Oil Search profit falls on higher exploration spending, shutdowns

Dow Jones Newswires

Oil Search Ltd, the Australian partner of ExxonMobil Corp.  in a major gas-export project in Papua New Guinea, Tuesday booked a 13% fall in annual net profit after it more than doubled spending on exploration and suffered several shutdowns at its oil facilities.

Net profit for the year to De. 31 fell to US$175.8 million from US$202.5 million a year earlier. The result beat the US$161 million average of six analysts' forecasts compiled by Dow Jones Newswires.

Oil Search's production was affected by the shutdown of the Kumul Marine Terminal in Papua New Guinea in late July after an oil sheen was spotted on the surface of the water. The company checked the facility, which has since reopened, but was unable to find the source of the oil leak.

In a statement, the Sydney-based company said the shutdown of the Kumul terminal had led to 400,000 barrels of oil equivalent being deferred, although overall production of 6.38 million barrels of oil equivalent for the year as a whole was within its guidance range.

Oil Search said it spent US$144.0 million on exploring for new reserves of oil and natural gas in the year, up from US$60.6 million in 2011. In addition to its operations in Papua New Guinea, the company has assets in Iraqi Kurdistan and Yemen and last month began drilling in Tunisia.

Oil Search is betting on Asian demand for clean-burning fuels to remain strong as it transforms itself from an oil producer into a company that generates a larger proportion of its revenues and earnings from natural gas. It owns 29% of the PNG LNG project in Papua New Guinea, which aims to produce 6.9 million metric tons of liquefied natural gas a year.

Oil Search said PNG LNG was 75% complete at the end of last year and remains on track to deliver its first cargo of liquefied natural gas to customers in China, Taiwan and Japan in 2014. Construction costs for PNG LNG jumped by about 20% to US$19 billion in late November because of foreign exchange fluctuations, landowner disputes and torrential rain.

"As previously indicated, the capital cost increase is expected to be funded 70% by debt and 30% by equity. Discussions are currently underway to secure the US$1.5 billion of supplemental debt that is provided for under the existing project finance agreement, to fund the 70% debt component," managing director Peter Botten said in a statement.

Oil Search said it expects to produce between 6.2 million and 6.7 million barrels of oil equivalent in the current fiscal year. It forecast capital expenditure this year in a range of US$1.93 billion to US$2.1 billion, up from US$1.86 billion in 2012.

Acting MD: National Petroleum Company of PNG is ready for the challenge

Source: The National, Monday, February 25, 2013 

NATIONAL Petroleum Company of PNG (NPCP) acting managing director Wopu Sonk is looking forward to the challenge of managing the country’s 16.8% stake in the PNG LNG project.
The company, formerly known as Kroton when it was first established in 2008, was dismantled in November 2011 after Peter O’Neill came in as prime minister in August of that year and was revived by national executive council (NEC) on Jan 30 this year.
After its dismantling, NPCP came under the Independent Public Business Corporation (IPBC) until last month’s cabinet decision.
Acting managing director Wapu Sonk, told The National that the government saw the value of NPCP because of its strong balance sheet, riding on the back of the PNG LNG project.
“The thinking of the government now is to ride on the back of this asset (NPCP), and participate in all other projects that are coming on stream, maximise our participation in the hydrocarbon projects coming on stream” he said.
“We will have a full operating capacity so that we participate in train 3 of the PNG LNG project, Stanley and all other projects such as Gulf LNG.”
Sonk said NPCP had a small but very-professional team of technical staff which handled all stakeholder commitments in the PNG LNG project.
 

National Petroleum Company of PNG board members sworn in

Source: The National, Monday, February 25, 2013 

 

By MALUM NALU

PAPUA New Guinea should build on its own capacity to partner with resource developers in a meaningful way rather than become tax and royalty collectors, according to Public Enterprises and State Investments Minister Ben Micah.
He said this during the swearing in of board members of state-owned National Petroleum Company of PNG (NPCP), which owns 16.6% of the PNG LNG Project, last Friday.
The board is chaired by Kramer Ausenco chief executive officer Frank Kramer, with board members that included Trans Wonderland managing director Larry Andagali, Public Enterprises secretary Mathias Lasia, Mineral Resources Lihir (MRL) chairman Mark Soipang, scientist Dr Benedict Yaru, PNG Chamber of Mines and Petroleum president Dr Ila Temu and NPCP management led by Wapu Sonk in his capacity as acting managing director.

