- Port Moresby
- Posted 14th Oct, 2019
Kumul Petroleum puts records straight on PNG LNG revenue
PNG’s National Oil and Gas Company Kumul Petroleum Holdings Limited (KPHL) has provided the details of how it used its share of the PNGLNG Project of US$1.3 billion (circa K5 billion) of the US$19.2 billion (more than K65 billion) from PNG LNG Gross Revenue including condensate sales revenue between 2014 and 2018.
Kumul Petroleum Managing Director Wapu Sonk when presenting the performance report to the Trustee/Shareholder and Prime Minister James Marape during its Annual General Meeting last week revealed that from total gross revenue of $1.3 billion (K5 billion) alluded to is Kumul Petroleum’s share of proceeds from the total 470 LNG shipments as at 2018 year end.
In light of various queries raised by stakeholders, public and interested groups in relations to PNG LNG Project revenues, especially the State’s share of 16.77% stake in the PNG LNG Project; Mr Sonk explained that it is not a straight forward arrangement.
Mr Sonk said Papua New Guineans would only appreciate the results if they understand first how the project is structured as an unincorporated entity, the financing and marketing arrangements, project operational cost, project capital cost, and other aspects of the project are calculated and paid for before a final revenue for each equity partners are paid or distributed.
To put to rest speculations and misunderstanding by public in relations PNG LNG Project revenues; Mr Sonk gave a break-up of the US$19.2 billion as follows;
- Operator Cash calls (Opex & Capex) - US$6.3 billion which represents 33% of the gross revenue
- Debt finance servicing – US$4.9 billion representing 26% of gross revenue
- Royalties to project area landowners including facilities and pipelines - US$0.1 billion equivalent to 1% of the gross revenue
- Development levies - US$0.1 billion representing 1%
- Taxation (project tax to State) – US$0.4 billion representing 2%
- The Debt Service Reserve Account stands at US$ 1.1 billion representing 6% while
- Distribution to Joint Venture Partners was US$6.3 billion including Kumul Petroleum share.
Mr Sonk further stated on record that out of the K5 billion Kumul Petroleum revenue, the NOC has remitted to the State K4.2 billion in the same period 2014 to 2018.
This is almost 80% of the total revenue of Kumul Petroleum for this period.
He detailed that the K4.2 billion remitted to the State Kumul Petroleum support to the State over the last five years was in the following payments -
- Dividend US$ 399 million – (K1.33 billion)
- Return of Capital US$348 million - (K1.16 billion)
- Oil Search Collar related cost US$339 million – (K1.13billion)
- Corporate Tax US$ 89 million – (K300 million)
- Government Support US$22 million - (K73 million)
He said that the figure represents 78% of cash available to Kumul Petroleum from PNG LNG Project and other revenue sources like the Hides Gas to Electricity Project, Moran Oil (Eda Oil), and others.
The balance of the funds have been reinvested over the last 5 years in Kumul Petroleum, in PNG, and the People of PNG through the following initiatives:
- Kumul Petroleum Academy for Oil, and Gas Skills Development.
- Port Moresby 58MW Gas Fired Power Station under NiuPower.
- Reinvestment in existing or discovered and known Oil and Gas Fields.
- Hela and SHP Rural Electricity Programme.
- Staff development and education.
- Student sponsorships for University Studies.
- Graduate development Programs.
- Local salaries and, wages and consulting.
Meanwhile, Mr Sonk said the 2018 Audited Financial Statements and performance updates similar to this information would be disseminated for public consumption in due course.Back to News