Joint Venture pressures PNG by setting deadline for LNG project

NEWS DESK | AFP

SYDNEY - Oil Search has accused Papua New Guinea of backtracking on a deal to build a new liquefied natural gas project and set a 31 August deadline to resolve the dispute.

Oil Search is working in partnership with France's Total and US-based ExxonMobil on the US$13 billion site that would roughly double Papua New Guinea's exports of LNG.

The deal was signed in April, but since coming to office in May PNG's prime minister James Marape has raised concerns that locals will not receive enough benefit from the project.

"While initially indicating that the government had decided, in principle, to stand behind the agreement, more recently it has signalled its desire to renegotiate some of the agreed terms," Oil Search said.

Stressing that the agreement was "legally binding" and "fair and balanced", the firm said the "joint venture is seeking resolution by the end of August" when front-end engineering contract bids expire.

Although PNG's government is desperate to increase revenue and help develop one of the poorest countries in the Pacific, the new LNG project remains politically contentious.

A forecast windfall from an earlier multibillion-dollar LNG project -- which also involves Oil Search and Exxon -- has been much smaller than expected.

Researchers estimate the project created fewer than 1,500 post-construction jobs for Papua New Guineans and a fall in energy prices saw revenues dry up.

Go to this link for more: https://asopa.typepad.com/asopa_people/2019/08/joint-venture-pressures-png-by-setting-deadline-for-lng-project.html

Procurement system under review

Posted on The National

THE Health Department is doing its best to bring in quality medicines, says Health and HIV/AIDS Minister Elias Kapavore, pictured.
He said a major development partner, Asian Development Bank, was in the department to support and develop the department’s medical supply procurement and management system.
The minister said the procurement and distribution system was under review to ensure it efficiently delivered good quality medicines and medical supplies.
Kapavore made the statement in response to a front-page article in The National yesterday and said there were many challenges.
“Recently, there have been many incorrect and misleading information to the public and social media by an executive of the National Doctors Association (NDA),” he claimed.
“Such articles will only create unnecessary panic amongst the general public and must be corrected to assure our people that the Government, through the Department of Health, is working hard to ensure that basic and quality lifesaving medicines are available.
“I call on the NDA executives to exercise caution in its releases of information that they are not authorised to release.”
Kapavore said the National Executive Council recently approved two contracts for the supply of health centre and aid post kits and also for the supply of antibiotic drugs.
“Medical kits for health centres and aid posts are being packed in Port Moresby and will be transported to seven ports in the country before the end of August.
“For the antibiotics, it will be months before they are in the country. In the meantime, the department will procure emergency orders while awaiting the big orders to arrive.”
“Because of the delays in tender and all other processes outside the Health Department’s control, we will experience some shortages from time to time. But we will manage.”
Kapavore appealed to the NDA to not frustrate the procurement processes as any further delay to the already prolonged delays encountered, would cause critical medicine shortages.
“There are established legal processes for checks and balance that must be used to address any concerns,” he said
“These tenders went through a thorough screening process, through technical and financial evaluation committees, to ensure safety concerns are addressed.
“Under the Medicines and Cosmetics Act 1999, it is a legal requirement for any company dealing with pharmaceuticals in PNG to have a valid licence to import, wholesale and/or retail pharmaceuticals in the country.
“These licences are issued by the Pharmacy Board of PNG after specific requirements have been met and licences must be renewed annually.
“The Government is committed to improving the delivery of health services to our people and access to good quality medical supplies is a fundamental component of that commitment,” he said.

Go to this link for more: https://www.thenational.com.pg/procurement-system-under-review/

Koim challenges staff

Posted by The National

Acting commissioner general of the Internal Revenue Commission (IRC) Sam Koim says he has limited time and would like to make it count.
Koim, in his address to IRC staff in Port Moresby yesterday, said he was not there with a one-size fit all solution.
“I know that this great organisation has progressed well over the years under the leadership of then commissioner general Betty Palaso and commissioners Dr Alois Daton and Pauline Bre,” he said.
“Many of you have contributed to this progress so you should be proud,” he said.
Koim said the new level had posed new challenges, which were many and may not be solved overnight.
“The compliance rate of nine per cent last year, underreporting of K18 billion and an uncollected debt of K5 billion requires our undivided attention urgently,” he said.
“I do not see these figures as a problem, but an opportunity to make a difference.
“Imagine, by this time next year, we increased the compliance rate by 50 per cent, detect and reduce under-reporting by 50 per cent, recover 50 per cent of the outstanding debts, and prevent further under-reporting and uncollected debts accumulating.
“That is the difference I mean here.” Koim said whether one is a janitor, process clerk, auditor or assistant commissioner, everyone had a part to play to make it happen.
He assured the staff he would fight for the employees and for IRC.
“In return, can I count on you to fight for the making of this difference?”
“If it is to be, can it be up to you?
“Can you be the one to take the first step to see the difference?”
Koim will be visiting each division to learn of their work.