Kramer takes his oath of officer as Sonk, Lasia, Yaru (obscured), Andagali, Soipang and Temu look on.-Picture by MALUM NALU

NPCP, formerly known as Kroton in 2008, is the company nominated by the state to participate in the PNG LNG project.
It was revived by the national executive council  just three weeks ago.
In November 2011, following the Aug 2 change in government, NEC moved to shelve NPCP and its employees were transferred to IPBC.
“Our (government) view is that PNG should build on the balance sheet of NPCP and build our own capacity to partner our resource developers in a meaningful manner and not become tax and royalty partners,” Micah said.
“This is why NPCP was revived by NEC three weeks ago.”
Micah said he was confident the board and management of NPCP would:
n Start laying foundations for the company to grow and potentially match Malaysian-owned Petronas one day;
n Pay dividends to the state through the sovereign wealth fund (SWF);
n Drive other development agenda with the government;
n Develop technical, commercial, and legal skills that were critical to success for a company involved in oil and gas extraction;
n Lead in commercial negotiations for future development projects in PNG; and
n Lead in human resource development.
Kramer said the challenges ahead were significant.
“The foundation framework for NPCP must be completed,” he said.
“Legislative support to allow the company to operate autonomously with international levels of governance and accountability must now follow.
“Other projects such as Train 3 on the PNG LNG, the Gulf LNG, and the Stanley condensate stripping plant project are on the heels of the trailblazer PNG LNG.
“This means that NPCP must be operationally ready to step up and play its part in this exciting period in PNG’s development.”
Kramer said the PNG LNG project was unquestionably the largest, most-difficult, most capital-intensive resources project ever undertaken in the history of a young country like PNG.
“It has brought the biggest and arguably the best global players in the hydrocarbon space to our shores,” he said.

Nautilus CEO opens up on PNG dispute

Nautilus Mining CEO, Michael Johnston,walks shareholders through the various points of contention between it, the PNG government and the launch of its Solwara 1 mining project.

By KIP KEEN
Saturday , Feb 23,  2013 


HALIFAX, NS (MINEWEB) - Nautilus Minerals has concluded quasi-secret negotiations with project partners over intellectual property rights in the hopes of resolving what has emerged as a major point of contention for the Papua New Guinea government in a broader dispute over the Solwara 1 underwater mining project and the state's 30 percent equity interest in it.
Speaking in a conference call on Thursday, Michael Johnston, Nautilus president and CEO, said that Nautilus has been willing to provide Papua New Guinea ownership of intellectual property rights. But the problem, as Johnston told it, was that many of the deeds covering proprietary technology and subsea mining methods, which Nautilus and several partners developed over the years, did not contain clauses allowing for a third party, such as the Papua New Guinea government, to come on board as an additional partner and owner of the intellectual property rights. 

Thus, Johnston described sensitive negotiations over the past few months in which Nautilus had to go to its partners, “household names” in the dredging business he gave as examples, to convince them to redraw the deeds to allow the Papua New Guinea government to gain direct 30-percent ownership of the intellectual property rights.
Now, Johnston said, Nautilus has redrawn the deeds with its partners and delivered the new terms to the Papua New Guinea government. Johnston said he had hoped to hear back from the government last week on its view of the new deeds, but that Nautilus has yet to be contacted by Papua New Guinea officials.
Nonetheless, Johnston, who said he had just returned from a trip to Papua New Guinea on the morning of the conference call, stated that he has high hopes about an overall resolution to the dispute. "We had a number of very good meetings with senior politicians and I'm quite confident that we will get resolution to this dispute in the not too distant future."

Apology to investors

While not a secret, hitherto Nautilus had not publicly explained in any great depth the importance of the intellectual property rights issue to the Papua New Guinea government. Thus, responding to a question from a private investor, Johnston was apologetic in describing why Nautilus had needed, in his view, to be tight-lipped about negotiations with its technology partners.
“It’s always very hard,” Johnston said. “When we’re negotiating with the other third parties involved on the IP (intellectual property) you can imagine it’s very difficult for us having conference calls, update calls like this. If I was to tell people that that particular piece of IP is quite critical to us closing this agreement, you can imagine someone’s ears would prick up.
“I apologize if we’ve come across as being a little secretive, if you like...but it has been commercially difficult for us to be able to tell people exactly what was going on with that IP.
“But now...we believe those deeds are sorted out and we’re now quite open about what those issues were. And, as I said, it goes right back to those design challenges that we had in the very early stages to develop and come up with the best system for seafloor mining. And, unfortunately, during that process we didn’t think at the time we would require another party’s name on the deeds.”
By getting rights to the subsea mining technology, the Papua New Guinea government will be allowed to use the same methods as Nautilus intends to employ at Solwara 1 on its own non-Nautilus projects. This fact raised the question of whether Papua New Guinea could then go and license the technology to potential competitors (assuming Papua New Guinea consents to the new deeds).
In response, Johnston said, the terms of the renegotiated deeds required approval from Nautilus and its partners were such a situation to arise. Further, Johnston noted that as part of the redrawn deeds, were the Papua New Guinea government to employ the technology on its own or through an approved partner Nautilus would get royalty payments from any other mining project.

