Tuesday, April 27, 2010
OSL posts 5% gain
OIL Search Limited (OSL), PNG’s oil and gas producer yesterday posted a 5% gain in first-quarter output, while its sales revenue more than doubled on the back of higher oil and gas prices.The Australian-listed firm yesterday said output for the March quarter was two million barrels of oil equivalent (boe), compared with 1.90 million boe a year ago, thanks to new production wells drilled at mature oil fields.Revenue for the quarter jumped to A$133.8 million (about K366 million) from A$68.6 million (K187 million) last year.OSL said as with all other major Australian oil and gas firms, the company was realigning its business to focus on the burgeoning liquefied natural gas (LNG) sector.OSL, a partner with ExxonMobil Corp in the PNG LNG export project that was sanctioned last year, said the project has started to mobilise key engineers and contractors into the country and has begun early construction activities at the plant site.The A$15 billion (K41 billion) LNG project will produce 6.6 million tonnes per year of LNG via two production trains when it comes online in 2014.The firm did not give an update to its 2010 production guidance, which it has earlier estimated to fall 10% from last to be between 7.2-7.4 million boe.Most investors are looking beyond OSL’s short term performance figures and focusing on progress at the PNG LNG project, which is OSL’s first foray into the business.
20 foreign firms vie for LNG sub-contracts
AT LEAST 20 international companies are already vying to be subcontractors in the plant construction of the PNG liquefied natural gas (LNG) project.Although this information has not gone down well with PNG companies and those based in the country, major contractor Chiyoda-JGC Joint Venture (CJJV) says they have to adhere to the timeline pertaining to the construction phase of the project.Chiyoda’s external affairs director Takumi Hoshino said they were yet to award contracts to some of the international companies that had started talks with them and no company had been awarded contract to date.“We have to construct accomodation very fast to cater for mobilisation and to cater for 8,000 to 9,000 workers,” he said in relation to the camp facility proposed for Portion 152 on the outskirts of nation’s capital.“The subcontractors (have) informed that they will bring into PNG pre-fabricated goods for construction,” Takumi said, much to the disappointment of the representatives of PNG companies that attended the four-day workshop between local businesses and engineering, procurement and construction (EPC) contractors last week.This was at the Enterprise Centre of the Institute of Banking and Business Management (IBBM) at Konedobu, Port Moresby.Some of the attendees were particularly concerned that the subcontract business opportunities during the construction phase may be given to international companies.“What opportunity have you given to PNG companies to participate in the LNG project?” one attendee asked.In response, Mr Takumi said as main contractor CJJV (EPC3) was ready to maximise in giving opportunities to companies to be subcontractors.“There has to be quality control and experience. Then they will require a lot of work to do here so they will subcontract here (PNG),” he said of the vying international subcontractors.A response which got a participant to challenge ExxonMobil to put in place a monitoring system to make sure such contracting of PNG companies by international subcontractors did take place.“I do not think you can do everything because you have no experience … you never constructed a LNG plant before,” Mr Takumi told the gathering.The plant construction is scheduled to start in August/September following the site preparation set to start in June and the LNG training facility at Port Moresby Technical College will take care of training for local workers.He said the engineering and procurement (EP) work was currently being done by about 100 engineers in Yokohama.Mr Takumi also revealed that landowner company (lanco) Laba Holdings Ltd would engage in labour recruitment of most of the 2,000-2,500 local workers for the construction. It is also contracted to provide security.And CJJV will recruit 200-300 local staff for its 600 total staff ceiling for its main to be established at portion 152.“We have to engage with a local company. All recruitment will be done by the representative lanco,” he said adding CJJV had consulted Department of Labour and has a manager in charge of recruitment.Other opportunities available to lancos are: camp maintenance, camp catering, and transportation of workers from camps to job sites.
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.
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.
Monday, April 26, 2010
Economy good: WB
WORLD Bank (WB) has delivered another positive outlook for PNG, highlighting the nation’s economic performance throughout the past two years and projecting a strong picture for its future prospects.The details and other information were delivered in the bank’s latest edition of its East Asia and Pacific Update, a six-monthly report into the region’s economic and social health.Despite operating against the external pressures resulting from the worst global recession in more than half a century, WB noted that PNG had recorded sound economic growth of 4.5% last year, compared to 6.7% in 2008.The WB reported that this strong performance was attributed in part to prudent fiscal policies and Government stimulus spending using payments from mineral resources saved over the commodity boom years.In moving forward, the bank has forecast strong opportunities for continued growth in future years particularly as developments of the groundbreaking liquefied natural gas (LNG) project continues to move ahead successfully.The historic project has the capacity to generate thousands of employment opportunities, inject billions of kina back into the local economy and stimulate significant follow on economic growth and development across PNG, and the wider Pacific region, throughout its 30-year lifespan.“Estimates suggest that the project will yield a 50 million barrels oil equivalent of natural gas and lead to US$3 billion (K8.2 billion) in average annual export receipts starting in 2013-14.By one consortium partner’s estimates, the project could turn PNG into the second largest LNG producer in Southeast Asia, after Malaysia and past Indonesia, by 2017.“Growth is projected to rebound strongly this year, as the construction of the LNG facility begins and the project directly and indirectly stimulates domestic demand.“Real GDP growth could increase by 0.8 percentage points a year during the construction phase alone and then perhaps by 15-25% per year during the 30-year life of the pro ject, doubling the country’s GDP in three to five years after the project becomes operational,” the Bank said.The LNG project and a number of other initiatives continue to instil renewed confidence amongst investors and consumers.
Sunday, April 25, 2010
BPNG to monitor economic activity in line with LNG project
THE Central Bank will be closely monitoring the increased economic activities in line with the start of the construction phase of the PNG LNG project.Central Bank governor Loi Bakani in the economic bulleting, for the December quarter last year, said this would be in line with the bank’s projection of inflation at 8% for this year.In the bulleting released on Tuesday, Mr Bakani said: “The upside risks to inflation could come from a weaker kina, increased economic activity and, thus, increased domestic demandpressures associated with the commencement of construction for the LNG project; high imported inflation, increased wage pressures, and excessive Government spending.“The Central Bank will closely monitor these developments and adjust its monetary policy stance wherenecessary to contain inflation,” he said.According to the bulleting an easing in the annual headline inflation from 10.2% in March quarter to 5.3% in the September quarter last year prompted BPNG to ease its monetary policy for December.The policy signaling interest rate, the kina facility rate (KFR) was reduced by 1.0% to 7.0%.Since then, KFR has been kept unchanged to this month in view of inflationary pressures.
