- Port Moresby
- Posted 30th Jan, 2013
Kumul Petroleum Continues to Build in 2014
2014 has been a year of tremendous achievement for the National Petroleum Company of Papua New Guinea (Kumul Petroleum).
These achievements build upon the pivotal decision by the National Executive Council on January 30, 2013 to revive the Kumul Petroleum, which was parked under IPBC, and give it the mandate to operate as a commercial company with its own independent board, management and staff.
Kumul Petroleum in fact was set up as Kroton under IPBC in 2008, name changed to National Petroleum Company PNG (Kumul Petroleum) in 2010 and it was nominated to be the nominee to hold that State’s 16.6% interest in the PNG LNG Project. Kumul Petroleum has since played a significant part in delivery of the PNG LNG Project as the third largest commercial partner in the Project behind ExxonMobil and Oil Search.
Kumul Petroleum truly represents a unique transformation in the involvement of Papua New Guinea in Petroleum projects in the country. Previously, the State was only a passive recipient of royalties in hydrocarbon projects.
Under the existing Oil & Gas Act, this means Kumul Petroleum can represent State and take up to 20.5% commercial interest in any hydrocarbon project in PNG once these projects reach development stages. With the new mandate of Kumul Petroleum, Papua New Guinea now becomes an active commercial partner in these projects, and with better long-term returns on State investments.
Other countries in our region have also pursued similar ambitions to create National Oil Companies (NOC’s) with spectacular results.
In Indonesia, its state owned Pertamina is worth around US$70.9 Billion and is an active partner in local and international hydrocarbon projects.
In Malaysia, Petronas continues be a shining light among NOC’s in the Asia Pacific. Petronas turns over more than US$100 billion per year and contributes 45% of the Governments budget through dividends.
Kumul Petroleum is already worth between US$9-12billion now and growing. In future, these are the kind of returns that Kumul Petroleum aims to return to the ultimate shareholders, the people of PNG, through the State.
Kumul Petroleum: Getting it Right from Start
Building an NOC is no easy task.
Once the NEC decision was made in 2013 by the O’Neil Government, the goal became to build Kumul Petroleum correctly, with the right policy and frameworks, the right systems and the right people to ensure its objective’s are fully realized.
This began with its leadership.
On September 16, 2013, experienced Papua New Guinean Wapu Sonk was confirmed by NEC as the Managing Director of Kumul Petroleum.
He is supported by the Kumul Petroleum Board which is comprised with highly qualified and upstanding Papua New Guinean’s with vast experiences in the private and public sector, led by Board Chairman Mr. Frank Michael Kramer, CBE.
Together, they have moved quickly forward, working tirelessly to recruit the best talent in PNG and abroad and set up the Strategic Plan by which the company is being driven to full fill its mandate and that is to maximize value for the people of PNG through participation and value add investments in the hydrocarbon industry.
Kumul Petroleum is committed to observe best practice in its business operations and dealings, transparency and open reporting of its governance policies so that stakeholders have confident in us.
Kumul Petroleum Staff
At the same time Kumul Petroleum has recruited excellent and experienced national managers and staff to develop the important corporate units of the company.
To date Kumul Petroleum has 49 staff, all from different professional backgrounds and different parts of PNG. Our equal opportunity policy is very strong hence 35% of staff is female.
The company wants to attract and retain the best Papua New Guineans for important roles & responsibilities in the company, to ensure our current and future success in a highly demanding industry.
As Kumul Petroleum develops its Human Resource & Talent Management capacities, it will introduce the latest in HR Practices of the industry, ensuring its competitiveness on a global standard.
Kumul Petroleum is establishing a robust performance management system which will promote individual performance, talent development and succession planning.
Achievements of 2013
As mentioned, 2013 was a pivotal year for Kumul Petroleum.
As well as the already mentioned developments, the company also signed an MOU with Petromina to work together to identify and develop oil & gas opportunities in PNG and Indonesia and other jurisdictions.
This MOU signifies Kumul Petroleum’s ambition, even at a very early stage of its development, to forge relationships with NOC’s in the region and as well as other Super Majors.
With its option under the Oil & Gas Act to pursue commercial interests in all hydrocarbon developments in PNG, covering upstream, midstream and downstream, forging these strategic working relationships with established partners will only improve Kumul Petroleum successes in the future.
Achievements of 2014
In 2014, Kumul Petroleum has continued to commitment to growth.
Early this year, the company moved its administrative operations to a brand new office located in the heart of business district, at Douglas Street, Down Town, Port Moresby with the official opening on the 16th May, 2014 by the Prime Minister.
At the same time it was able to fill most of its strategic and substantive position within the first 12 months of operation as a company following the NEC decision to revive the company in January, 2013.
On 23rd May 2014, the first loading of PNG LNG commenced, as several million tonnes of LNG was pumped on to the MV ‘Spirit of Hela’ which then departed on May 26 for delivery to Japan, one of the export destinations of PNG gas.
Kumul Petroleum as a significant project partner celebrated this event with all other project partners.
This milestone will go down the history of PNG as the first ever LNG product being developed and processed onshore and sold to international markets. Kumul Petroleum is proud to be a partner representing all Papua New Guineans in this significant history.
Kumul Petroleum also signed an MOU with PNG Power Limited on August 2014, to develop interim and long term energy supply solutions for the growing demand of electricity in Port Moresby, and the rest of Papua New Guinea.
This MOU is part of Kumul Petroleum’s Port Moresby Gas To Electricity (GTE) Supply Project.
The Port Moresby GTE Project, once completed, will see Kumul Petroleum purchase gas from the PNGLNG Project, condition it near the LNG plant site and supply to PNG Power for its power generation needs.
As a partner in the PNGLNG Project, Kumul Petroleum is able to commence negotiations with the PNGLNG Project to secure an adequate supply of gas over several years. Kumul Petroleum will make available gas to PNG Power to generate up to 100 MW of power in the near term with future expansion options.
Kumul Petroleum has assembled a dedicated project team to work on the Port Moresby GTE Supply Project led by the GTE Project Director, Richard Robinson, a very experienced project manager within the hydrocarbon industry. His team will be responsible for managing the negotiations and execution of the project from tie-in to the ExxonMobil facility, laying of the pipeline and the gas conditioning plant. The IPP operation and the transmission work will be managed by PNG Power.
Kumul Petroleum has also signed a similar agreement with MRDC to work together on the POM GTE Project this year as Project Partners.
Other achievements of 2014 also include launching of its website http://kumulpetroleum.com. The website provides visibility of Kumul Petroleum to all stakeholders.
Kumul Petroleum is building on the State’s multi-billion dollar investment in the PNG LNG Project.
The company’s unique partnerships with international and local companies in the oil and gas industry will bring growth by employing world class talent and business practices for assessing investment decisions, led by determined Papua New Guineans to increase value in the hydrocarbon industry, for Papua New Guineans.
As the nation celebrates its 39 Independence, we would like to say, the future looks bright and CONGRATULATE AND WISH ALL PAPUA NEW GUINEANS HAPPY INDEPENDENCE CELEBRATIONS.Back to News