30 percent participating interest

There also remains the issue of an outstanding bill of roughly $80 million that Nautilus maintains the Papua New Guinea government owes it for work on the Solwara 1 project.
Last year, as the dispute between Nautilus and the Papua New Guinea government escalated, the parties initiated a dispute resolution mechanism for arbitration on the matter, with the Papua New Guinea government alleging Nautilus had not met contractual obligations.
Johnston said a hearing date would be made in mid April, at which point there could be final resolution on the outstanding bill - a key reason why Nautilus has put the Solwara project on hold.

While Johnston would not comment on the matter, some participants on the conference call wondered if the resolution on intellectual property rights - not in the bag yet but seemingly closer than ever - might expedite an ultimate solution.
On this Johnston would only say that the arbitration process is “firmly underway in parallel with discussions, without prejudice, with the state."

Takeover, financing

Meantime, Johnston threw cold water on the takeover and financing proposals made by Ottawa businessmen Michael Bailey in early January that, as covered in these pages, contained numerous discrepancies. (See: Discrepancies, denials in C$238m hostile bid for Nautilus Minerals and “Ottawa businessman shifts tactic from takeover to financing in Nautilus bid.”)
“No formal bid was ever received by Nautilus during this process,” Johnston said. “None of our major shareholders were ever contacted. And then on the 15th of January Mr. Bailey proposed an equity line finance facility. On reviewing those terms it was obvious that they did not comply with TSX or Canadian corporate laws. And the takeover just quietly seems to have gone away.”
But that quiet may soon be broken. Bailey said in an interview Thursday that it was news to him that Nautilus had rejected the financing proposal, which he argued was in the best interest of Nautilus shareholders. He also maintained that, as previously stated in a press release, he intended to go ahead with a takeover, which he has previously claimed is fully funded by unnamed sources, if Nautilus did not agree to the equity line financing for $80 million.
"The whole situation is exactly how it reads in the news,” Bailey said. “If they don't proceed with the financing then we're going to proceed with the takeover.”
He then said, “We're in discussions with them about the financing."
Such discussions were not recent according to Nautilus chief financial officer Shontel Norgate. Norgate said in an email on Friday that “We have had no communication with Mr. Bailey since mid January.”

My life with the witch-burners

Fairfax NZ News

 Philip Gibbs, a Catholic priest of Lower Hutt, was celebrating Sunday's second mass last week at Mount Hagen Holy Trinity Cathedral in Papua New Guinea. Around 1000 people were in the congregation.
Days earlier, many of them had burnt a "witch" to death.

Man on a mission: Philip Gibbs has spent 40 years as a priest in Papua New Guinea.

