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Petromin buys into Elk/Antelope gas field

PORT MORESBY: Petromin Holdings Limited has bought a direct interest in InterOil’s Elk/Antelope gas field in the Gulf Province.

The government-owned entity has made initial cash payment as part of its continuing plan to fund 20.5% of the costs of developing the field.

InterOil Executive Vice President Christian Vinson described the Petromin buy-in as an important milestone in the development of the gas field.

“We hold very high hopes for Elk/Antelope, based on testing we have undertaken in recent months”.

“We believe the discovery has the potential to make a major contribution to the future economic development of the nation”, he said.

“On this basis we are delighted to have Petromin aboard”.

Recent testing has shown the Elk-4 site has a gas flow rate of 105 million cubic feet per day.

It is greatest flow rate from any exploratory gas well in PNG history.

Estimates show Elk-4 having a condensate rate of 1,890 barrels per day.

“The flow rate is a great indicator of the potential deliverability of the reservoir”.

“It gives a strong indication as to the quality and quantity of the Elk/Antelope discovery”, Mr. Vinson said.

InterOil is currently drilling the Antelope -1 exploration well.

It is intended gas from this field would feed the proposed Liquid Niugini Gas Project, of which InterOil is a foundation partner.

The multi-billion Kina development project would bring a wide range of economic benefits to the nation.

The initial phase would see a pipeline constructed from the Gulf Province to Port Moresby where a gas processing plant would be constructed near the InterOil refinery.

For further information please contact

Susuve Laumaea

Senior Manager Media Relations InterOil Corporation

Ph: 321 7040

Mobile: + (675) 684 5168

Email: susuve.laumaea@interoil.com

 

NEC APPROVES EMERGENCY FUNDS FOR DISASTER IN MARITIME PROVINCES

FOR RELEASE – Thursday, 11 December 2008

The Prime Minister, Grand Chief, Sir Michael Somare, today conveyed his deepest sorrows to families that have been affected by the high tides and waves that have hit some of the Maritime Provinces around the country.

In today’s emergency meeting, NEC has approved up to K50 million but immediately released to The Disaster and Emergency Services K20 million to provide relief assistance to people in affected areas.

Sir Michael said, “I know many homes have been destroyed and islands, beachfronts and villages in New Ireland, Manus, Autonomous Region of Bougainville, the two Sepik provinces and parts of Madang have suffered damage and serious loss of their properties.

“I will personally be visiting some of the affected areas over the next couple of days but urge open members from these affected areas to be on the ground to be of support to the families and to assess the type of assistance to give to your respective electorates,” said Sir Michael.

He further advised that Cabinet has given its approval for funds from members’ district improvement programmes can be used to provide relief assistance in each of the affected areas.

He said communications in some areas is slow resulting in the delay of official assessments from some of the Maritime Provinces.

In the interim, the Prime Minister advised that everyone in areas experiencing these high swells stay clear of the beaches and power lines on seafronts.

Indications from the National Disaster Committee and our National Weather Service are that our country is in the middle of a La Nina phase, where there are high seas which are generally normal this time of the year.

However the swells experienced over the last few days are far greater and the worst may not yet be over.

Sir Michael said, “I would like to urge everyone who is living along the coastlines of Maritime Provinces or on remote islands to move further inland or onto higher ground for safety.

I thank the PNGDF for the immediate steps that they have taken and call for cooperation among all relevant departments to make sure relief assistance is provided quickly to affected areas.

M T SOMARE GCL GCMG CH CF KStJ

Prime Minister

 

FORUM MINISTERIAL CONTACT GROUP SECOND VISIT TO FIJI

The Pacific Islands Forum Ministerial Contact Group made its second visit to Fiji this week. 

Ministers said their discussions with the Interim Prime Minister and other key stakeholders had been frank and informative.

Ministers expressed disappointment that the Fiji Interim Government had confirmed that it did not intend to hold elections by March 2009, in line with its previous commitments to Forum Leaders.

Ministers said the visit reflected Forum members’ continued commitment to constructive dialogue with Fiji, and to support and encourage Fiji to return to democracy, within the framework of the decisions of Forum Leaders.