Tuesday, April 20, 2010
Petromin,MISC join forces
MALAYSIA International Shipping Corporation (MISC) Berhad, one of the world’s renowned liquefied natural gas (LNG) transporters has entered into a joint venture (JV) agreement with Petromin PNG Shipping Limited a wholly-owned subsidiary of Petromin PNG Holdings Limited.MISC is a subsidy of Petronas, the Malaysian government owned oil and gas company.Petromin was created to hold the State’s oil, gas and mineral assets and is entrusted to maximise indigenous ownership and revenue gains in the mineral and petroleum sectors of Papua New Guinea.MISC in a statement on its website said it was selected by Petromin as its JV partner after going through a competitive bidding process where one other international LNG shipping company also participated.The purpose of the agreement is to incorporate a joint venture company (JVC) to provide LNG transportation solutions for LNG projects in PNG and to secure shipping contracts to support other general shipping requirements in the country.The agreement was signed last week at the Malaysian Petroleum Club in Kuala Lumpur by MISC’s Amir Hamzah Azizan, president and chief executive officer, while Joshua Kalinoe, Petromin managing director, signed for the PNG Government’s mineral and oil company.The ceremony was witnessed by Petromin chairman Brown Bai.The JVC, Western Pacific Shipping Ltd, which is to be incorporated in Bermuda Islands, will be 60% owned by MISC, with Petromin PNG Shipping Limited holding the remaining 40%.The JV establishment is also aimed at contributing to the export and import activities of PNG by providing world-class shipping capabilities, which eventually will be owned by Papua New Guineans, and modelled along MISC’s 40 years of extensive shipping experience.As one of the leading players in LNG shipping, with a total of 29 wholly owned and operated LNG carriers, this joint venture signals MISC’s entry into PNG’s oil and gas transportation industry. Through the joint venture, MISC will not only be expanding its energy related transportation business but will also contribute to Papua New Guinea’s capacity building requirements in the shipping business.The joint venture will also enhance the growth prospects of both companies in the LNG industry, especially in the Asia Pacific region. With the development of two and possibly three LNG projects, the Papua New Guinea LNG industry is estimated to grow to 14.6 million tonnes per annum by 2015.
Companies urged to improve to meet LNG requirements
By SHEILA LASIBORI
PAPUA New Guinea companies need to step up their standards to the business requirements associated with the PNG liquefied natural gas (LNG) project.This was because most PNG companies, especially landowner (lanco) companies, lack most or some of the eight basic requirements of a viable business entity, Maudi Banks-Bennett, the manager for the Enterprise Centre at the Institute of Banking and Business Management (IBBM), said.According to Ms Banks-Bennett the Port Moresby-based IBBM will assist project developer ExxonMobil and project operator Esso Highlands Ltd assess the viability of business organisations as they vie to sell their goods and services in the PNG LNG project through spin-off business activities.She was particularly concerned that some of the landowner companies that had sought information and assistance from IBBM lacked some or most of the standard required criteria.The eight points are: organisation and governance; business management; finance; personnel; safety, health and environment; quality; equipment; and citizenship and reputation. “If you want to succeed in business, this is the way for you. Papua New Guineans have to step up to the mark and perform,” she said, adding the normal process was that companies that approached the centre were included on a database and assessed along the criteria also upon consultation with the contractors and subcontractors.“We assess them for corporate governance, finance, human resource, planning and management, quality control, occupational health and safety,” she said shortly after her presentation on the role of IBBM in the LNG project through its association with project developers and contracted companies.She also outlined the business qualities that business entities should possess in order to be viable.This was during the workshop between local businesses and engineering, procurement and construction (EPC) contractors which started yesterday and will end on Friday.More than 100 participants from organisations ranging from engineering and construction companies, information technology, electrical companies, travel agents, wholesalers and distributors of heavy machinery and equipment aimed for such intense projects among others, and people claiming to represent lancos along the impacted areas especially in the Southern Highlands province.Ms Banks-Bennett said the workshop was for the centre to disseminate information on how the PNG-based companies could prepare themselves to meet all the necessary criteria to be able to venture in the project.
PAPUA New Guinea companies need to step up their standards to the business requirements associated with the PNG liquefied natural gas (LNG) project.This was because most PNG companies, especially landowner (lanco) companies, lack most or some of the eight basic requirements of a viable business entity, Maudi Banks-Bennett, the manager for the Enterprise Centre at the Institute of Banking and Business Management (IBBM), said.According to Ms Banks-Bennett the Port Moresby-based IBBM will assist project developer ExxonMobil and project operator Esso Highlands Ltd assess the viability of business organisations as they vie to sell their goods and services in the PNG LNG project through spin-off business activities.She was particularly concerned that some of the landowner companies that had sought information and assistance from IBBM lacked some or most of the standard required criteria.The eight points are: organisation and governance; business management; finance; personnel; safety, health and environment; quality; equipment; and citizenship and reputation. “If you want to succeed in business, this is the way for you. Papua New Guineans have to step up to the mark and perform,” she said, adding the normal process was that companies that approached the centre were included on a database and assessed along the criteria also upon consultation with the contractors and subcontractors.“We assess them for corporate governance, finance, human resource, planning and management, quality control, occupational health and safety,” she said shortly after her presentation on the role of IBBM in the LNG project through its association with project developers and contracted companies.She also outlined the business qualities that business entities should possess in order to be viable.This was during the workshop between local businesses and engineering, procurement and construction (EPC) contractors which started yesterday and will end on Friday.More than 100 participants from organisations ranging from engineering and construction companies, information technology, electrical companies, travel agents, wholesalers and distributors of heavy machinery and equipment aimed for such intense projects among others, and people claiming to represent lancos along the impacted areas especially in the Southern Highlands province.Ms Banks-Bennett said the workshop was for the centre to disseminate information on how the PNG-based companies could prepare themselves to meet all the necessary criteria to be able to venture in the project.
SMEC to carry out consultancy work
THE involvement of Snowy Mountain Engineering Consultants (SMEC) by the Hides Gas Special Purpose Authority (HGSPA) to carry out technical engineering consultancy on infrastructure projects in Hides is intended to bring tangible development to the relevant rural communities.Last month, a MoA was signed between the landowner group and SMEC that would ensure K30 million, when released by the Government under licenced-based benefits sharing agreement would cater for infrastructure development such as roads, bridges schools and hospitals.During the signing, it was highlighted that the agreement would pave the way for investment opportunities for rural communities in the Hides area by way of planning and infrastructure development through the benefits from the Hides Gas SPA and the PNG LNG projects.The MoA was signed in Port Moresby by SMEC country manager Richard Farrell and Hides Gas SPA chairman Lemson Mapiria.The HGSPA is an entity established by virtue of the National Executive Council decision in 2004 under the Local Level Government Act of Papua New Guinea.The MoA would then be presented by the HGSPA to the respective Government agencies which include the departments of Petroleum and Energy, National Planning and District development and Treasury.From the submission made to the Government department’s funds would be made available before a feasibility study is underway with the consultancy by SMEC.
