquefied natural gas (LNG) project. The EC within the PNG Institute of Banking and Business Management (PNGIBBM) at the ToRobert business training centre at Konedobu is under a five-year contract with project operator Esso Highlands Ltd to prepare the vying business organisations to meet global business standards.And EC will not be awarding contracts for the PNG LNG project but assist businesses prepare themselves for opportunities in the project, PNGIBBM executive director Ray Clark said.The contract agreement was signed between the parties on Jan 19 this year, Mr Clark said.“Our job is to prepare businesses in the best way we can. We do not decide on the selection of businesses.“We facilitate communication between domestic businesses, suppliers, contractors and subcontractors.“In effect, we are a country notice board,” Mr Clark said, after several questions on EC’s business database it created recently to assist business orgnisations that needed its help to meet business requirements.He said EC was maintaining a PNG Supplier Database.Mr Clark also said to date, there was no business development centre in the country to assist businesses to be viable to reach greater heights in their operations.

Oil Search to prove contractible reserves

THE two largely independent core gas development streams for Oil Search Ltd is the dedicated fields for the PNG liquefied natural gas (LNG) project and other fields and exploration.According to Oil Search (OSL) managing director Peter Botten, the objective is to prove up enough proven contractible reserves to underwrite trains three and four in the gas project.For the PNG LNG dedicated fields in the material core reserves, there is already proven (1P) 300 million barrels of oil equivalent (mmboe) – all sold. Then the proven and probable (2P) 500mmboe (OSL share).“Focus on moving 2P into 1P contractible category through field development optimisation and further appraisal.”Then in the other fields and exploration, existing proven and portable resources (2C) of 281mmboe (OSL share) yet to be commercialised.There are programmes to appraise these discoveries and explore for new gas underway, while developing material portfolio ex PNG LNG.

Local companies fear missing out on LNG project

By PATRICK TALU
LOCAL businesses and landowner companies (lancos) are concerned they are most likely to miss out on opportunities to participate in the PNG liquefied natural gas (LNG) as sub-contractors.Several landowner companies and local business representatives said the stringent criteria used by the engineering procurement construction (ECP) contractors for various phases of the LNG projects would put them on the losing end.The representatives raised their concerns during a workshop conducted by LNG Enterprise Centre to facilitate communication between national suppliers, contractors and subcontractors for the Esso Highlands operated LNG project in Port Moresby.Philo Lala, a representative from a landowner company along pipeline areas from Kairuku where the proposed LNG pipeline would run said: “Stringent criteria that the ECP contractors have will make us losers because we do not have the financial capacity especially for lancos as required.”Among those criteria, financial and capacity and track record of successful management and locally registered companies are the main factors that would determine the awarding of contracts.Ms Lala said: “Some of the lancos have been just registered in order to participate in the LNG project and how does ECP expected us to have the full financial capacity?“We have financial arrangements with lenders in place as well as partnership with existing businesses hoping that we would be awarded sub-contracts.She stressed that if such criteria were used, she feared they might be overlooked for contracts they should be have qualified for.