While in Fiji the Ministerial Contact Group held discussions with Interim Prime Minister Bainimarama and the Interim Attorney-General, officials from the Electoral Commission and Office of the Supervisor of Elections, and political leaders including deposed Prime Minister Mr Qarase and Leader of the Opposition Mr Beddoes.

In accordance with the directions given to the Ministerial Contact Group by Forum Leaders in their Niue Communiqué, the Ministers’ talks focused on the progress of the Interim Government’s preparations for elections, developments in relation to the political dialogue process, and the likelihood of political consensus arising from it.

Ministers thanked the Interim Government of Fiji for its facilitation of the visit, and expressed the hope that their talks had contributed to greater understanding of the importance of the restoration of democracy without further delay.
The Ministerial Contact Group, which has been tasked by Leaders with continued monitoring of the situation in Fiji, will provide a report to Forum Leaders on its findings and recommendations in preparation for Leaders’ proposed special meeting, which is likely to take place in January 2009.

The Group comprised Ministers from Australia, New Zealand, Papua New Guinea, Samoa, Tonga (Chair) and Tuvalu. 
For more information, please contact Ms Andie Fong Toy, Director Political and Security Programme, Forum Secretariat, Ph +679 331 2600 or email andieft@forumsec.org.fj

 

Liquefied Natural Gas project to take Papua New Guinea into the future

By JASON SOM KAUT, who attended last week’s 10^th Mining and Petroleum conference in Sydney, Australia

THE Papua New Guinea Liquefied Natural gas project has the potential to underpin the nation’s development aspirations for the next 30-plus years and more.

It is the nation’s largest and most-ambitious development project since independence in 1975 and may well keep this adage for many decades.

Major players in the petroleum industry in the world are targeting PNG’s untapped gas reserves.

 Amongst them is ExxonMobil, which has a reputation to deliver projects within both schedule and budget.

 There is ever-increasing energy demand, particularly for gas, from China and India two of the fastest-growing developing nations in the region.

It was recently reported by the December 2008 issue of the international magazine Petroleum, considered to be the voice of the industry, that Petronet LNG - a consortium of Indian firms – has been actively seeking LNG and other gas assets around the world.

The magazine said, according to Indian press reports, Petronet was not only in negotiations with operators in PNG but was also considering a 5 million tonne per annum liquefaction facility of its own in PNG in order to secure gas exports to India.

Deputy Prime Minister Dr Puka Temu extended Prime Minister Sir Michael Somare’s invitation for interested investors to visit PNG while concluding the Grand Chief’s opening remarks during the Sydney conference, while Exxon Mobil revealed plans to bring over a whole bunch of investors on a tour to PNG early 2009.

The final day of the Sydney conference saw revelations of PNG getting a poor rating from the World Bank and others.

But yet, many others including internationally-recognised Societe General, international investors and bankers gave PNG a ‘thumbs-up’ as a conducive investment environment amidst a global financial crisis that has seen many developed nations enter into recession.

That is the extent of the world’s interest in the nation’s vast gas reserves and the PNG LNG project, which some consider to be one of the few bright lights in current dark times.

Rumors are that members of OPEC, world regulators of the global oil price, will be a part of the contingent expected to visit PNG soon.

The PNG LNG Project will triple economic growth through employment and wealth creation and substantially improve the living standards of the more than 80% rural majority.

 It will have a rippling effect on nearly all other sectors of the economy.

According to Paul Bafle, executive director of ACIL Tasman of Australia who presented an economic analysis of the pros and cons of the Project, PNG LNG project provided a great opportunity for economic and social improvement in PNG, but also posed great challenges for prudential government.

 “Large resource projects generate large cash flows, but don’t always bring wealth and economic prosperity to the host countries,” he said.

Mr Bafle stressed the need for proper planning and for measures to be put in place before the resource revenue started flowing in.

Oil Search managing director Peter Botten stressed on the necessity of involving landowners in the project at the earliest possible stage.

This, he added was one of the ingredients for success in the mining and petroleum industry in PNG.

Greg Anderson, executive director of the PNG Chamber of Mines and Petroleum which organised the biennial conference, highlighted the need to maintain relationships and market the nation’s potential.

 Much was said during the conference on the many positive structural changes in legal and governance issues in PNG.

