LNG project financing now in place

By DANIEL KORIMBAO
Editor-In-Chief, The National

The global financial crisis has wrought havoc around the world, with some of the world’s major banks like Lehman Brothers having collapsed, and others forced to merge or surviving with huge government bailout programmes.
Major economies are either in recession, or their growths have dramatically slowed.
Big companies around the world like Toyota of Japan have reported unprecedented losses, and have cut back production and sacked workers to stay afloat.
With a lot of uncertainty and some level of distrust hanging over the global scene, banks and financial institutions are refusing to lend money, and even viable companies are now in trouble or unsure about their future.
Against this very gloomy backdrop, some in government found it not unreasonable to describe it as a “coup” when it was announced that the government had secured the necessary funding from an international source to finance its equity in the PNG LNG project (map above).
The LNG project is a massive project which will cost about US11$ billion.
Project operator ExxonMobil and its partners plan to draw gas from reservoirs in the Southern Highlands province, and transport it by pipeline to the Konebada Petroleum Park outside Port Moresby where it will be processed and exported.
The government decided it would take up the full 19.4% equity in the project, and not sell it down.
It had to secure financing to take up this equity, and chose to seek the funds offshore, aware that failure could raise questions about the credibility of the entire project.
In November last year, State Enterprises Minister Arthur Somare, who had led the negotiations for funding, announced that a deal had been struck with International Petroleum Investment Company (IPIC).
An agreement was concluded by the Independent Public Business Corporation on behalf of the National Government with IPIC, which is wholly owned by the Abu Dhabi Government of the United Arab Emirates.
Essentially, the government under this agreement is exchanging its 17.56% stake in Oil Search, held by IPBC as trustee, for $A1.6 billion from IPIC under an exchangeable bonds arrangement.
The deal attracted its fair share of criticism from the Opposition and the Treasury Department.
But it also won applause from leaders of some financial institutions that attended the PNG Mining and Petroleum Conference in Sydney in December.
A legal action by Petromin Ltd threatened to derail the financial deal.
Petromin CEO Joshua Kalinoe believed his organisation was legally vested the power to advance the LNG project, and not IPBC.
The legal action was later withdrawn, removing an unwanted hurdle to the deal.
Last week, Minister Somare announced that IPIC had deposited 1.681 billion Australian dollars into a quarantined bank account in Singapore.
The account is ‘quarantined’ because the use of the funds will be exclusively for the purposes of funding the government’s equity and its contribution to the capital expenditure of the Project.
Funds will be made available when required as the PNG LNG Project proceeds from the current front end engineering and design (FEED) stage to project construction.
The LNG Project consortium led by ExxonMobil has set a timetable that will result in a final investment decision by the end of this year with project implementation to commence in early 2010.
Mr Somare reiterated the point to Members in Parliament last week that the PNG Government’s financing arrangement with IPIC provided an added element of certainty to the project, which promises to transform the national economy when gas is exported in 2014.
The finalisation of this financing deal also adds greater confidence around the Project, especially at this time when the Project is focused on tying up marketing, debt financing, and engineering, construction, and procurement contracts before Project Sanction in October and Final Investment Decision in December this year, the minister added.
Given the stage the PNG LNG Project is currently at in FEED, the Project’s eventual delivery commencing early next year will position Papua New Guinea as the newest gas supplier to the world.
According to Mr Somare, the PNG LNG project is prioritised as number five in the global pipeline of LNG projects earmarked for development.
In the Asia Pacific region, the PNG LNG Project is ranked number one.
Clearly, the Government is committed to ensuring that Papua New Guinea can commence LNG exports by late 2013 early 2014.
With financing for equity now securely in the bank, the government needs to move quickly to address the concerns of landowners, and to have in place the benefit sharing agreement.
Landowners in Southern Highlands, Gulf and Central provinces need to be satisfied about their involvement in this massive project.
The rest of PNG will also need to be assured of their benefit in this project.

Insect farm closes without warning

By PISAI GUMAR

 

INSECT Farming and Trading Agency (IFTA), the only insect collection, farming and trading agency in Papua New Guinea, has shut its operation in Bulolo, The National reports.

An insider, who requested anonymity, said last week the agency had laid off five employees without paying their final entitlements for reasons that were unknown.

The source said the agency shifted its operations to the rainforest habitat at the University of Technology in Lae last November. IFTA now owed insect farmers around the country, including those in Buka, Highlands, Oro, Sepik and parts of Morobe, payments for insects sold to it, the source said.

“It had also failed to notify the farmers of its new location,” the source said.

The insider said the Unitech Development Consultancy (UDC) shut down IFTA at Bulolo without prior arrangement and notice.

“It’s a slap in the face for the five women and the farmers who had contributed to the agency and the country,” the source said.

“The reasons for their actions remain unknown.”

The closure has left many rural insect farmers in a spot.

Most of them have been checking on the old office, only to find its doors locked.

Insect farming is a thriving business in the country – insect art frames are sold locally and dried species are exported to several countries.

It has collected and identified more than 7,000 species of butterflies and other insect species, including the largest Alexandra butterfly, the largest Hercules moth and largest wingless stick insect.

Attempts to get comments from UDC director Jeffery Zuzu were unsuccessful.

Another source said the company relocated to solve logistical problems.

Marriage

I received the story below from a friend. It’s quite touching, more so for me, as this week marks the first anniversary of the death of my beloved wife Hula.

