Policies and Guidelines

Eligible projects may be sponsored through four recognised sources:

• District Development Authorities (DDAs)
• Provincial Governments
• The National Council of Churches
• Provincial Councils of Churches

Projects must align with the Medium-Term Development Strategy and applicable district or provincial plans. Priority will be given to projects such as roads, bridges, health, education, water supply, electricity and economic infrastructure that provide meaningful benefits to communities.

Individual project funding will be limited to K5 million. In accordance with the Prime Minister’s policy commitment, 10% of the Program’s annual allocation is reserved for church-related projects sponsored through the National Council of Churches or Provincial Councils of Churches. These projects remain subject to KPHL’s standard assessment, approval and accountability requirements.

Applications will be screened by KPHL for eligibility, readiness, affordability, development impact and risk.

After initial approval by the Trustee with a funding ceiling, KPHL will carry out a detailed technical, financial, legal, economic, social and integrity appraisal. Project appraisal will include reviewing land, environmental and regulatory factors, and any necessary independent third-party engineering or quantity-surveying inputs.

Projects sponsored by DDAs or Provincial Governments must be procured in compliance with the Public Finances (Management) Act and applicable National Procurement Commission requirements. KPHL will verify procurement compliance, contractor ownership and capacity, and the reasonableness of tendered prices before funding and implementation approval.

Final funding approval by KPHL will result in a Community Support Project Funding and Implementation Agreement with the project proponent, setting out scope, governance, responsibilities, procurement obligations, price, reporting, audit, milestones and handover requirements.

Project implementation monitoring and contract management will be carried out by KPHL’s project unit. Milestone-based disbursements will be made to contractors against independently verified work progress.

Kumul Petroleum will no longer consider ad hoc requests or projects that are not technically detailed, properly costed or submitted through approved sponsoring channels. KPHL will not make large up-front payments and will administer the Program under the Board-approved Guidelines through a structured, transparent and accountable process.

The Guidelines are designed to ensure that investment decisions are guided by commercial merit, strategic fit, affordability, risk and sustainable shareholder value. No qualifying investment should proceed outside the prescribed investment-gate process or without the required approval authority.

The Guidelines apply to:

• All KPHL capital investments over K1 million.
• Core petroleum value chain and non-core (diversified) investments.
• Investments funded from KPHL free cash flow, external debt, JV partner carry or vendor financing.

Acceptable investments are segmented into the following broad areas:

• Petroleum exploration and appraisal; greenfield petroleum development; and brownfield production optimisation.
• Midstream and LNG infrastructure; downstream and domestic gas supply; and new energy diversification.

Every investment must demonstrate, as a minimum:

• Payback period of no more than 7 years from commercial production.
• Risk-adjusted hurdle rate of at least 10%.
• Positive Net Present Value (NPV) under base-case commodity prices and applicable PNG industry fiscal terms.
• A credible funding plan, acceptable risk allocation, strategic alignment and capacity to generate sustainable commercial returns.

The criteria above will be achieved and enforced through a mandatory five-stage investment lifecycle. Progression to the next gate occurs only when the requirements of the preceding gate have been satisfactorily demonstrated and documented:

1. Gate 1 – Screening – confirm strategic fit, investment rationale, preliminary economics, funding options and key risks.
2. Gate 2 – Feasibility – complete technical, commercial, financial, legal and risk due diligence; validate assumptions and test payback, hurdle rate and NPV.
3. Gate 3 – Approval – submit a formal investment case demonstrating compliance with the Guidelines and obtain the required approval under the financial thresholds.
4. Gate 4 – Execution – implement only within the approved scope, budget, financing structure, contracting strategy and agreed milestones, with active cost and risk controls.
5. Gate 5 – Review – undertake post-investment and benefits-realisation review against the approved business case, including actual cost, schedule, returns, risks and lessons learned.

• Up to K10 million – within the KPHL Board-approved Annual Operating Plan.
• K10 million to K25 million – approval by the Kumul Petroleum Trustee.
• Above K25 million – NEC approval, following referral by the Kumul Petroleum Trustee.

The KPHL Board will exercise oversight of all investment decisions through its appropriate sub-committees and management assurance processes. Management must maintain an auditable investment record at each gate, including the business case, financial model, due diligence, approvals, implementation performance and post-investment review. This ensures consistent commercial decision-making, capital discipline and accountability throughout the investment lifecycle.

The Guidelines are benchmarked against OECD Governance Guidelines, the NRGI Resource Governance Index and EITI Standards.

The Guidelines apply to:

• A person or organisation who can demonstrate evidence of legal status, governance structure, office holders, activity plan, budget and capacity to deliver the proposed activity.
• Scholarship assistance is reserved exclusively for students enrolled at recognised local educational institutions in Papua New Guinea. Applicants must provide evidence of enrolment, academic performance and any other information required by KPHL. KPHL will not provide scholarship support for overseas studies.

The Guidelines do not apply to any Government-related requests.

These fall into the following broad areas:

• Sports Sponsorship – where this contributes to community development, national unity, youth participation, gender equality, inclusion and healthy lifestyles. This could include support for national sporting federations, provincial or community competitions, school sport, coaching or talent development.
• Education and Student Sponsorship – where this contributes to capability development, community and national development and industry. Scholarship support is restricted to recognised local educational institutions in Papua New Guinea and does not extend to overseas studies.
• Community Investment – where this aligns with KPHL’s ESG, community or social licence objectives.
• In-kind Support – provision of goods, services, facilities, staff time, equipment or other non-cash support.

All sponsorships, donations and community assistance must be submitted in writing using an approved KPHL application form and assessed in accordance with these Board-approved Guidelines. Applications must describe the applicant, purpose, support requested, budget, expected outcomes, sponsorship benefits, timing, risks and reporting commitments.

Approved sponsorship will be governed by a written agreement that sets out obligations, performance and reporting requirements. Incomplete, unsupported or unsolicited requests may be declined without assessment.

Payments will be made directly to the recipient organisation, educational institution, supplier or approved service provider. Payments to individuals will be limited, justified and subject to enhanced controls.

KPHL will establish a Sponsorship and Donations Review Committee to assess applications, carry out due diligence, identify risks, confirm that the required approvals have been obtained, and monitor expenditure and implementation in proportion to the value, risk and profile of the sponsorship. This oversight framework is intended to strengthen governance, accountability and control over KPHL’s sponsorship operations.

The assessment will consider strategic alignment, community impact, ESG value, brand and reputational benefit, governance and financial controls, safeguarding and integrity standards, value for money, deliverability and any actual, potential or perceived conflict of interest.