But there are downsides to the project, according to Mr Bafle.

That is, if not planned properly, the effects could be devastating and see PNG step back 10 years in development and miss a golden opportunity to find its place among the leading nations of the world.

The 10^th PNG Mining and Petroleum Investment conference in Sydney,  Australia,  last week stressed the need for “prudent planning” amid a global financial crisis, which has seen most developed nations go into recession as world demand for energy and other necessities reach levels similar to the great depression.

PNG’s aspirations to commercialise its vast gas reserves are not new.

Past and present governments and numerous ministers in charge of the Petroleum and Energy department, notable among them Sir Moi Avei, attempted to commercialise gas over a decade ago.But now that is a thing of the past with the discovery of large condensates of gas reserves, some of which are of a very high standard, proving a technical headache in trying to harness the enormous pressures of the find.

InterOil also recently announced the discovery of massive gas reserves at its Elk/Antelope fields in the Western province and is optimistic that the find has the potential to underpin PNG’s second LNG project.

Leading the proposed project is global player and project operator ExxonMobil whose presence brings confidentiality to the project, encouraging investor confidence.

The recent announcement by the Government that it had secured the money needed to fully finance its 19.4% equity adds without selling down any Government equity nor put pressure on the budget further consolidates the confidence.

This was evident during the Sydney conference which saw a record 800-plus delegates from around the world attend the three-day event.

But while the positives have been highlighted many times, over it’s the negatives that need to be addressed.

Two of the notable ones are to ensure proper processes, procedures and policies are put in place to guide the dispersing of the enormous revenues that will flow in, estimated to be about US$800 million per year.

The other is that mining and petroleum reserves, non-renewable as they are will not last forever.

Leaders need to stop the bickering and the power struggles and start working together for the nation’s benefit.

According to National Planning Minister Paul Tiensten and State-Owned Enterprises Minister Arthur Somare, the revenues would be placed in Trust Accounts and be chiefly used to upgrade infrastructure and provide other essential services in rural areas, including health and education.

A proactive approach needs to be taken now to involve landowners at the earliest stage.

 It is commendable that ExxonMobil announced plans to develop the technical expertise of Papua New Guineans to supply labor to the multi-billion kina project.

 Education and training is a priority that must be enhanced as the human resource will last for generations after the non-renewable resources run out.

But the State and ExxonMobil need to clearly spell out to the people and the nation how they will benefit in spin-offs and labor supply and to what extent those benefit will curtail.

As it was stressed during the conference in Sydney, prudent planning is vital to the smooth progression and success of the PNG LNG Project for everyone’s benefit.

 

 

Mount Hagen fuel crisis due to landslip

PORT MORESBY: InterOil’s Mount Hagen depot is now without fuel after a recent landslip cut the Highlands Highway at Mindima, Chimbu Province.

The situation has been described as “serious” and no new fuel deliveries will be possible into the region in the immediate future.

Other centres in the Western and Southern Highlands and Enga Provinces including Mendi, Wabag and Porgera are also affected.

InterOil Products Limited General Manager Peter Diezmann said fuel tankers are unable to negotiate the damaged section of Highway.

“The landslip has caused severe damage to the road surface over a distance of about half a kilometre.

“The area is extremely unstable and the Highway is totally impassable to heavy vehicles such as tanker trucks.

“Because of this we are unable to resupply service stations and fuel depots throughout the region.

Mr. Diezmann said that stocks of diesel and gasoline, in place before the landslide, have now been exhausted.”

“Reserves of Jet A1 at Kagamuga airport are also critical and we remain in contact with our aviation customers to keep them up to date with the situation,” Mr. Diezmann said.

Mr. Diezmann says he has no information yet as to when the road may be repaired sufficiently to allow deliveries to resume.

“The tankers can only start moving again when authorities advise that the highway has been re-opened and is safe for heavy vehicles”.

The landslip occurred fifty kilometres from where a similar incident closed the same highway for a fortnight in May.

The current road closure will have a serious effect on the entire region.

About 1.5 million people live in the three Provinces affected.