They had tortured 20-year-old mother Kepari Leniata into confessing that she had used sorcery to kill a 6-year-old boy.
Leniata's death in the Western Highland's 40,000-strong city Mt Hagen was only unusual because so many were present and with cameras and mobile phones.
Gibbs, 65, an old boy of St Bernard's College in Lower Hutt, says it was hard to work out what to say at mass. "If you tell people they are ‘longlong' [crazy] to believe such superstition, many will just close down," he told the Sunday Star-Times.
"I spoke about how just one person is powerless in such situations and how we need to support one another to counter this as a group, and many, particularly the women, showed signs that they agreed."
Leniata's attackers were from the same community she lived in. When the boy died in hospital, apparently of a stomach ailment, a "glassman" or witchdoctor was hired for 1000 kina (NZ$560). He blamed Leniata and two women.
After horrific torture with hot irons, Leniata confessed to removing the boy's heart and sharing it with two other witches.
They doused her in petrol and burnt her in the city market. Two older women, trussed up and waiting to be set alight, were rescued by police.
Witchdoctors are paid well to identify witches.
"Divination is a lucrative job, and there is also the temptation to accuse others falsely just to get one's hands on the money," Gibbs says.
The Sorcery Act, enacted in 1971 when PNG was still a colony of Australia, defined good and bad sorcery and outlawed the latter.
Gibbs, who marked 40 years as a priest in PNG last December, advised the Constitutional and Law Reform Commission, which last year reported that it was a commonly held belief that sorcery was the cause of sickness and early deaths and that the act was not working.
Gibbs said attacks against witches have become more brutal in recent times. "It used to be that they would push someone over a cliff, something like that. They still ended up dead, but it wasn't the torture, like now."
He said witch-burning was not just a manifestation of violence towards women, though antagonism between the sexes might be a part of it.
"No, they are not savages, though some people, especially when it is mixed with alcohol and marijuana, do act in very inhuman ways, as was seen last week."
Last July, 29 people were arrested near Madang after they murdered seven people and ate them. They believed the victims were sorcerers.
Local MP Ken Fairweather blamed malaria. "You'll find any area where there is lots of malaria, lots of mosquitoes, you'll also have this propensity to have [sorcery] - that's associated with sickness, hallucination," he told the Australian Broadcasting Corporation. "If you've had malaria you'll know exactly what I'm talking about."
Last year Gibbs wrote a paper for Engendering Violence in Papua New Guinea, published by the Australian National University, noting women accused of witchcraft are seldom, if ever, raped, perhaps because to do so would expose a man to a witch "creature" that some say can reside in a woman's genitals.
He argued that people apprehending, torturing and killing a witch often consider themselves to have done something meritorious, ridding their community of a threat.
PNG's Catholic Church bans the sacraments and any role in church life to those who accuse others of being witches and who are involved in abusing, torturing or killing.
The tragedy is being exacerbated by the deterioration of law and order at the community level.
Gibbs said he tried to convince his parishioners to take a more modern and scientific view of the world "such as asking a medical doctor the cause of death", saying medical authorities need to be more open about causes of death, and in a country that often has no death certificate system, he wants one. Oddly, people will accept a death by heart attack; but not high blood pressure.
"Changing ingrained cultural attitudes and practices associated with witchcraft will require far more than teaching people scientific, verifiable explanations for sickness, death," Gibbs says.
He called for a restoration of trust between families and a collective response to protect the powerless.

Lebasi at large on the Laloki

This article was first published in The National Weekender on Friday, February 22, 2013

By MALUM NALU

Down by the banks of the Laloki River, at 17-Mile outside Port Moresby, is where you’ll find legendary journalist and writer Biga Lebasi, the last of the great scribes of Papua New Guinea.

This is the romantic allure of the Laloki which, over the years, has brought adventurers like writer and journalist Beatrice Grimshaw, and Hollywood star Errol Flynn to this place, under the shadows of the majestic Hombrom Bluff.

Lebasi on the banks of the Laloki River.-Pictures by MALUM NALU

It was Flynn, in fact, who forever romanticised the Laloki River in his bestselling autobiography My Wicked, Wicked Ways, with his account of how he seduced a beautiful young Papua girl.

“Sometimes, as I frolicked with Tuperselai by the riverbanks or lay with her in the soft sand at the shore, I thought I heard or sensed a subtle gura-gura mystique of the region,” he writes.

Lebasi swimming in the Laloki River

“Little people, they said, like the leprechauns of Ireland who watched out for you.

“Maybe it was only the eyes of the Melanesian natives spying on us.

“Tuperselai and I drifted.

“So, in our language of gestures, our smiles, closeness, Tuperselai and I made love and it was a beautiful thing.

“I was less alone and soft-aired Laloki River is one of my most-precious poetic memories.”

Lebasi and I were on the banks of the Laloki last Saturday discussing everything under the sun from Flynn and Grimshaw, the heady days of the 1960s and 1970s, politics, literature (Huckleberry Finn, of course, given the river setting), independence, and the media, to his pet project of translating hymns into the Suau language of Milne Bay.

Lebasi tells his story to me

Lebasi is a pioneering staffer of The National in 1993, started his journalism career in 1964 at South Pacific Post, was a founder of Air Niugini’s in-flight magazine Paradise, was my editor at the now-defunct Niugini Nius in 1988 when I was a 20-year-old cadet, and was famous for his Lebasi At Large newspaper column.

He and his former wife, Australia Sue Elizabeth Lebasi, bought this place from an Australian in 1975.