InterOil signs joint venture with Mitsui
INTEROIL Corporation has signed a joint venture agreement with Japanese oil company, Mitsui & Co Ltd to jointly operate and fund the preliminary works involved to develop a proposed condense striping facility at InterOil’s Elk and Antelope field in the Gulf province.In a statement last Thursday, InterOil announced that the preliminary work programme was for all the works required to take them through the Front End Engineering and Design (FEED) stage for the construction of a condensate stripping plant, to the point of final investment decision (FID).The project is proposed to be designed to process 400 million standard cubic feet per day (mmscf/day) of well head gas with an anticipated yield of approximately 9,000 barrels (bbls) of condensate per day.Dry gas will be re-injected into the reservoir for storage until the proposed LNG facility is constructed.The condensate will be barged to the InterOil refinery in Port Moresby for processing and sale.InterOil and Mitsui will each be responsible for half of the capital expenditure involved in the preliminary works and Mitsui will fund InterOil’s share.Standard conditions of the agreements include the completion of FEED, an EPC agreement, and the definitive agreements by Dec 31, necessary to reach FID.In the event that FID is not reached, InterOil will be required to refund the capital expenditure incurred to date within a specified period.InterOil said it was looking forward to a long and prosperous relationship with Mitsui, one of the largest energy conglomerates in Japan.
City realty prices to soar
By PATRICK TALU
THE real estate industry in Port Moresby is projected to boom with high rental and purchasing prices.A survey indicated that in light of the LNG project and economic growth, real estate prices are expected to escalate as of this year.Jonathan Gouy, an economic consultant to the National Government during the PNG Update seminar last week, said demand forces had been the factor behind the industry to an extent where ordinary tenants and buyers could not be able to afford.Mr Gouy said from the 340 commercial and residential properties that had been surveyed, it was found to be very expensive with the highest price for a property at K3.7 million in zone A which comprised of town, Paga Hill, Touaguba Hill, Konedobu, Ela Beach and 2-Mile Hill.To buy a house, apartment or unit at Zone A, an average price is K2.1 million and cheapest at K0.9 million.The average rental price for these areas is K200,000 per year, most expensive K520,000 and the cheapest is K42,000.Mr Gouy said under Zone B, areas around Gordon, Boroko, Korobosea, 6-Mile, Hohola, Waigani, Koki and Badili, an average price to buy a house is K720,000, most expensive at K3.8 million and cheapest at K160,000.The cheapest for rent is at K35,000 year while most expensive is K310,000.To buy a house around Zone C: Gerehu, Kila Kila, 7-Mile, 8-Mile, 9-Mile, Tokarara, Rainbow, Ensisi Valley and Morata, the most expensive is at K2.2 million while cheapest is at K110,000.To rent, the cheapest is at K10,000 year while the most expensive is at K85,000.Mr Goys said the high prices were due to high demands and low supply making ordinary people to fend for themselves at squatter settlements. Due to the high property prices, city dwellers are faced with homelessness, financial stress and upward pressure on prices of domestic goods and encourages property speculation, rather than productive investment and, at the same time, discourages investment by locals and foreignersHe said it needed considerable efforts from price regulators to control prices.
Last year good for superfunds
By PATRICK TALU
OPERATING against the challenges of the global economic crisis, PNG’s largest superannuation fund, Nambawan Super Limited (NSL), achieved strong results and growth last year with its most recent report announcing a solid profit of K191 million for the year after tax.Chief executive officer for Kina Securities Syd Yates yesterday said clearly the superannuation industry in PNG was continuing to develop strongly, despite recent turbulence on the global market, with the sector benefiting from improved regulation and increased economic maturity and political stability within the nation during the past decade.In making the announcement last month, NSL chairman Sir Nagora Bogan said the fund had achieved strong growth in its total assets, which increased by K210 million throughout the year to K2.83 billion.In addition, total membership of the NSL and its retirement savings accounts also grew strongly, totalling 113,546 at the year’s end.“By any measure, last year was a difficult year for business and investment.“The global financial crisis battered a wide range of industry sectors around the world, tightening the global flow of money and putting intense pressure on investment markets,” Sir Nagora said.“Against these very challenging conditions, the board is very pleased to report that the fund has delivered yet another solid result for our members.“The board’s prudent approach to managing members’ money has stood the fund in very good stead. This places the fund in a very strong position to take advantage of improvements in the various markets for the benefit of our members,” he said.Mr Yates said the announcement by NSL came just weeks after another of PNG’s super funds, the National Superannuation Fund Limited (Nasfund), also reported strong results with a net profit of K205.617 million for last year.“It is worth noting that these results have seen both NSL and Nasfund outperform many of the leading international superannuation funds throughout the past year.“Clearly, PNG’s burgeoning financial sector is continuing to play a vital role in the lives of all individuals as they seek to maximise their economic foundations, plan for major expenses and invest funds back into the domestic economy through development initiatives and infrastructure programmes.“Importantly, a strong and healthy financial industry will ensure that PNG can build a solid foundation for sustained economic growth and prosperity in the years to come,” Mr Yates said.He added that the country was continuing to see the benefits of improved industry regulation, now overseen by the Bank of Papua New Guinea, which has instilled strong consumer confidence in the financial market and subsequently allowed for increased growth and expansion of PNG’s financial institutions.Importantly this strong growth is a genuine reflection of the increased maturity throughout PNG to financial services, and to the benefits of responsible economic and fiscal management which have been a key feature of our nation in recent years.Clearly, Papua New Guineans at all levels are continuing to embrace the savings culture, with many now actively looking towards traditional methods of asset enhancement, be it superannuation or share market investment.
OPERATING against the challenges of the global economic crisis, PNG’s largest superannuation fund, Nambawan Super Limited (NSL), achieved strong results and growth last year with its most recent report announcing a solid profit of K191 million for the year after tax.Chief executive officer for Kina Securities Syd Yates yesterday said clearly the superannuation industry in PNG was continuing to develop strongly, despite recent turbulence on the global market, with the sector benefiting from improved regulation and increased economic maturity and political stability within the nation during the past decade.In making the announcement last month, NSL chairman Sir Nagora Bogan said the fund had achieved strong growth in its total assets, which increased by K210 million throughout the year to K2.83 billion.In addition, total membership of the NSL and its retirement savings accounts also grew strongly, totalling 113,546 at the year’s end.“By any measure, last year was a difficult year for business and investment.“The global financial crisis battered a wide range of industry sectors around the world, tightening the global flow of money and putting intense pressure on investment markets,” Sir Nagora said.“Against these very challenging conditions, the board is very pleased to report that the fund has delivered yet another solid result for our members.“The board’s prudent approach to managing members’ money has stood the fund in very good stead. This places the fund in a very strong position to take advantage of improvements in the various markets for the benefit of our members,” he said.Mr Yates said the announcement by NSL came just weeks after another of PNG’s super funds, the National Superannuation Fund Limited (Nasfund), also reported strong results with a net profit of K205.617 million for last year.“It is worth noting that these results have seen both NSL and Nasfund outperform many of the leading international superannuation funds throughout the past year.“Clearly, PNG’s burgeoning financial sector is continuing to play a vital role in the lives of all individuals as they seek to maximise their economic foundations, plan for major expenses and invest funds back into the domestic economy through development initiatives and infrastructure programmes.“Importantly, a strong and healthy financial industry will ensure that PNG can build a solid foundation for sustained economic growth and prosperity in the years to come,” Mr Yates said.He added that the country was continuing to see the benefits of improved industry regulation, now overseen by the Bank of Papua New Guinea, which has instilled strong consumer confidence in the financial market and subsequently allowed for increased growth and expansion of PNG’s financial institutions.Importantly this strong growth is a genuine reflection of the increased maturity throughout PNG to financial services, and to the benefits of responsible economic and fiscal management which have been a key feature of our nation in recent years.Clearly, Papua New Guineans at all levels are continuing to embrace the savings culture, with many now actively looking towards traditional methods of asset enhancement, be it superannuation or share market investment.