For further in formation

Susuve Laumaea

Senior Manager Media Relations - InterOil Corporation

Ph: 321 7040

Mobile: 684 5168

Email: susuve.laumaea@interoil.com

 

 

PUBLIC AFFAIRS BY SUSUVE LAUMAEA

Rich land of luckless majority

PAPUA New Guinea is a nation we all fondly call home. For the majority of us it’s “our” only home. There’s no other home offshore or a real estate or permissive residential status in a second, third or fourth country. Yes, we are diehards true and true. We live here; travel the world a bit for education, business or pleasure and come straight back home. At least I can say that for myself without fear or favour. The important consideration, though, is that we must all work at getting the place we call home attractive, comfortable and free from unwanted lawlessness and disharmony. We must improve our health and education system so that there is no need for privileged individuals like politicians and business people to go looking for better health services and education for their children offshore. The best services can be created here for all of us to share. Our leaders, decision-makers and planners have to get the nation’s priorities right. We have to work at adding value to our lives b y providing world class basic life support services for every man, woman and child of PNG. We must live a full, healthy and prosperous life and in peace and harmony. We must change our traditional mindsets of “mob rule and domination” and we must learn to respect other Papua New Guineans’ right to ownership of land, property etcetera and we must respect everyone else’s rights and freedoms as enshrined in our National Constitution. In truly making PNG a place we all can proudly call home, it is crucial for the majority of loyal and patriotic Papua New Guineans to understand the diversity of the society we live in and work at getting the body politics of this country right. We have a lucky country. We have a rich land. But sadly enough, we are also a land of the luckless majority. Only a handful of powerful and influential politicians and business people dominate the economic life of our country. They are the ones with the fat bank accounts, the glass houses on the hill or a second or third home offshore. There is opportunity galore for wealth creation for all of us but a lot of the time our own naivety and ignorance of the intricacies of conducting and participating competitively in modern business, commerce and trade defeats us or the windows of opportunity close as fast as they open to let in the unscrupulous already well to do minority. Not fair at all even if it is a case of the “early bird gets the worm”. Many economic, political and social commentators describe PNG as the last natural resources frontier and the land of milk and honey. But milk and honey for who? The vast majority of Papua New Guineans remains passive by-standers and completely denied of partaking in the consumption of the so-called milk and honey. The laws are made in such a way that it favours the finders of the treasure or finders become keepers and owners. In oil and gas projects the State optionally gets to acquire up to 22.5% equity on behalf of people and nation – no more. In mining the State optionally acquires up 25 percent equity – nothing more. Is that fair split of the milk and honey? A great many things in this country have to be put right. Oil, gas and mining resources laws have to be radically looked at to ensure a fair and equitable regime of benefits accrues to the people of PNG. That is one area that requires critical appraisal. Health is another and education -- where that “simmering volcano of denial” continues to rise higher and higher each year as more and more young people are spewed out of the formal education system to join the tens of thousands before them at the bottom of the unemployment pyramid. As I write this article I am mindful of the fact that another school year has come to pass. Education Department statistics show the total number of schools nationwide to be near 10,000, the number of children attending school to be around 1.5 million annually out of a youth population of around 3.5 million with National Government annual financing at around K500 million. The statistics speak volumes. Education is not a priority in reality. Why not? Read on. With the ending of the 2008 school year, an educational chapter has ended forever for tens of thousands of young people at Grades 6, 8, 10 and 12 and a new one may open for a minority of “lucky” ones to continue on to Grades 9, 11 and to universities and other tertiary colleges of higher learning and skills training. Is it a fair system of education that spews out tender aged young people year after year at Grades 6, 8, 10 and 12 with zero worldly skills to fend for themselves in a harsh, employment opportunity-starved, fast-paced, modern and complex monetary economy? Right now in Papua New Guinea, the number of available decent paying jobs for persons with Grade 6, 8, 10 and 12 education levels is negligible. Even college and university educated young Papua New Guineans cannot get decent jobs. The threateningly increasing groundswell of young people without trade skills and qualifications to give them a fighting chance in the employment market is a serious national problem. Be wary Government. Do not plead ignorance when one fine day – if not soon – the youth of this nation will vent their anger and loss of opportunity, time and space by resorting to anti-social activities. Their reality is not about economic or political stability. Their reality is not about multi-billion dollar liquefied natural gas project developments