Photo credit: PM James Marape News Page - PM Marape (right) receiving the K200 million from KPHL Chairman Ben Yaru
The Papua New Guinea government, five PNGLNG-impacted province governments, and landowners have received a total of K551.82 million from Kumul Petroleum Holdings Limited, the country's largest oil and gas business (KPHL).
Hon. Prime Minister David Cameron On behalf of the state, James Marape received a K200 million cheque, while the five province administrations received checks totalling K62.635 million. A total of K189.189 million will be distributed to landowners in these provinces.
These dividends — benefits directly from the PNGLNG project deal – were delivered to the recipients in a dramatic presentation event that emphasized the strength of equity ownership, as advocated by Prime Minister Marape.
PM Marape accepted funds on behalf of the National Government and province governments whose governors were not present, while governors of the Gulf and Southern Highlands, Chris Haiveta and William Powi, expressed their thanks for the "long-awaited, two governments later" payments.
With the non-transfer of the 4.27 per cent equity committed to under the Kokopo UBSA in 2009 since 2014, Prime Minister Marape's Government urged KPHL to uphold the spirit and meaning of the PNG LNG project agreement, which has cost PNG K5.2 billion since the first gas export in 2014.
This preferential dividend of K281.82 million recognizes the fact that the National Government has refused to allow these beneficiaries to exercise their purchase options since 2013, instead of investing the 4.27 per cent equity parcel from 2014 in the failed UBS loan for Oil Search Ltd Shares and other government obligations.
As a result, the Marape Cabinet authorized KPHL to reconcile 'opportunity cost' and 'time value' losses, and to provide proportionate benefits to the five PNGLNG provinces and their landowners now and in the future.
The State received a K100 million check earlier this year, increasing the total to K300 million. This payment is in accordance with the KPHL 2021 year operational plan and the national budget 2021.
According to the percentage allocation, the province administration of Hela received K28.5 million, SHP K19 million, Gulf and Central K6.3 million each, and Fly River K2.52 million. This amounts to K62.635 million in total.
The Prime Minister praised and complimented KPHL, its board of directors, and management, describing the firm as PNG's "flagship enterprise."
He stated that the distribution of Kroton equity and other advantages had been delayed for a long time and that it was excellent to see it finally resolved.
He further stated that one of the reasons for his departure from the previous PNC-led administration was the delay in the release of this 4.27 per cent equity.
“It is very unfortunate that $291 million or over K1 billion of what would have been the 4.27 per cent Kroton equity money was squandered through the O’Neill submission that his cabinet approved for the ill-fated Oil Search shares. It was painful, “ he said.
“That is why today is a beautiful day to witness this happen, as we continue to take back more of our resources for our people. This is one tick off on my commitments to our country.”
The Prime Minister has urged that the five provincial governments spend the monies wisely to develop their provinces which still remains far from being developed despite carrying PNG’s oil and gas productions since 1990.
Meanwhile, PM Marape has directed KPHL to fully detach the 4.27 per cent and establish a separate subsidiary structure to handle investments and provide dividends to beneficiaries.
Additional equities that may be available in PNGLNG, Papua LNG, or P'nyang gas resources, he has indicated, will present greater opportunities for more equities for Kumul, provincial governments, and landowners in the future, subject to negotiations his government is holding with the current joint-venture partners.
This 4.27 per cent subsidiary will hold further shares for our provinces and landowners in the Western, Hela, SHP, Gulf, and Central provinces in the future.
All provincial governments and landowners have been urged by the Prime Minister to establish this permanent institution outside of Kumul to handle their shares in those projects.
Reference: PM James Marape News Page (15 December 2021). “Kumul Petroleum delivers over K550 million in LNG dividends”.