Participation vital in PNG LNG project
THE engagement and development of Papua New Guinea’s businesses is an important aspect of the PNG LNG project’s national content plan and the Oil and Gas Act.Insomuch, the establishment of the Enterprise Centre (EC) by Esso Highlands Ltd, the subsidiary of ExxonMobil-led LNG project in partnership with the PNG Institute of Banking and Business Management (IBBM) became realty when it opened the temporary EC centre in Port Moresby.Executive director of IBBM Ray Clark, when officiating at the opening, told bankers, officials of Esso Highlands and reporters that the establishment of EC is an important part of component of the PNG LNG project local business development programme.Mr Clark said the overall object of the programme was to ensure efficient communications with EPC contractor, sub-subcontractors, and the analysis of the gaps of PNG and to assist domestic business build their business skills.Amongst others, the EC primary functions is to build capacities of PNG business that seek in some form of business activities with the LNG project.Mr Clark said already landowners from the LNG affected LNG areas were enrolling at the institution for free with all cost met by Esso Highlands.He stressed that supplier developments involved the transfer of skills and increasing local suppliers capabilities to help them meet the global standard that were expected for contractors with the LNG project and other industries and such establishment would encourage local business to prosper.
Tuesday, April 13, 2010
PNG oil to account for 0.13% of regional demand
PAPUA New Guinea’s oil supply is projected to account for 0.13% of the Asia-Pacific regional oil demand by 2014, while providing 0.38% of supply, according to a new PNG Oil and Gas report from US-based BusinessWire Research and Markets.PNG’s share of gas consumption last year was an estimated 0.03%, while its share of production is put at 0.04%.By 2014, its share of gas consumption is forecasted to be 0.04%, with the country accounting for 3.69% of supply in the Asia-Pacific region.The report said there was indirect State involvement in the upstream oil and gas industry, as the Government was a minority owner of Oil Search and ExxonMobil, which are responsible for the country’s current oil and gas supply, as well as being a partner in the LNG project.
Friday, April 9, 2010
KAML posts K4.26m profit for 2009
THE nation’s first publicly listed investment company, Kina Asset Management Ltd (KAML), has posted a net profit after tax of K4.26 million for 2009.The company also increased its investment portfolio by K3.84 million, or 9.38%, from K40.89 million at the end of December 2008 to K44.72 million at the end of December 2009.This represented a significant turnaround for the company after recording a net loss of K4.14 million in its launch year, 2008, with the adversaries of the global financial crisis.In moving forward, chairman Sir Rabbie Namaliu said KAML was continuing its expansion strategy and looking at increasing its exposure to international markets including the United States and Asia.He said the board of KAML would continue to pursue a range of strategic investment opportunities with the aim of maximising long-term benefits for its shareholders.
Devt projects in PNG, NT, Qld opening jobs bonanza
By YEHIURA HRIEHWAZI in Brisbane
BILLIONS of dollars worth of development projects in PNG, Queensland and the Northern Territory of Australia, are opening up technical skills job-market bonanza for young Papua New Guineans.The projects are top on the agenda for discussions during the coming PNG-Australia business council forum in Townsville on May 16 - 18.Is PNG ready to benefit from the jobs that will become available when swags of gas, goal mines and mineral projects swing into construction?This is the questions that bothers Paul Nerau, PNG’s consul-general in Brisbane, Australia.There will be thousands of job opportunities in PNG’s two LNG projects, condensate stripping project in the Gulf province, Frieda, Wafi and Golpu mines and gas, iron ore and coal projects in Queensland and Northern Territory, he said.The enormity of the projects that are worth tens of billions of dollars are just mind-boggling, he said.Nerau said institutions like the PNG Sustainable Development Program (PNGSDP) should invest huge sums of money – tens of millions – into training of human resources to take advantage of the massive job market that is “at our door step.”“We must train up our young people to Australian standards so that they can work here in Queensland as well as in PNG projects and go anywhere in the world,” he told The National.He said it was a mockery for the people of Western province that PNGSDP only selected 12 students and sent them to Australia for training.“That’s not enough, it should send hundreds of them down for training every year. That money is for that purpose, it is for the development of Western province and their human resources,” he said.Nerau said this when commenting on the billions of dollars in project developments that were going into Northern Australia and PNG and the immense benefits that come with them for the two countries.Meanwhile, the general manager of Townsville Enterprise Ltd (TEL) Dr Lisa McDonald said investments into the two countries would be in the tens of billions of dollars.“Liquified natural gas projects in Papua New Guinea, Darwin and Gladstone, major coal projects in central Queensland, mining projects in the North West minerals province and infrastructure developments such as expansion of the Abbot Point coal export facility will create huge demand for skills, expertise and products,’’ Dr McDonald said.“Townsville companies can reap a huge bonanza, so it is important they put in the groundwork and place their skills and products on record.’’Dr McDonald said TEL had studied the PNG gas project, which would create work for many thousands of Papua New Guineans.
BILLIONS of dollars worth of development projects in PNG, Queensland and the Northern Territory of Australia, are opening up technical skills job-market bonanza for young Papua New Guineans.The projects are top on the agenda for discussions during the coming PNG-Australia business council forum in Townsville on May 16 - 18.Is PNG ready to benefit from the jobs that will become available when swags of gas, goal mines and mineral projects swing into construction?This is the questions that bothers Paul Nerau, PNG’s consul-general in Brisbane, Australia.There will be thousands of job opportunities in PNG’s two LNG projects, condensate stripping project in the Gulf province, Frieda, Wafi and Golpu mines and gas, iron ore and coal projects in Queensland and Northern Territory, he said.The enormity of the projects that are worth tens of billions of dollars are just mind-boggling, he said.Nerau said institutions like the PNG Sustainable Development Program (PNGSDP) should invest huge sums of money – tens of millions – into training of human resources to take advantage of the massive job market that is “at our door step.”“We must train up our young people to Australian standards so that they can work here in Queensland as well as in PNG projects and go anywhere in the world,” he told The National.He said it was a mockery for the people of Western province that PNGSDP only selected 12 students and sent them to Australia for training.“That’s not enough, it should send hundreds of them down for training every year. That money is for that purpose, it is for the development of Western province and their human resources,” he said.Nerau said this when commenting on the billions of dollars in project developments that were going into Northern Australia and PNG and the immense benefits that come with them for the two countries.Meanwhile, the general manager of Townsville Enterprise Ltd (TEL) Dr Lisa McDonald said investments into the two countries would be in the tens of billions of dollars.“Liquified natural gas projects in Papua New Guinea, Darwin and Gladstone, major coal projects in central Queensland, mining projects in the North West minerals province and infrastructure developments such as expansion of the Abbot Point coal export facility will create huge demand for skills, expertise and products,’’ Dr McDonald said.“Townsville companies can reap a huge bonanza, so it is important they put in the groundwork and place their skills and products on record.’’Dr McDonald said TEL had studied the PNG gas project, which would create work for many thousands of Papua New Guineans.
