Petromin assets split up

Source: The National, Monday, April 8, 2013

By MALUM NALU

Petromin PNG Holdings Ltd, and the Independent Public Business Corporation (IPBC) will be wound up and their assets and interest transferred to new Kumul entities to be set up, Prime Minister Peter O’Neill announced last Friday.

“All mining assets and interests for the state will be transferred to a new entity known as Kumul Mining Holding Ltd (KMHL),” he said.

O’Neill making a point at last Friday’s press conference where he announced the restructure.-Nationalpic by MALUM NALU

“This includes the state’s interests in Bougainville Copper Ltd (BCL), Ok Tedi Mining Ltd (OTML), and the state’s interest in Ramu Nickel project, currently held by Mineral Resources Development Corporation (MRDC).

“Also to be transferred to KMHL are the State’s interests in Tolukuma Mines, which are currently held by Petromin.

“All petroleum asset and interests owned by the State will be transferred to an entity known as Kumul Petroleum Holding Ltd (KPHL).

“This include the state’s interest (16.575%) in the PNG LNG project currently held by Kroton, a subsidiary of IPBC; 0.2% interest in the PNG LNG project held through a Petromin subsidiary called Kumul LNG Ltd, the state’s interest in Eda Oil currently held by Petromin, and exploration licences and other assets/interests held by Petromin.

“The IPBC will be wound up and all the state owned enterprises will be transferred to a new entity called Kumul Corporation Holding Ltd.”

Restructure of all the state’s investment in petroleum and mining assets, and the state-owned enterprises (SOEs) in the country, follows a decision by the national executive council (NEC) last fortnight to restructure and consolidate investment by the state in petroleum and mining ventures, and all the SOEs.

O’Neill said the restructure was a major decision by government to provide more transparency and accountability, and more focus in the way the state’s investment in mining and petroleum assets, and SOEs, were managed.

He said the restructure and consolidation of these state-owned assets were necessary to remove inefficiencies, and duplication and overlapping of participation.

“Through this restructure we are creating a commercial framework that is cohesive and focused.

“It will result in efficiency that will maximise benefits that will flow to the State.”

O’Neill said Petromin was a good example of what was tested globally by oil and gas majors, found wanting, and discarded.

“Oil Search shed mineral assets in Porgera gold mine to concentrate on oil and, and look at where it is now,” he said.

“Petromin bought into Tolukuma Gold mine in 2008, but continues to make a loss from this venture.

“Its total losses (in sales) stood at K45 million as at Dec 2012.

“The state’s position is not made any better with duplication and overlapping of participation in the PNG LNG project, with Kroton holding 16.57% in the project, while Petromin holds 0.2%, both for the state.

“This is not only confusing, but it also creates an environment for Kroton and Petromin to compete for nomination which is undesirable.”