or the government “cash-flushed” bank account. Their reality and that of their parents is about how to solve or break the suffocating cycle of their abject poverty and their  “hand to mouth” existence in the face of numerous adversities that include unemployment, overcrowded housing, high-priced basic food and consumables at supermarkets, trade stores and local fresh food markets, high cost of transportation, unreliable electricity and water supplies, law and order problems in their respective communities and – in the case of those that are long term urban residents -- domination and dispossession of “their space” by the never ending flight of humanity from poor, trouble-proned or opportunity-starved rural provinces to urban centres. There is a huge simmering, restless, bored and ungainfully engaged build-up of tens of thousands of productive and reproductive youth generation waiting to be gainfully drafted into national development service. No one in authority – it seems -- is serious enough or is truly committed to take up the plight of the unemployed youth population constrictively and decisively. A nation’s wealth is not measured only by money in the bank and the abundance of renewable and non-renewable natural resources in the ground, in the sea and on the land. A nation’s wealth and its perpetual sustainability is guaranteed big time by the health, wealth and level of education and sophistication of its people. The higher the level of health, wealth education, sophistication, literacy and numeracy, the higher shall be the productive input of people to the overall gainful development, prosperity creation and progressive outcomes for the nation. There is a serious lack of commitment by relevant agencies and ministries of government to human resource development, health and education of Papua New Guineans as the basis upon which this nation shall be developed and shall prosper in the long run. Right now, the nation’s most productive and reproductive generation is being rendered unproductive by a system of education that claims to be “outcome based” rather than being “objective driven”. Change of mindset and the way we deliver education is necessary and urgently needed – now, not later. The reality of today is that we in Papua New Guinea becoming a dysfunctional nation of functional illiterates. What does that statement mean? Simple. Majority of Papua New Guineans claiming to be educated can speak English, Tok Pisin and Motu but they do not know how to read, understand and write what they speak. We have young people between the ages of six year-olds up to say 30 year-olds receiving various categories and levels of education from elementary level right through to university but are not receiving skills in reading, comprehension and writing. They are not receiving higher quality education than the generation of Papua New Guineans who went through the education system up to around 1980. Let’s be realistic and be self-critical. Standards of education – teaching and schooling – have fallen dramatically. Anyone who wants to defend the present system of outcome based education is merely supporting a system that is not user-friendly or objective-driven.  Listen to young and not so young people in conversation groups, on radio or television and hear how they pronounce the English language. The pronunciation is atrocious and you begin to wonder what sort of English teachers are teaching our young people at schools and universities these days. Okay, English is not our first language but at least we can learn to speak and write it with some degree of perfection. It is a major international language for trade, finance, law, diplomacy, commerce and industry. Our National Constitution and our laws are all written in English and us as a people must learn, read and understand English in order to proficiently comprehend what the Constitution and the laws are about and what they mean to each of us as citizens. Take this example for instance: A young man who called himself Peter Doe gave the United States education system a bad case of the shakes. In 1974 he sued the San Francisco Unified School District for half a million dollars (US$500,000) because it awarded him a high school Diploma/Certificate even though he was barely literate.  Tested both before and after graduation allegedly indicated that he could hardly read and write when he received his school certificate.  He contended that, in the outside world of work, he quickly found himself handicapped by deficiency in writing and reading skills.  He wanted to work as a clothing salesman but, in applying for jobs, he found that he could not cope with application forms. Peter Doe was white, middle class student who attended his classes regularly and was not considered a disciplinary problem. What should worry parents, employers and educators today in Papua New Guinea is how many Peter Doe’s does our education system produce every year?  There are probably thousands and thousands of high school graduates, like Peter Doe who can barely read and write. Peter Doe’s case illustrates a broad worrisome trend for us in PNG. It is a matter of reality that there is general low state of literacy and the ability to read and write clearly among our young people graduating from high schools.  And this state of affairs prevails at this time when the complexity of our institutions calls for ever higher literacy just to function effectively.  We must cope with employment and insurance application forms, application for visas and medical coverage forms, application for credit cards, auto licensing forms and so on.  