Wednesday, April 7, 2010
Hydropower important for S’wak: Taib
MIRI: Sarawak cannot afford to have its plans to tap its hydroelectric generation potential derailed by those who had no interest in seeing the people in the state enjoying a better life, Chief Minister Tan Sri Abdul Taib Mahmud said here Saturday.
Branding those who opposed the plans as “struggling on a narrow single line crusade,” he said the group had failed to look at the problem of developing Sarawak as a whole.
Taib, who is also state Resource Planning and Management Minister, said Sarawak needed to convert its rich water resource into an income-generating commodity to cope with the growing expenditure faced in implementing development projects in the state.
He said part of the power generated from the hydroelectric projects in the state would be used for the development of industries in the Sarawak Corridor of Renewable Energy (Score) that had been expected to create more employment opportunities in the state and enhance its economic position.
Sarawak plans to build 12 hydroelectric dams at Ulu Air, Metjawah, Belaga, Baleh, Belepeh, Lawas, Tutoh, Limbang, Baram, Murum and Linau rivers. The plan will also see an extension to the Batang Ai Dam. All these dams are in addition to the 2,400MW Bakun Dam which will push up the total power generating capacity in Sarawak to 7,000MW by 2020, an increase of more than 600 percent from the current capacity.
Taib also said water consumers would have to share the government's burden in providing clean water supply in the state.
Dismissing the notion that the government should not charge consumers for water supply, he said the task of bringing clean water to meet the people's needs involved expenditure.
"I don't believe any state government can give free (clean) water (supply), regardless of which party is in power," he added in an apparent reference to the attempt by the PKR-led Selangor government to supply free water for people in the state.
He had earlier launched the World Water Day celebration here. - Bernama
Branding those who opposed the plans as “struggling on a narrow single line crusade,” he said the group had failed to look at the problem of developing Sarawak as a whole.
Taib, who is also state Resource Planning and Management Minister, said Sarawak needed to convert its rich water resource into an income-generating commodity to cope with the growing expenditure faced in implementing development projects in the state.
He said part of the power generated from the hydroelectric projects in the state would be used for the development of industries in the Sarawak Corridor of Renewable Energy (Score) that had been expected to create more employment opportunities in the state and enhance its economic position.
Sarawak plans to build 12 hydroelectric dams at Ulu Air, Metjawah, Belaga, Baleh, Belepeh, Lawas, Tutoh, Limbang, Baram, Murum and Linau rivers. The plan will also see an extension to the Batang Ai Dam. All these dams are in addition to the 2,400MW Bakun Dam which will push up the total power generating capacity in Sarawak to 7,000MW by 2020, an increase of more than 600 percent from the current capacity.
Taib also said water consumers would have to share the government's burden in providing clean water supply in the state.
Dismissing the notion that the government should not charge consumers for water supply, he said the task of bringing clean water to meet the people's needs involved expenditure.
"I don't believe any state government can give free (clean) water (supply), regardless of which party is in power," he added in an apparent reference to the attempt by the PKR-led Selangor government to supply free water for people in the state.
He had earlier launched the World Water Day celebration here. - Bernama
Business and water – should we be concerned?
BUSINESS AGENDABy TAY KAY LUAN
MALAYSIANS who take water for granted are reminded once again during this current hot and dry season of the need to conserve and not to take this precious resource for granted.
Water as a resource has been one of the main drivers behind the rapid industry development and good standard of living. Water consumption is expected to double every two decades but rising affluence and wealth accumulation mean that people are now using on average six times more water than a century ago.
The most popular approaches to water issues include measures for greater efficiency, recycling and reuse, and employee education. – Reuters
Water sustainability is anything but clear.
In a rapidly changing world, there are now challenges of conserving what we have and overcoming the problems of water too contaminated to consume.
Although the planet’s surface is covered with water, less than 1.5% is freshwater which is safe for human consumption.
The Stockholm International Water Institute predicted by 2075, the number of people with chronic water shortages is estimated to be between 3 billion and 7 billion. The United Nations sees this as “one of the largest public health issues of our time.”
Business risks
Virtually every industrial activity requires water. The likes of manufacturing, power generation, food processing, agriculture, paper and drinks sectors are particularly water intensive. That’s why water issues are of serious concerns to business.
One immediate action is to determine the material water impacts and how they can be better managed.
One of the tools, Global Water Tool, released by the World Business Council for Sustainable Development, is to help companies map out the use the water for their businesses – also to assess risks relative to their supply chains.
A recent ACCA discussion paper on Water: The Next Carbon highlighted that companies, as major users of water, could play a key role in promoting better water management. Several business risks related to water were also highlighted in the paper.
First there is the physical risk arising through flooding, pollution, and droughts in regions where business operates. All businesses would be affected by the increased operating costs resulting from diminishing water supplies.
Companies would also see their capital expenditure rise as they are forced to find expensive new ways of treating and extracting water. Such financial risks are not healthy to the competitiveness of the industry.
There is also the regulatory risk – where licensing or privatisation of water can possibly affect the quality of water resources, and costs being passed on to consumers.
The probability of reputation damage presents reputation risk for the company. As access to water decreases, people will be looking for “scagegoats” – as evidenced whenever the supply of water resource is temporarily halted.
Companies which manage the operations and supply chains of the water resources will put their reputation at risks whenever, frequency of consumer complaints of poor delivery and services increases.
In the food and drink companies for example, wherever there is a limit on water supply, the immediate impact on prices is quite imminent.
Business responses
Agriculture, drinks and food processing are most vulnerable to water shortages.
The threat of water scarcity makes the credit crunch relatively lightweight! Once companies have a hold on their overall water use, the next phase is obviously to reduce it. The most popular approaches include measures for greater efficiency, recycling and reuse, and employee education.
SABMiller, the global brewery company, has identified water as one of its three “opportunities”’ for global leadership.
Its “5R” model of water responsibility includes changing attitudes and behaviours towards reducing water consumption across its business operations; reusing waste waters within facilities; recycling using new technologies within the plant; redistributing clean water to the community it operates; and influencing farmers to be more responsible on water use.
Swiss food giant Nestle has a more comprehensive policy towards water consumption. As part of its environment strategy the company is committed to continue reducing the amount of water used per kilogramme of food and drink produced, assuring its activities within its supply chain, respect water resources – both conserving and recycling.
Even Intel reclaims more than 3 billion gallons of water a year by collecting and recycling wastewater, solid waste and chemical waste.