Go to this link for more: https://www.thenational.com.pg/koim-challenges-staff/

Oil Search share price value drops by K8.5 billion: Botten

By DALE LUMA - The National

THERE has been a drop of more than US$2.5billion (K8.5bil) in Oil Search Ltd (OSL) share price value largely due to unpredictable activities in the Papua LNG Project, says OSL boss Peter Botten, pictured.
The company managing director said the uncertainty in the timing of the project caused a large value to be removed from OSL’s share prices over the last few months.
“There has been a decline in our share prices since May this year by over US$2.5 billion (K8.5bil) which is largely related to events in Papua New Guinea,” Botten said.
“Clearly, the last few months have tested the confidence of investors with financing, insurance cost rise and ongoing uncertainty about what’s happening in Papua New Guinea.
“Predictability and stability is key to investor confidence and without this, the business becomes harder. We are the largest investor in PNG and when the country wobbles, we will wobble as well.
“Off course, we fully recognise and respect that any government has the right to review agreements, however, the Papua joint venture believes that the agreement that was signed earlier on in the year provides the State with greater benefits, quite rightly, than the PNG LNG Project.
“As PNG’s largest investor, we are very sensitive of this uncertainty surrounding where the Papua LNG agreement is going and we are working extremely hard to work with our joint venture partners and the Government to resolve any outstanding issues in a timely way.”

Go to this link for more: https://www.thenational.com.pg/oil-search-share-price-value-drops-by-k8-5bil-botten/

K340 million EU grant to benefit East, West Sepik farmers

By CLARISSA MOI - The National

THE rural farmers of East and West Sepik will benefit from a K340 million (€85 million) support grant from the European Union for agriculture development in the area.
Prime Minister James Marape, while acknowledging the European Union (EU) for the support during the launch of the grant to the greater Sepik region programme in Wewak yesterday, said this would extend to other parts of the country.
“The K340 million to the country is not easy and I thank the EU ambassador, Ioannis Giokrakis Argyropoulus, and (his) staff for working very hard to ensure we received this grant,” he said.
“This is the first of its kind and it’s coming into the East and West Sepik and will extend to Madang, Morobe, Western and other parts of the country – places where agriculture can grow well.”
The prime minister said cocoa production would benefit from the grant and vanilla, coffee, copra, palm oil, livestock and the rest of the agriculture sector would follow.
He acknowledged the former O’Neill-government for the input in securing the grant.
Argyropoulus said it was an investment for the benefit of all the people of PNG.
He said the grant was money from 500 million citizens of Europe and was one of the largest and biggest investments not only in PNG but the Pacific region.
Opposition Leader and Aitape-Lumi MP Patrick Pruaitch said the EU’s recognition of the agriculture potential of the Sepik region was a strategic helping hand.
“The agriculture sector has been and will continue to be the backbone of our developing economy and our society as it accounts for up to 40 per cent of gross domestic products (GDP),” he said.
“The resource sector driven primarily by mining and petroleum, currently brings in a greater portion of our export earnings but can we agree that agriculture is still and will continue to be the main source of employment, disposable income and livelihoods for most of our people.”
Pruaitch thanked the EU for the generous and timely support to the people of Sepik and the country.
East Sepik Governor Allan Bird also acknowledged EU’s support and asked the people of Sepik region to work towards ensuring the programme bore fruit.

Go to this link for more: https://www.thenational.com.pg/k340mil-eu-grant-to-benefit-east-west-sepik-farmers/

Oil Search on tenterhooks over Total’s Papua New Guinea gas deal

By Sonali Paul - Reuters

Oil Search warned on Tuesday that costs for a $13 billion plan to double gas exports from Papua New Guinea could rise if talks on a gas agreement between the government and Total SA drag on beyond next week.

Australia-listed Oil Search is a partner in Total’s Papua LNG project and Exxon Mobil Corp’s  PNG LNG project, which together aim to double LNG exports from the impoverished Pacific nation to around 16 million tonnes a year.

PNG’s new petroleum minister, Kerenga Kua, last week suddenly set out to renegotiate a gas deal with Total, which the company had signed in April with the previous government. Neither side has commented on the talks held last week in Singapore.