Their only child, a son named Lato, was born in 1976 and lived for only a day, something that haunts Lebasi to this day.

Lebasi's backyard with the majestic Hombrom Bluff towering in the background

“My former wife, Sue Elizabeth Lebasi, and I bought this place back in 1975,” he tells me.

“It was on a Sunday when we went up to the lookout at Varirata and were staring down at the valley.

“Sue looked at me and I said, ‘I wished I lived right down there, you see where I’m pointing’.

“She said, ‘ok’.

“Monday, she picks up the phone and says,’there’s a place’.

“To cut a long story short, we bought the place from an Australian ex-army guy.

“After 38 years, I’m selling it.

“I’m old, I’m 70, so I need a quite place where I can go ‘clunk’ one day.”

“There’s so much change.

“When Sue and I moved here, there was hardly anybody.

“Now, it’s packed full of people, most of them squatters.

“Things have changed, and I don’t think changed for the better.

“Things may have changed for the better for people crowded around here, but for me, I have to go on, find some greener pastures somewhere, maybe go back home.

“I’m sorry to leave, but I have to go on looking for a better place.

“I’m old, I’m 70, so I need a quite place where I can go ‘clunk’ one day.”

Old and young...Lebasi and me swimming in the Laloki

Lebasi was born on April 9, 1942, near Alotau to a mother from Aioma and a father from Suau in Milne Bay at the height of Word War 11.

Because of the heavy fighting going on, they were moved to Kwato Island, where young Biga did his primary schooling, and because of the strong missionary influence there, he became an avid reader and writer – values that have stayed with him all his life.

“At the age of 15, I went to Sogeri Secondary School,” he recalls.

“After six years, I applied to be, would you believe it, a doctor!

“I applied and never got back a reply.

“To this day, I’m still waiting for a reply.

“I decided one day to walk up Lawes Road and ask for a job.”

To cut a long story short, from those humble beginnings, came forth one of the most-colourful and prolific journalists and writers this country has ever seen.

“It was the road towards independence,” he reminisces.

“I wasn’t in the newspaper business, if I had been outside, I would have joined the Pangu Pati.

“If I hadn’t been in the newspaper, I would have been involved in a nasty situation.

“I’m glad that we were handed independence on a platter without any bloodshed.

“The white population in Papua, and New Guinea, were afraid that a Mau Mau situation, similar to what happened in Africa, would happen here.

“They moved back to Australia thinking that there would be bloodshed here.

“It didn’t happen!

“The white press wanted bloodshed, hey, Page 1 stuff, but they didn’t write about the friendliness of the people, calm.

“We should be proud of that.”

In 1975, Lebasi joined the advertising and public relations department of Air Niugini, PNG’s new national airline, and got to see the world.

He had stints with the prime minister’s department, Word Publishing, Niugini Nius, and The National in a very-colourful career.

In 1997, true to style, Lebasi was at large, returning home to Milne Bay where he lived like a hermit on the bare minimum until 2011, when he returned to Port Moresby to sell off his property along the Laloki River.

Now in the twilight of his years, he is saddened by all the corruption in the country, as well as declining education standards.

Lebasi in a reflective mood

“It really upsets me, sickens me, to see political leaders and church leaders who don’t give a damn about corruption, how to educate a new generation to become good citizens,” Lebasi says.

“Our education system is going down, the national high school and university standards are dropping.

“And if you don’t mind me saying, standards of media, both newspaper and radio, are going down.

“It saddens me.”

That, and of course his son, Lato,  who is buried at 9-Mile Cemetery.

“After all these years, I still miss my son,” Lebasi admits.

“Every now and then, when I drive past 9-Mile, I wave to him.”

And the Laloki River rolls on…till Judgement Day.

Laloki River at 17-Mile

Can God Save Papua New Guinea?

By THOMAS L. FRIEDMAN

Published: February 22, 2013

Thomas Friedman

What has been going on in Papua New Guinea is earth-flattening, and it has been on my mind ever since it began. What's important, however, is that we focus on what this means on the street. The media seems too caught up in worrying about their own skins to pay attention to how their people are doing. Just call it missing the battle for the bullets.

When thinking about the recent problems, it's important to remember three things: One, people don't behave like migratory birds, so attempts to treat them as such are going to come across as foreign. Migratory birds never suddenly shift their course in order to fit with a predetermined set of beliefs. Two, Papua New Guinea has spent decades torn by civil war and ethnic hatred, so a mindset of peace and stability will seem foreign and strange. And three, capitalism is an extraordinarily powerful idea: If corruption is Papua New Guinea's glass ceiling, then capitalism is certainly its flowerpot.