Water consumption is high in IT manufacturing plants – clean water is a must for production. Indeed water availability is the lifeblood to business – and therefore critical. Water strategy as part of sustainable solutions is to apply water conservation and demand management measures.
This involves better management of water productivity and quality including working towards a zero effluent discharge.
There is also a need to engage with government and other stakeholders on public policy of water – the extent to how water use should be regulated, monitored and managed. It is important to recognise that water footprint once exceeds its capacity – it would be an almost impossible task to reverse.
As big consumers, businesses must share this responsibility more seriously as fundamentally it is a resource we can’t do without.
·The writer is ACCA director, Asean & Australasia. The full report ‘Water, the next carbon?’ is available at: http://www.accaglobal.com/documents/WaterFootprinting.pdf
MALAYSIANS who take water for granted are reminded once again during this current hot and dry season of the need to conserve and not to take this precious resource for granted.
Water as a resource has been one of the main drivers behind the rapid industry development and good standard of living. Water consumption is expected to double every two decades but rising affluence and wealth accumulation mean that people are now using on average six times more water than a century ago.
The most popular approaches to water issues include measures for greater efficiency, recycling and reuse, and employee education. – Reuters
Water sustainability is anything but clear.
In a rapidly changing world, there are now challenges of conserving what we have and overcoming the problems of water too contaminated to consume.
Although the planet’s surface is covered with water, less than 1.5% is freshwater which is safe for human consumption.
The Stockholm International Water Institute predicted by 2075, the number of people with chronic water shortages is estimated to be between 3 billion and 7 billion. The United Nations sees this as “one of the largest public health issues of our time.”
Business risks
Virtually every industrial activity requires water. The likes of manufacturing, power generation, food processing, agriculture, paper and drinks sectors are particularly water intensive. That’s why water issues are of serious concerns to business.
One immediate action is to determine the material water impacts and how they can be better managed.
One of the tools, Global Water Tool, released by the World Business Council for Sustainable Development, is to help companies map out the use the water for their businesses – also to assess risks relative to their supply chains.
A recent ACCA discussion paper on Water: The Next Carbon highlighted that companies, as major users of water, could play a key role in promoting better water management. Several business risks related to water were also highlighted in the paper.
First there is the physical risk arising through flooding, pollution, and droughts in regions where business operates. All businesses would be affected by the increased operating costs resulting from diminishing water supplies.
Companies would also see their capital expenditure rise as they are forced to find expensive new ways of treating and extracting water. Such financial risks are not healthy to the competitiveness of the industry.
There is also the regulatory risk – where licensing or privatisation of water can possibly affect the quality of water resources, and costs being passed on to consumers.
The probability of reputation damage presents reputation risk for the company. As access to water decreases, people will be looking for “scagegoats” – as evidenced whenever the supply of water resource is temporarily halted.
Companies which manage the operations and supply chains of the water resources will put their reputation at risks whenever, frequency of consumer complaints of poor delivery and services increases.
In the food and drink companies for example, wherever there is a limit on water supply, the immediate impact on prices is quite imminent.
Business responses
Agriculture, drinks and food processing are most vulnerable to water shortages.
The threat of water scarcity makes the credit crunch relatively lightweight! Once companies have a hold on their overall water use, the next phase is obviously to reduce it. The most popular approaches include measures for greater efficiency, recycling and reuse, and employee education.
SABMiller, the global brewery company, has identified water as one of its three “opportunities”’ for global leadership.
Its “5R” model of water responsibility includes changing attitudes and behaviours towards reducing water consumption across its business operations; reusing waste waters within facilities; recycling using new technologies within the plant; redistributing clean water to the community it operates; and influencing farmers to be more responsible on water use.
Swiss food giant Nestle has a more comprehensive policy towards water consumption. As part of its environment strategy the company is committed to continue reducing the amount of water used per kilogramme of food and drink produced, assuring its activities within its supply chain, respect water resources – both conserving and recycling.
Even Intel reclaims more than 3 billion gallons of water a year by collecting and recycling wastewater, solid waste and chemical waste.
Water consumption is high in IT manufacturing plants – clean water is a must for production. Indeed water availability is the lifeblood to business – and therefore critical. Water strategy as part of sustainable solutions is to apply water conservation and demand management measures.
This involves better management of water productivity and quality including working towards a zero effluent discharge.
There is also a need to engage with government and other stakeholders on public policy of water – the extent to how water use should be regulated, monitored and managed. It is important to recognise that water footprint once exceeds its capacity – it would be an almost impossible task to reverse.
As big consumers, businesses must share this responsibility more seriously as fundamentally it is a resource we can’t do without.
·The writer is ACCA director, Asean & Australasia. The full report ‘Water, the next carbon?’ is available at: http://www.accaglobal.com/documents/WaterFootprinting.pdf
New water policy in the pipeline
KUALA LUMPUR: A consulting services company has been engaged to formulate a National Water Resources Policy after reviewing the entire spectrum of water resources management in the country.
Ranhill Consulting Sdn Bhd had earlier been involved in a preliminary year-long study, costing RM6.8mil, on such a policy.
Deputy Natural Resources and Environment Minister Tan Sri Joseph Kurup, who made the announcement yesterday, said the study would focus on the need for standard and coordinated laws and regulations on the management and development of water resources.
Sales pitch: Singer Valve president Brian Blann briefing Raja Nazrin at the Asia Water 2010 exhibition in Kuala Lumpur Wednesday.
“In general, water resource management in this country is conducted differently, resulting in overlapping interests and conflicts among stakeholders when it comes to water development projects.
“Thus, this study will provide for more effective management of national water resources at the federal and state levels,” he said at the opening of the Asia Water Resource Management Seminar 2010.
He said the integrated approach had long been considered, and it was now time for the country to adopt more effective means of managing water resources.
Kurup said the Economic Planning Unit in the Prime Minister’s Department and the Department of Drainage Irrigation and had in 2008 completed a study on the effective implementation of integrated water resources.
There were nine best management practices in the report to enhance public awareness and capacity-building under various programmes on integrated water resources management, he said.
Ranhill Consulting Sdn Bhd had earlier been involved in a preliminary year-long study, costing RM6.8mil, on such a policy.
Deputy Natural Resources and Environment Minister Tan Sri Joseph Kurup, who made the announcement yesterday, said the study would focus on the need for standard and coordinated laws and regulations on the management and development of water resources.
Sales pitch: Singer Valve president Brian Blann briefing Raja Nazrin at the Asia Water 2010 exhibition in Kuala Lumpur Wednesday.
“In general, water resource management in this country is conducted differently, resulting in overlapping interests and conflicts among stakeholders when it comes to water development projects.
“Thus, this study will provide for more effective management of national water resources at the federal and state levels,” he said at the opening of the Asia Water Resource Management Seminar 2010.
He said the integrated approach had long been considered, and it was now time for the country to adopt more effective means of managing water resources.
Kurup said the Economic Planning Unit in the Prime Minister’s Department and the Department of Drainage Irrigation and had in 2008 completed a study on the effective implementation of integrated water resources.
