PNG Kumul Petroleum Holdings Limited Pays an Interim Dividend of K100 million to state

 The Papua New Guinea Prime Minister, Hon James Marape as Trustee of Kumul Petroleum Holdings Limited (KPHL) received an interim dividend payment of K100million from Kumul Petroleum Holdings Limited today, which was presented by the Board Chairman Prof Benedict Yaru and Managing Director of KPHL, Wapu Sonk at Parliament. 

Upon receiving the dividend cheque, the Prime Minister thanked the Board and Management of Kumul Petroleum for making such timely payment of a large dividend. The interim dividend payment at this time reflects the improvement in oil and gas (LNG) prices this year and the Prime Minister further said he expects the Company to pay another K200Million to meet the full dividend of K300million as budgeted in the National Budget for 2021.  

My Government has come to recognise that active commercial participation and having a higher Equity interest by Kumul Petroleum as the National Oil Company (NOC) of Papua New Guinea is critical because it captures a significant portion of the lion’s share of the oil and gas proceeds for the country, which otherwise would normally go to the foreign commercial investors while the State waits to collect taxes and royalties which usually are further squeezed by concessions. Equity is King in any Project whether it be Mining or Petroleum or any other type of Projects, hence our push to have higher stake in all new Projects, Porgera Gold Mine, Ok Tedi etc.  

The Prime Minister said “take back PNG is not a slogan without consequence; it is in fact a call to the people of this country to take control of the agenda for the economic betterment of this our country. Taking our nation back requires PNG to have control over its oil and gas sector from exploration through to production and development. This cannot be achieved under the current regime and without a fully empowered National Oil Company (NOC). That’s why my Government is committed to bring about positive changes to the regime in the form of production sharing in line with international practice which the major oil and gas companies are already used to. This will be the game changer we have been waiting for.” 

Turning his attention to the company’s performance, the Prime Minister said “despite the setbacks caused by poor decisions by the past government with the UBS Loan which cost Kumul Petroleum and thus the country about AUD362Million (almost a billion Kina) in direct losses, the Prime Minister commended Kumul Petroleum for maintaining a high standard of corporate governance with “unqualified audit reports” for every year since active operation in 2014. He said the company has every attribute to become like Petronas of Malaysia and make huge contributions to the country, if it were left to operate independently like any other commercial entity and without undue interference by the government, which is also how Petronas operates”. 

“I am pleased to know that after 696 LNG cargos by end of 2020, and from a net proceeds of USD1.644 billion received in 2014 to end of 2020, approximately USD$1.119 billion has been passed onto the State; meaning KPHL has paid to the State the equivalent of 68% of the total distributions received from the PNG LNG Project”.  

These remittances to the State comprise of USD$521,900,300 in direct dividends, USD$394,000,000 in return of capital payments (payment to State under Vendor Finance arrangement for Kroton Equity Option), USD$181,000,000 in various forms of taxes to IRC and USD$23,000,000 on corporate social responsibility projects such as rural electrification Projects in the country and the refurbishment and installation of state of the art heart and cancer facilities at the Port Moresby General Hospital and ANGAU Memorial Hospital in Lae to name a few. 

The Prime Minister further said “we also must not forget that Kumul Petroleum not only preserved the rights of the landowners and provincial governments to the Kroton Equity Option and provide the necessary vendor financing for those options, but Kumul Petroleum also had to accept a reduction of about US$600 Million in the offer price from US$1.0128 Billion, which was a significant dent to its balance sheet. So in fact, KPHL gifted US$600 Million to the landowners and provincial governments of the PNG LNG Project”.

The remaining revenues of KPHL have been invested in various capital investments projects including NiuPower’s 58MW gas fired power plant outside Port Moresby, re-invested in existing oil and gas fields it has cash call obligation to and other related facilities, a state of the art live training facility for the Kumul Petroleum Academy, and retained for looming projects including Papua LNG, Pasca Gas Project and related exploratory and feasibility studies. ...read more on >> Pacific Mining Watch 

Statement

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