Kumul Petroleum Holdings

Today Kumul Petroleum Holdings announced that it had finalised agreement with Santos to purchase a 2.6% equity interest in the PNG LNG Project for US$576 million, plus US$160 million share of project debt.

Kumul Petroleum’s managing director, Mr Wapu Sonk said, “This transaction is the culmination of many months of discussions that have taken place with national and international financiers since the NEC gave its initial approval for KPHL to acquire additional equity in the PNG LNG Project in September 2022.”

“The PNG LNG Project is a mature, profitable and de-risked petroleum project that has consistently operated above its nameplate capacity and which has many more years of commercial life left as additional gas fields are brought on line.”

Mr Sonk explained that on completion of the sale of the 2.6% equity in the PNG LNG Project to Kumul Petroleum, Santos had agreed to grant KPHL a Call Option to acquire a further 2.4% interest in the project, and that this Call Option must be exercised on or before 30 June 2024.

“The total purchase price for Kumul Petroleum to exercise the Call Option will be US$524 million, plus US$145 million share of project finance debt. At the end of this process Kumul Petroleum will have acquired an additional 5% equity in the PNG LNG Project.”

” Kumul Petroleum has ensured that entering into financing arrangements to acquire additional equity in the PNG LNG Project will not affect its financial capability to take up the State’s full 22.5% equity entitlement in the forthcoming Papua LNG Project and also continue to pay annual dividends to the State, in line with our annual operating plans,” said Mr Sonk.

“Kumul Petroleum has thanked the Prime Minister, Minister for State Enterprises, Hon. William Duma and all the members of the NEC for their support during the process to close this transaction.”

Mr Sonk concluded, ”Kumul Petroleum, as the national petroleum and energy company, is fulfilling its vision statement, which is to build the nation through its energy resources. We must balance long-term commercial investments and consequent sustainable income streams with our ability to support the National Government to achieve its development priorities as outlined in the Medium Term Development Strategy and Vision 2050 plans.”

The construction of the fabrication and training facility by Kumul Petroleum Holdings Limited will create direct employment for up to 1000 Papua New Guineans and create business for local companies in the country.

Construction of lay down and necessary associated site work, including services rights of way and site access roads has now started after the construction contract was signed in July.

Kumul Petroleum Holdings Limited’s Corporate Affairs Executive General Manager, Luke Liria, in his presentation at the PNG Chamber of Mines and Petroleum CANCONEX conference in Lae said, “as the country’s national petroleum and energy company, we have a responsibility to drive development in this sector of the economy, and to provide direct financial benefits for the National Government and other stakeholders.”

“Our objective is to capture a market share in the fabrication of large, high-value electrical and mechanical, electrical and piping modules for future petroleum and mining developments, renewable energy and general heavy industry projects, which up until now have all been imported from overseas.”

“We recognise that the petroleum industry requires specialist trade skills not necessarily used by other industries in the country, skills that will increasingly be needed as petroleum projects come online,” he said.

A training facility will be established adjacent to the fabrication facility to train and upskill Papua New Guineans who will be required in large numbers in forthcoming LNG and other major developments in the country.

Mr. Liria said with Papua LNG projected to gain FID in 2024, followed by P’nyang LNG, it is necessary to train a cadre of Papua New Guineans with skills to participate in petroleum industry construction activities between now and 2032.

Construction academy graduates will have trade skills that will enable their employment in many of the forthcoming planned major resource and other projects in the country.

Kumul Petroleum Holdings Limited continues to support the national government’s effort to create employment and upskill the workforce of the country through its rural electrification programs and other projects around the country.

At Parliament House today Kumul Petroleum Holdings presented the Government with a dividend cheque for K250 million.

Handing over the interim dividend payment to Treasurer, Ian Ling-Stuckey, and SOE Minister William Duma, Wapu Sonk, Managing Director of Kumul Petroleum Holdings said, “KPHL is fulfilling the commitment it made in its 2023 Annual Operating Plan, that an interim dividend payment would be made mid-year.”

“Kumul Petroleum has continued to support Government through direct payment of dividends and tax and indirectly through implementation of NEC approved projects. In 2022 KPHL paid K951 million in corporate taxation and this year, KPHL is expected to pay similar amount.

Mr Sonk, accompanied by KPHL directors Paul Nerau and Peterson Pipi, outlined that Kumul Petroleum was still negotiating finance but close to closing a deal on acquiring additional equity in the PNG LNG Project from Santos, as requested by Government. Also, that KPHL was ready to participate and maximise its participartion in the forthcoming Papua LNG Project.

“Kumul Petrolem intends to continue with its petroleum and energy sector initiatives which will result in long-term benefits for the country. This includes commercialising stranded gas fields and investigating domestic utilisation of gas for electricity generation and value added petrochemical chemical production. We can only do this if KPHL has the financial capability and allowed flexibility to operate commercially.”

Mr Sonk added, ”Kumul Petroleum intends to maximise national involvement in current and future LNG projects in areas of national content, especially during the construction phase. To make this a reality, KPHL is investing in a highly advanced skills training facility together with a Fabrication Facility which will create 4000 jobs directly and indirectly on top of those that will be created by Papua LNG and other projects.

Mr Sonk concluded, ”Kumul Petroleum, as the national petroleum and energy company, stands ready to support the National Government and its development priorities as outlined in the recently launched Medium Term Development Strategy and Vision 2050 plans.”

For the second year in a row, Kumul Petroleum, Papua New Guinea’s national petroleum and energy company, is a gold sponsor for the New Britain Open golf tournament – the longest running sporting event in the country.

Held at the Ralum Country Club in Kokopo from 21-23 July, this major regional sporting event regularly attracts more than 100 amateur and professional golfers from throughout Papua New Guinea and Australia.

Wapu Sonk, Managing Director of Kumul Petroleum Holdings said, “KPHL is happy to contribute to making this annual event a success.”

“Kumul Petroleum supports a number of sporting codes including golf and our small contribution to this particular event is in line with our underlying rationale that sport is an ideal way to bring people together to work and play in a disciplined manner.”

Mr Sonk said, ”Our company is no stranger to East New Britain Province, which has in past years been the recipient of a number of our community investment programs, particularly in the health and law and order sectors.

“Last year Kumul Petroleum was able to provide Nonga Base Hospital with K500,000 of equipment for their Emergency Department, part of the company’s wider support of health infrastructure in the country.”

“Kumul Petroleum also donated three fully kitted out police vehicles to the East New Britain provincial administration to assist them strengthen law and order in the province

Mr Sonk concluded, ”Kumul Petroleum, as the national petroleum and energy company, stands ready to support worthy community initiatives from organisations such as the New Britain Open.”