There were nine best management practices in the report to enhance public awareness and capacity-building under various programmes on integrated water resources management, he said.
Fuel prices go up from today
Picture and story by PATRICK TALU
FUEL consumers nationwide will now dig deeper into their pockets as fuel prices for petrol, diesel and kerosene go up from today.Consumers will pay K3.33 per litre for petrol (from K3.16) and K2.75 per litre for diesel (from K2.53). Kerosene price rises from K2.42 to K2.60 per litre.Independent Consumer and Competition Commission (ICCC) acting chief executive officer Elastus Geroro blamed the rise in fuel prices on an increased crude oil price, and a fall by the kina against the US dollar on the exchange rate.High cost in transporting the products also contributed to the rise.He said on monthly average comparison, crude oil price rose significantly last month, increasing by 6.48% compared to a 2.7% reduction in February.Mr Geroro said as the global economy continued to show signs of recovery, crude oil prices began to rise in a region where China has a big influence on other Asia-Pacific economies.He stressed that change in the fuel prices were determined by global energy demand and, given that crude oil is a globally traded commodity, it was expected that the demand and supply determination in the major regions around the world against the US dollar would continue to cause price changes at any time in the future.He said with crude oil trading above US$70 per barrel for the third consecutive month, prices would continue to fluctuate in the coming months.He urged fuel suppliers and retailers not to charge consumers above the set prices.
FUEL consumers nationwide will now dig deeper into their pockets as fuel prices for petrol, diesel and kerosene go up from today.Consumers will pay K3.33 per litre for petrol (from K3.16) and K2.75 per litre for diesel (from K2.53). Kerosene price rises from K2.42 to K2.60 per litre.Independent Consumer and Competition Commission (ICCC) acting chief executive officer Elastus Geroro blamed the rise in fuel prices on an increased crude oil price, and a fall by the kina against the US dollar on the exchange rate.High cost in transporting the products also contributed to the rise.He said on monthly average comparison, crude oil price rose significantly last month, increasing by 6.48% compared to a 2.7% reduction in February.Mr Geroro said as the global economy continued to show signs of recovery, crude oil prices began to rise in a region where China has a big influence on other Asia-Pacific economies.He stressed that change in the fuel prices were determined by global energy demand and, given that crude oil is a globally traded commodity, it was expected that the demand and supply determination in the major regions around the world against the US dollar would continue to cause price changes at any time in the future.He said with crude oil trading above US$70 per barrel for the third consecutive month, prices would continue to fluctuate in the coming months.He urged fuel suppliers and retailers not to charge consumers above the set prices.
WB wants trust funds as part of Govt budget
By YEHIURA HRIEHWAZI in Brisbane
THE billions of kina stashed away in trust accounts should be integrated into the central Government’s consolidated revenue fund for better control and to help manage PNG’s volatility from external shocks, the World Bank has recommended.The bank said the economic growth would rebound this year because of the high demand from the LNG project as it swings into construction posing dangers for high inflation and deficit. It also raised concerns over the use of trust accounts on projects in villages with little or no accountability.In its review of the East Asia and Pacific economies released yesterday, the WB said PNG should consider reforming the trust accounts system and fully integrate it with the Government budget.It said PNG might consider establishing a non-renewable resource fund that, as a single savings and stabilisation fund, would be fully integrated with the macro framework, budgetary system, and spending priorities and that will seek to maximise the long-run development impact of the country’s resource wealth.“More importantly, the Government needs to strengthen its commitment to its medium-term fiscal strategy (MTFS).“The strategy aims to enhance the country’s macroeconomic stability by insulating the public budget from volatility in mineral revenues.“The Government had prudently adhered to elements of its fiscal strategy years before the formal adoption of the fiscal framework in 2008.“Windfall mineral revenues from the commodity boom years were saved in trust accounts that were built up to 14% of GDP by the end of 2008.”More expensive public external debt was paid down to 13.2% of GDP in 2008 from a high 54.2% of GDP in 2002, the bank said.“And, the non-mineral budget deficit was kept within bounds, until 2009 when the global financial crisis and the collapse in external demand warranted a fiscal response.“While a looser fiscal policy stance was broadly appropriate during the crisis, breaches in MTFS commitments may risk undermining fiscal credibility,” the bank said.Stimulus spending in 2009 far exceeded the limit imposed by the MTFS on expenditures out of accumulated mineral revenues, sending the non mineral budget deficit past its MTFS bounds to 11.4% of GDP, it noted.“Concerns have also been raised about the quality of the stimulus spending as some involved village level projects for which project and financial reporting have historically not been forthcoming.“Moreover, the 2010 budget surprisingly lacks any provision for using the accumulated mineral revenues for debt reduction this year.“As the implementation of the LNG project will make attaining macroeconomic stability more difficult, it has become imperative that authorities exert tighter fiscal discipline in the years ahead.“The 2010 budget still features a ramp-up in development spending that, when combined with sizable private investment for the LNG project, will be expansionary.“Growth is projected to rebound strongly this year, as the construction of the LNG facility begins and the project directly and indirectly stimulates domestic demand.“Estimates suggested that real GDP growth could increase by 0.8 percentage points a year during the construction phase alone and then perhaps by 15%-25% per year during the 30-year life of the project, doubling the country’s GDP in three to five years after the project becomes operational, the bank said.
THE billions of kina stashed away in trust accounts should be integrated into the central Government’s consolidated revenue fund for better control and to help manage PNG’s volatility from external shocks, the World Bank has recommended.The bank said the economic growth would rebound this year because of the high demand from the LNG project as it swings into construction posing dangers for high inflation and deficit. It also raised concerns over the use of trust accounts on projects in villages with little or no accountability.In its review of the East Asia and Pacific economies released yesterday, the WB said PNG should consider reforming the trust accounts system and fully integrate it with the Government budget.It said PNG might consider establishing a non-renewable resource fund that, as a single savings and stabilisation fund, would be fully integrated with the macro framework, budgetary system, and spending priorities and that will seek to maximise the long-run development impact of the country’s resource wealth.“More importantly, the Government needs to strengthen its commitment to its medium-term fiscal strategy (MTFS).“The strategy aims to enhance the country’s macroeconomic stability by insulating the public budget from volatility in mineral revenues.“The Government had prudently adhered to elements of its fiscal strategy years before the formal adoption of the fiscal framework in 2008.“Windfall mineral revenues from the commodity boom years were saved in trust accounts that were built up to 14% of GDP by the end of 2008.”More expensive public external debt was paid down to 13.2% of GDP in 2008 from a high 54.2% of GDP in 2002, the bank said.“And, the non-mineral budget deficit was kept within bounds, until 2009 when the global financial crisis and the collapse in external demand warranted a fiscal response.“While a looser fiscal policy stance was broadly appropriate during the crisis, breaches in MTFS commitments may risk undermining fiscal credibility,” the bank said.Stimulus spending in 2009 far exceeded the limit imposed by the MTFS on expenditures out of accumulated mineral revenues, sending the non mineral budget deficit past its MTFS bounds to 11.4% of GDP, it noted.“Concerns have also been raised about the quality of the stimulus spending as some involved village level projects for which project and financial reporting have historically not been forthcoming.“Moreover, the 2010 budget surprisingly lacks any provision for using the accumulated mineral revenues for debt reduction this year.“As the implementation of the LNG project will make attaining macroeconomic stability more difficult, it has become imperative that authorities exert tighter fiscal discipline in the years ahead.“The 2010 budget still features a ramp-up in development spending that, when combined with sizable private investment for the LNG project, will be expansionary.“Growth is projected to rebound strongly this year, as the construction of the LNG facility begins and the project directly and indirectly stimulates domestic demand.“Estimates suggested that real GDP growth could increase by 0.8 percentage points a year during the construction phase alone and then perhaps by 15%-25% per year during the 30-year life of the project, doubling the country’s GDP in three to five years after the project becomes operational, the bank said.