Oil Search Managing Director Peter Botten said on Tuesday further talks are planned this week and next week, with the aim of reaching an agreement by the end of August.

“It’s a dynamic environment at the moment,” said Botten, who was in Singapore during the talks, adding that he had been fully briefed on them.

He declined to comment on what issues have yet to be resolved or say how confident he was a deal would be done by the end of next week.

“I’m not going to put odds on it,” Botten told Reuters in an interview.

“We’re doing whatever we can to work with whoever we can to try and get this resolved as quickly as possible. Time is running out though.”

Botten has led Oil Search, PNG’s biggest company, for 26 years and has faced delays on projects before, but said the current uncertainty was rare in a country that has had a “very stable fiscal regime” for many years.

“It’s unusual that this is happening at such a critical time in the project.”

The Papua LNG project had already lined up bids from contractors to do preliminary engineering and design work, but those are due to expire in September, he said.

The companies risk having to pull together new bids if the existing bids fall over, and could face higher costs.

“It would be done in a market that probably would have a higher level of expenditure as the capacity in the market gets soaked up by new projects in other parts of the world,” Botten said.

Oil Search on Tuesday reported its half-year profit more than doubled to $161.9 million for the six months ended June 30 from a year earlier, just ahead of a consensus estimate of $160 million, on strong output from the PNG LNG project and higher oil-linked LNG prices.

The result last year was hurt by a shut down of PNG LNG following a major earthquake.

Go to this link for more: https://ramumine.wordpress.com/2019/08/21/oil-search-on-tenterhooks-over-totals-papua-new-guinea-gas-deal/

Drug row

By REBECCA KUKU - The National 

THE National Doctors’ Association (NDA) and the Government, specifically the National Health Department (NHD), appear to be heading for a “bruising showdown” over the country’s controversial procurement and supply of medicines (pharmaceutical drugs).
Despite the pro-government National Health Board’s (NHB) call to doctors to support and work with health secretary Pascoe Kase, the NDA is going ahead with its decision to submit its demands to the Government for the immediate change of the health secretary and the suspension of the two contracts, worth more than K100 million, awarded to Borneo Pacific Pharmaceutical Ltd (BPPL).
The NDA has indicated that it had 10 valid points for their demands, and that doctors would walk off their jobs if the Government did not act within a week after the submission of their demands.
NHB of Papua New Guinea deputy chairman Dr Mathias Sapuri called on doctors to support the health secretary and the NHD by offering appropriate technical advice and solutions as state employees.
“Health is a highly decentralised sector and was also highly complex and large. Therefore, its systems are set to ensure that health services are provided to all citizens of this nation,” he said.
“The role of the NHD is to develop policies, set standards, provide technical advice and monitor health services in the country. It is the responsibility of the provincial health authorities and public hospitals to deliver health services to our people.”
Sapuri said health sector employees, including the health unions, should not challenge the health secretary but to work with his management and offer advice, provide alternatives and work amicably with the department to efficiently and effectively address health challenges.
“The NHB is concerned with the ill-informed social media statements made by NDA, especially with regards to administration and management matters. “The matters raised by NDA are administrative and management in nature, and have clear and established processes to address.
“The NHB is of the view that the NDA interfered into management decisions and must stop creating unnecessary anxiety and panic,” he said.
“It is not the role of the NDA to disrupt and undermine legitimate management decisions. We are disappointed with the way certain professional people are conducting themselves under the good name of the NDA.”
Sapuri also said NHB wanted the NDA executives and the health department management to hold roundtables for the exchange of views and to find common grounds to move forward. “We must stop this nonsense because while you continue to argue in the media and make a mockery of yourselves, people continue to suffer from the vital services we are ethically obligated to deliver,” he said.
“NHB also views that Kase and his management have done so much to address the ever-growing challenges and it is only a matter of months that we will begin to see all these major system reviews and reforms bearing tangible outcomes.”
However, NDA secretary and chief of emergency medicine Dr Sam Yockopua told The National there had never been any such a board as the NHB.
“There has never been any meeting for the last five years even though they are supposed to meet 24 times a year.
“Kase is the chairman and the board has not been functioning. Much of the chaos and dilemma seen at the health department are directly due to this. And this is one of the 10 reasons why we want the secretary to be changed,” he said.
Yockopua said NDA would go ahead with its strike and would be presenting their demands to Prime Minister James Marape this week for the immediate removal of Kase.
Marape is away in Indagen for the 100th anniversary celebration of the establishment of the first Lutheran Mission in Morobe, and is expected to return to Port Moresby tomorrow.

Go to this link for more: https://www.thenational.com.pg/drug-row