When I was in Papua New Guinea last Summer, I was amazed by the variety of the local cuisine, and that tells me two things. It tells me that the citizens of Papua New Guinea have no shortage of courage, and that is a good beginning to grow from. Second, it tells me that people in Papua New Guinea are just like people anywhere else on this flat earth of ours.

So what should we do about the chaos in Papua New Guinea? Well, it's easier to start with what we should not do. We should not let seemingly endless frustrations cause the people of Papua New Guinea to doubt their chance at progress. Beyond that, we need to be careful to nurture the seeds of democratic ideals. The opportunity is there, but I worry that the path to moderation is so strewn with obstacles that Papua New Guinea will have to move down it very slowly. And of course Port Moresby needs to come to terms with its own history.

Speaking with a young student from the unpopular Protestant community here, I asked him if there was any message that he wanted me to carry back home with me. He pondered for a second, and then smiled and said, nama es tubo, which is a local saying that means roughly, "If a son is uneducated, his dad is to blame."

I don't know what Papua New Guinea will be like a few years from now, but I do know that it will probably look very different from the country we see now, even if it remains true to its basic cultural heritage. I know this because, through all the disorder, the people still haven't lost sight of their dreams.

This article was not really written by Thomas Friedman and this site is a spoof of the New York Times. This generator was created by Brian Mayer with content from Michael Ward, used with permission

Oz duo win PNG licence

Josh Lewis 

Upstream Online

Australian duo Kina Petroleum and Cott Oil & Gas have been awarded a new licence in the Western Papuan basin, onshore Papua New Guinea.

The pair were successful in their application for licence PPL 437 which covers 18 graticular blocks over a 1104 square kilometre area.
Kina, which will take an 80% stake in the licence, said several leads had already been identified within the licence area.
It added those leads included potential extensions in the north of the acreage of prospects already identified in neighbouring licences, including the Ketu discovery in PRL 21 where Kina holds a 15% stake.
The firm work programme for the first two years of PPL 437 includes seismic reprocessing and acquisition of 50 kilometres of seismic data, with minimum commitments of A$200,000 (US$206,339.92) and A$3 million respectively.
Kina and Cott will also need to drill at least one well, with a minimum commitment of A$200,000, or carry out an additional seismic shoot, with a minimum commitment of A$3 million, if a suitable drilling target is not identified from the first seismic survey.
“The award of PPL 437 builds upon the recent awards of PPLs 435 and 436 and sees Kina take the dominant acreage position in the Western Papuan basin and we will look to attract partners to this acreage as we conduct activities in the near term and exploit the licence’s potential,” said Kina managing director, Richard Schroder.
“This position is consistent with our strategy to grow our footprint in the established and proven Mesozoic gas and liquids play of the Papuan basin and compliments our already strong position in the emerging gas play in the Eastern Papuan basin.”
Kina and Cott were awarded PPL 436 in December last year, just one month after securing a 50% stake each in PPL 435.

PNG farmers see cash in capsicums

By ABC PNG correspondent LIAM FOX

Papua New Guinea farmers are being encouraged to turn to more lucrative crops, as a national economic boom largely bypasses the rural sector.
While large parts of the world have been wallowing in the economic doldrums, PNG is experiencing an unprecedented boom. But the good times have not spread to rural and remote areas.
There, most people live and survive as subsistence farmers.

Growing demand

But an Australian-funded trial hopes to help them cash in on the boom by supplying the growing demand for fruit and vegetables the growers may not have attempted before.
Foreign investment in mining has helped fuel a decade of strong economic growth in the country. The cranes that dot the Port Moresby skyline are testament to the good times. 

But just 40 kilometres away, in the villages dotted among the rolling hills of the Sogeri plateau, there is little evidence of the economic boom.
Farmers are hoping to earn some real money by taking part in a trial to grow what they consider to be foreign crops.
Village leader Simon Iabana says: "We also want changes in our lives like in the city but it’s hard to get money or things like that."
To generate some income, his people grow ginger and sell it at the markets in the capital.
But farmers are hoping to earn some real money by taking part in a trial to grow what they consider to be foreign crops. They are getting ready to plant broccoli, capsicums and tomatoes.