If we cannot then we become what are known as functional illiterates. This scribe cannot stress enough the point that Papua New Guinea is at risk.  Our once unchallenged pre-eminence among fellow developing Pacific Island nations in commerce, industry and science is being overtaken by competitors throughout this region.  While we can take justifiable pride in what our education system has historically accomplished and contributed to PNG and the wellbeing of its people, the educational foundations of our society are presently being eroded by the rising tide of mediocrity that threatens our very future as a nation and people.  What was unimaginable a decade ago has begun to occur - our neighbours are matching and surpassing our educational attainments.  If unfriendly foreign power had attempted to impose on PNG the mediocre educational performance that exists today, we might have viewed it as an act of war. As it stands we have allowed this to happen to ourselves. We have even squandered the gains in students achievements made in the wake of sputnick challenge. Moreover, we have dismantled essential systems which helped make those gains possible -- the removal of grammar from English language course.  We have since independence, in effect been committing an act of unthinkingly, unilateral educational disarmament. The Department of Education and its entire educational system seem to have lost sight of the basic principles of schooling and of the high expectations and disciplined effort needed to attain them.  We must reform our educational system in fundamental ways and review our nation’s commitment to our schools and colleges throughout the length and breadth of our land. Writing with easy clarity is crucial to our capacity to formulate our thoughts or communicate on the job.  How many of our graduates can easily do that today?  Yet ineptness at writing is found at all levels of our educational system. Just take a look around you and what do you see on the streets of our main urban centres, at urban PMV stops, in shopping centres, city informal markets and designated markets or sprawled out and fast asleep under leafy shady trees in public parks? These are unemployed Papua New Guineans “pushed out” by the education system without basic life-support skills to do anything worthwhile except eat and sleep, buggerize around or plot and execute illegal and anti-social pursuits that go against the law, good order and community harmony. Exploitation by unscrupulous business owners in the night club, fast food and tardy retail businesses is widespread. They work long hours as  security attendants, waiters and waitresses, cleaners, barmen and barmaids and just to get paid the urban minimum wage of K90 per fortnight with no contributions made on their behalf to superannuation funds or overtime for extra work hours and or for working during public holidays. That’s criminal and Labour Department investigators are nowhere to be seen to correct the work place injustices and when they do turn up they are enticed and hoodwinked into submission by the unscrupulous business owner. Government leaders and decision-makers cannot and must not remain inactive and silent when our young people are being mistreated this way. They are this nation’s productive and reproductive generation who – through no fault of theirs – are pushed out by an erratic education system at Grades 6, 8, 10 and 12. Help them to become constructive and useful citizens of PNG. They must not become this nation’s “lost generation”. Go to any Port Moresby night club or cheap fast food outlets run by one dominant group of people from the north of the equator to see how badly and poorly young Papua New Guineans are treated by people who can hardly speak or write a word of English. A young Papua New Guinean – even with a grade 8, 10 or 12 education -- is far more conversant and maybe literate to a degree in the English language than the “parasitic fly-by-night” owner of a night club or cheap imported goods merchant or the fast food entrepreneurs. Don’t get this scribe wrong. There are some exceptionally well meaning business people from up north who have good money to invest in our national development and have worthy technology and skills to pass on to Papua New Guineans. But the trashy opportunity-seekers and predators – which cheat our people with their cheap fast food recipes and substandard clothes, shoes, jewelry with imitation labels, electronic gadgets, CDs and DVDs – should never be allowed to take a hold on micro-economy of this country. They should never be allowed unscrupulously exploit our way of life, our standard of living, our dignity as humankind or our gullibility. Domination of a nation and its people by unscrupulous business predators is the most intolerable form of injustice, inequality and denial ever. Decent high quality education supported by top level human resource development and skills acquisition stand out as an effective insurance against exploitation of our children’s and their children’s future inheritance by unscrupulous aliens. Outsiders must never take advantage of our innocence, ignorance, identity, dignity, subservience, passiveness, rights and opportunities. The present generation has a duty and responsibility to ensure that our children and their children’s future is not mortgaged, enslaved or irrevocably transferred to aliens for a song and a dance. But take heed. The “volcano” of unemployed youth is growing higher, getting a lot more restless and worst is yet to come if the pressure is not released soon rather than later.

• Share your thoughts and comments with the writer at mailto: suslaumaea@gmail.com or send SMS to: B-Mobile #: 684-5168.