NBPOL to open refinery in UK this month
PAPUA New Guinea’s largest palm oil producer, New Britain Palm Oil Limited (NBPOL), will open a refinery in Liverpool, UK this month.Business Times last week reported that the K83 million worth and 150,000 tonne-a-year refinery will be opened by NBPOL at an undisclosed date.It is the first for any European country to have a sustainable palm oil refinery, in a development that environmentalists and industry hope will accelerate the move away from the deforestation often associated with the crop, according to Business Times paper.NBPOL owns certified sustainable plantations in Papua New Guinea and was reported that it has signed up United Biscuits, the maker of McVitie’s, and Jordans, the cereal brand, as customers.The group has a fully traceable, dedicated supply chain, eliminating the risk that the sustainable product has been mixed with unsustainable palm oil before it is used in food and personal care products.The opening comes amid renewed criticism of the use of some palm oil connected with deforestation.The paper reported that a recent campaign by Greenpeace against Nestlé led to 100,000 people writing to the head of the Swiss company and more than one million people downloading a viral video.The UK-based business newspaper quoted Alan Chaytor, executive director of NBPOL, saying “the group, which has invested K83 million in the 150,000 tonnes-a-year refinery, was attracting plenty of interest in its product”
Share advisory for OSL investors
OIL Search Ltd (OSL) has advised its shareholder that the price at which shares will be issued under the dividend reinvestment plan (DRP) for the 2009 final dividend is A$5.80 (K14.52) per share.Oil Search company secretary Stephen Gardiner, in a letter to the Port Moresby Stock Exchange (POMSoX) yesterday, said the price for shares under the DRP was calculated under with the DRP Rules and was the arithmetic average of the daily volume weighted average sale prices of all the Oil Search shares sold on Australian Stock Exchange (ASX).Mr Gardiner said this excluding off-market trade during the 10 trading days from and including March 19, 2010 which is 2% less discount.He said as previously announced, the DRP fully underwent for the 2009 final dividend.
Tuesday, April 6, 2010
Mitsui to fund LNG facility
A PRELIMINARY commitment agreement (PCA) signed between InterOil and Mitsui Corp of Japan for developing phase one of the Elk/Antelope LNG project has paved the way for the Japanese company to fund 100% the cost of condense stripping facilities (CSF) subject to final ratification.The deal was signed in Tokyo, Japan last week in the presence of Prime Minister Sir Michael Somare and Petromin chief executive officer Joshua Kalinoe. The CSF includes a liquid separation plant and pipeline in the project area, and earns tolling fees and various other benefits.Phase one of the project includes the extraction of condensate and development of upstream LNG extraction facilities.InterOil is the upstream operator for the Elk/Antelope LNG project and Mitsui Corp is one of the leading Japanese investment and trading companies.Congratulating the milestone agreement, Mr Kalinoe said under the arrangement Mitsui would also fund Petromin’s share of the condensate extraction costs.This means that Petromin and the State will not have to seek separate financing arrangements to fund their share of the equity.Mr Kalinoe said it was one of the best project financing deals for the current partners in the project which include Petromin, InterOil and Pacific LNG.It also means that early revenue for Petromin and the State from the condensate stripping component of Elk/Antelope LNG project where first cargo of condensate is expected by the second half of 2012.Under the arrangements, Mitsui will co-build the extraction facilities and will receive toll fee as well as financing cost from condensate revenue at first production of condensate.
InterOil-Mitsui JV lauded
PRIME Minister Sir Michael Somare has congratulated InterOil and Mitsui Corp for entering into a preliminary commitment agreement (PCA) to develop phase one of the Elk/Antelope LNG project.Sir Michael Somare said: “With these Japanese partnerships that we, as a country, are establishing, I will be happy to eventually leave politics with the knowledge that this Government has enabled PNG to take positive steps towards a secure and prosperous future.”Sir Michael witnessed the signing ceremony in Tokyo of the deals between InterOil and Mitsui last Tuesday.InterOil is the upstream operator for the Elk/Antelope LNG project and Mitsui is one of the leading Japanese investment and trading companies. This follows the HOA (heads of agreement) that was signed in Papua New Guinea last Dec 23, between InterOil and Mitsui, where the PNG Government ensured support to Mitsui.The PCA allow Mitsui to fund 100% of the cost of the condensate stripping facilities (CSF) which include a liquid separation plant and pipeline in the project area.Sir Michael said, under the arrangements, “project financing to be provided by Mitsui will also fund the State’s share of the condensate extraction costs”.The condensate will be sold on a net back basis to the InterOil refinery in Port Moresby at international market and local PNG market prices. The condensate stripping project agreement is the first step in bringing additional revenue and benefits to the people of Papua New Guinea from the InterOil-led Liquid Niugini Gas LNG project.
Petromin, Japex in JV
PAPUA New Guinea’s national oil, gas and minerals company Petromin PNG Holdings Ltd (Petromin) has entered into a long-term strategic partnership arrangement with Japan Petroleum Exploration Co Ltd (Japex).Japex is a publicly-listed company and partly-owned by the Japanese government.It is the exploration and development company with oil and LNG interests in Japan and other parts of the world.A statement released yesterday said the agreement on principles for a long-term strategic partnership was signed in Tokyo last Tuesday in the presence of the Prime Minister Sir Michael Somare by Japex president Osamu Watanabe and Petromin managing director Joshua Kalinoe.Mr Kalinoe said the purpose and intent of the agreement was significant for Petromin because of the value it would bring to the development efforts of the company in both operational and human resource development.He said the agreement allowed Japex and Petromin to work together in assessing the development opportunities in the hydro-carbon business in PNG, both at exploration and development stages.Japex will train Petromin staff in all aspects of the hydro-carbon business, including commercial and technical operations using Japex facilities in Japan and elsewhere.Mr Kalinoe said both Japex and Petromin had agreed to form a relationship that would also facilitate Petromin’s financial obligations in exploration and development, including the Elk/Antelop LNG project in Guld province.As part of the strategic partnership agreement, a number of technical staff from Petromin would be travelling to Japan this month to work with Japex’s staff on LNG project design and planning, including reservoir management and modelling.
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