Local capsicums being sold at Vision City.-Picture by MALUM NALU

Learn more

"We want this project here because we want to learn more," Mr Iabana says.
It will be their second crop - the first perished but researchers are learning from the villagers’ experiences.
Philmah Seta-Waken, of the National Agricultural Research Institute. said: "Some things we’ve learnt, like I learnt that pH (measure of hydrogen) isn’t good here, so we teach the farmers how to help their soil in terms of composting, manuring. We don’t have to go high-tech or anything, at their level."
There are six trial sites at three different altitudes funded by the Australian Centre for International Agricultural Research.
Down in the lowlands researchers will be growing tomatoes, capsicums and French beans, using different farming systems.
Back in Port Moresby people, pay a premium for imported fruit and vegies.
But the supermarkets would prefer to sell locally grown produce.

Kina Petroleum awarded new Papua New Guinea petroleum exploration licence

Friday, February 22, 2013 by Proactive Investors

Kina Petroleum (ASX:KPL) has secured a new exploration licence in the Western Papuan Basin, Papua New Guinea, in a joint application with Wondecla Limited.
Kina's interest in the block will be 80%.
The licence PPL 437 covers 18 graticular blocks of 1,104 square kilometres and borders PRL 21 to the north and east, where resources have already been discovered.
Kina has already identified potential leads with leads in the northern part including potential extensions of the prospects already identified as well as a lead ot he north of the Ketu discovery in PRL 21.
In the eastern portion of the licence, a lead to the South East of the Ubuntu discovery has been identified.
The company is well positioned to capitalise on potential infrastructure construction to develop the resources already discovered in PRL 21.
The firm work programme over the first two years of the licence comprises seismic reprocessing and acquisition of 50km of seismic data, with minimum commitments of US$200,000 and US$300,000 respectively.
It also includes either drilling a well with a minimum spend of $20 million or an additional phase of seismic with minimum spend of $3 million in place of the well if the first phase of seismic does not permit identification of a suitable drilling target.

CPL builds biggest supermart in PNG

Source: The National, Friday, February 22, 2013

By MALUM NALU

THE CPL group, Papua New Guinea’s largest retailing network, plans to open the biggest supermarket set-up by far in the country between November and December this year, a company spokesman said yesterday.
He said this after taking The National on a tour of the project site at the former Port Moresby Transport yard, just next to CPL’s Waigani Central Stop N Shop supermarket.

Project signboard yesterday.-Picture by MALUM NALU

“This is being constructed under Steamships Properties, now known as Pacific Properties,” the spokesman said.
“Nevertheless, only the fit-out costs is in excess of an estimated K20 million which CPL Group is responsible for.
“It is anticipated that the store will be a new experience to Papua New Guineans as it will be of international standard.
“The new Central Waigani will house all the retail brands of CPL Group.
“It will also have a multiplex cinema.”
CPL Group chairman Mahesh Patel announced last March that it was looking at running the “biggest and best supermarket” in Port Moresby and PNG.
“We’re going to build the biggest and best supermarket in the country,” he said.
“It’s a multi-million dollar project that will take about 20 months to complete.”
 “Steamships own the land, they build, and we lease it.
“We will sign a 15-year lease.”
Patel said the new supermarket would be twice as big as CPL’s flagship Stop N Shop at Waigani Central, which has an area of 2,500sqm.
He said it should not be compared to Vision City, which was a mega mall, as this would be a stand-alone supermarket.
“This thing (new supermarket) will be 5,000sqm,” he said.
“It will be twice the size (of Waigani Central supermarket).
 “There will be a few specialty stores.”
“We’re looking at a number of new initiatives.”

Local fruit wine hits market

Source: The National, Friday, February 22, 2013 

 

A NEW local product made from locally-grown produce and fruits has hit the shelves of major supermarkets and stores around Papua New Guinea.
Winestar, an Eastern Highlands-based company, uses local produce and fruits such as ginger, tamarillo (tree tomato), strawberry, lemon and elderberry to manufacture mild fruit wines.

Proudly PNG-Made Winestar products.-Picture by MALUM NALU

It is a subsidiary of Nowek Ltd, a long-established company in the highlands owned by Goroka Chamber of Commerce and Industry president Terry Shelley, whose prime interest is in coffee.
His daughter Sarah Shelley, who is the master brewer and brain behind Winestar, has travelled extensively throughout the world studying the art of wine-making and wants to take wine-making to the next level in PNG using local produce and fruits.
“Since the start the of company’s operations towards the end of last year, it has provided markets for the locally-grown produce and fruit, employment opportunities for mainly single women from the Kamaliki/Masumave area in Goroka and also has been involved in community activities in Goroka and Kundiawa,” she said.
“There are four different flavours – Roots Mangi Ginger, Strawberry Blonde Simbu, Mama Mia Tamarillo and Besti Elderberry – which come in a 3l pouch (a first for PNG), 2l bottle, and 370ml bottle,” she said.
“The wine product has been tested by the National Analysis Laboratory based at Unitech in Lae and the alcohol content is under 11% per volume, which is under legal requirement for public consumption.
“I intend to expand my operations to Kundiawa in the coming months, and hopefully to other centres such as Mt Hagen, Lae, and Madang before the end of the year.”

Parkop: K100 million road works to ease congestion

Source: The National, Thursday, February 21, 2013 

 

By MALUM NALU

TRAFFIC bottlenecks along the 8-Mile and 9-Mile areas in Port Moresby, where a major building boom is taking place, will soon be a thing of the past with K100 million worth of road works to start this year, says National Capital District Governor Powes Parkop.
He told The National that a flyover would be built from Kookaburra Street at Erima to Jackson Airport, and that the back road from Erima to Waigani and onward to Gerehu would soon be available to traffic.
“We are in the process of planning a flyover from Kookaburra Street across to the airport,” Parkop said.
“Once that happens, it will relieve all the traffic congestion there.
“It will be a four-lane road with a flyover, so it will ease the traffic.
“Our engineers have come up with some plans on how to reduce the congestion there.
“The work will start soon, especially widening the lane going up to 8-Mile with a clear two-lane road, and shutting down the traffic coming from the airport going into Kookaburra Street.
“Once we do that, it will ease the traffic there, but the long-term solution is to have a flyover, and a proposal for an underpass – something that our engineers are working on.”
Regarding the Erima-Waigani back road, Parkop said: “We will link Sir John Guise Drive to Kookaburra Street, and on to the airport.
“We’re also going to start planning to link the back that goes to parliament to Morata, and on to the university and Gerehu Stage 1.
“That will cater for the (Pacific) Games Village when it is built at the university.
“When Pacific Games comes in 2015, the athletes will be based at the Games Village and they can easily come out that way and on to Sir John Guise Stadium, Bisini, and other sporting facilities in the city.”
Parkop said Port Moresby required about K900 million worth of infrastructure development and overseas funding would be sought for this.

K100 million hydro plant set for launch in Bulolo

Source: The National, Thursday,  February 21, 2013 

 

By MALUM NALU

THE K100 million PNG Forest Products’ (PNGFP) Upper Baiune hydro power project in Bulolo, Morobe will start full commercial operations on March 2.
The revamped power plant is the oldest surviving power station in PNG since the Morobe gold rush days in the 1930s.
This is the first time that a private organisation will supply electricity to PNG Power.
“Testing and commissioning began on Dec 23, 2012 and the new power station is now actually operating and supplying power to PNG Power’s Ramu grid,” a PNGFP spokesman said.
“The project is a major undertaking for PNG Forest Products and is the first such project in PNG, whereby a hydro power station has been built by a private organisation, purely as a commercial venture to supply power to PNG Power,” the PNGFP spokesman said.
“It has an installed capacity of 9.4MW.
“In addition, the project is constructed on customary land, which has been sub-leased by the Katumani integrated land group (ILG) landowners to PNGFP, and therefore the Katumani landowners are also important partners in the project.
“This project also conforms to the PNG government’s public private partnership (PPP) policy concerning infrastructure development.”
The company has operated two hydro power stations at Baiune with a combined capacity of 5.5MW, which were built pre-war to supply power to the gold dredges.
Today, they supply the total power requirements for the company township of Bulolo and also Wau and Highland Products at Zenag.
“All the gold dredges were driven by electric motors and as more dredges were added, firstly the lower Baiune and then the upper Baiune hydro-power stations were built,” according to the company’s website.
“These power stations were sabotaged in 1942 as part of the Australian army’s Scorched Earth policy.
“Consequently, extensive rehabilitation work was required after the end of WWII.
“The electrical plant to rebuild the power stations was manufactured in 1944 and commissioned in 1946-47.
“However, a fire in 1984 destroyed the upper Baiune power station and was rebuilt in 1985.”
The Baiune hydro-electric power stations supply all the electricity consumed in the Wau and Bulolo areas.
Although the technology used is old, the equipment was manufactured to an extremely high standard.
The Lower Baiune station has operated continuously since 1947.