When I got home that night as my wife served dinner, I held her hand and said, I've got something to tell you. She sat down and ate quietly. Again I observed the hurt in her eyes.

Suddenly I didn't know how to open my mouth. But I had to let her know what I was thinking. I wanted a divorce. I raised the topic calmly.

 She didn't seem to be annoyed by my words, instead she asked me softly, why? I avoided her question. This made her angry. She threw away the serving spoon and shouted at me, "You are not a man!"

 That night, we didn't talk to each other. She was weeping. I knew she wanted to find out what had happened to our marriage. But I could hardly give her a satisfactory answer; she had lost my heart to Dew. I didn't love her anymore. I just pitied her!

 With a deep sense of guilt, I drafted a divorce agreement which stated that she could own our house, our car, and 30% stake of my company.  She glanced at it and then tore it into pieces. The woman who had spent ten years of her life with me had become a stranger. I felt sorry for her wasted time, resources and energy but I could not take back what I had said for I loved Dew so dearly. Finally she cried loudly in front of me, which was what I had expected to see. To me her cry was actually a kind of release. The idea of divorce which had obsessed me for several weeks seemed to be firmer and clearer now.

The next day, I came back home very late and found her writing something at the table. I didn't have diner but went straight to sleep and fell asleep very fast because I was tired after an eventful day with Dew. When I woke up, after perhaps two hours, she was still there at the table writing. I just did not care so I turned over and was asleep again.

 In the morning she presented her divorce conditions:

•           She didn't want anything from me, but needed a month's notice before the divorce.

•           She requested that in that one month we both struggle to live as normal a life as possible. Her reasons were simple: our son had his exams in a month's time and she didn't want to disrupt him with our broken marriage. This was agreeable to me.

•           But she had something more. She asked me to recall how I had carried her into the bridal room on our wedding day. She requested that everyday for one month I carry her out of our bedroom to the front door every morning.

 I thought she was going crazy. Just to make our last days together bearable I accepted her odd request.

 I told Dew about my wife's divorce conditions. She laughed loudly and thought it was absurd. No matter what tricks she applies, she has to face the divorce, she said scornfully.

 My wife and I hadn't had any body contact since my divorce intention was explicitly expressed. So when I carried her out on the first day, we both appeared clumsy.

 Our son clapped behind us, "daddy is holding mummy in his arms..." His words brought me a sense of pain. From the bedroom to the sitting room, then to the door, I walked over ten meters with her in my arms. She closed her eyes and said softly; ‘don't tell our son about the divorce’. I nodded, feeling somewhat upset. I put her down outside the door. She went to wait for the bus to work. I drove alone to the office.

 On the second day, both of us acted much more easily. She leaned on my chest. I could smell the fragrance of her blouse. I realized that I hadn't looked at this woman carefully for a long time. I realized she was not young any more. There were fine wrinkles on her face, her hair was greying! Our marriage had taken its toll on her. For a minute I wondered what I had done to her.

 On the fourth day, when I lifted her up, I felt a sense of intimacy returning. This was the woman who had given ten years of her life to me.

 On the fifth and sixth day, I realized that our sense of intimacy was growing again. I didn't tell Dew about this. It became easier to carry her as the month slipped by. Perhaps the everyday workout made me stronger.

 She was choosing what to wear one morning. She tried on quite a few dresses but could not find a suitable one. Then she sighed, all my dresses have grown bigger. I suddenly realized that she had grown so thin, that was the reason why I could carry her more easily. Suddenly it hit me... She had buried so much pain and bitterness in her heart. Subconsciously I reached out and touched her head.

 Our son came in at the moment and said, dad, it's time to carry mum out. To him, seeing his father carrying his mother out had become an essential part of his life. My wife gestured to our son to come closer and hugged him tightly. I turned my face away because I was afraid I might change my mind at this last minute. I then held her in my arms, walking from the bedroom, through the sitting room, to the hallway. Her hand surrounded my neck softly and naturally. I held her body tightly; it was just like our wedding day.

 But her much lighter weight made me sad. On the last day, when I held her in my arms I could hardly move a step. Our son had gone to school. I held her tightly and said, I hadn't noticed that our life lacked intimacy.

 I drove to office.... Jumped out of the car swiftly without locking the door. I was afraid any delay would make me change my mind... I walked upstairs. Dew opened the door and I said to her, Sorry, Dew, I do not want the divorce anymore.  She looked at me, astonished, and then touched my forehead. "Do you have a fever?" She said.  I moved her hand off my head. "Sorry, Dew," I said, "I won't divorce.

My marriage life was boring probably because she and I didn't value the details of our lives, not because we didn't love each other anymore. Now I realize that since I carried her into my home on our wedding day I am supposed to hold her until death does us apart."

 Dew seemed to suddenly wake up. She gave me a loud slap and then slammed the door and burst into tears. I walked downstairs and drove away.  At the floral shop on the way, I ordered a bouquet of flowers for my wife. The salesgirl asked me what to write on the card. I smiled and wrote, I'll carry you out every morning until death do us apart.

 That evening I arrived home, flowers in my hands, a smile on my face, I run up stairs, only to find my wife in the bed - dead.

 The small details of your lives are what really matter in a relationship. It is not the mansion, the car, property, the money in the bank, blah....blah.blah. These create an environment conducive for happiness but cannot give happiness in themselves. So find time to be your spouse's friend and do those little things for each other that build intimacy. Do have a real happy marriage!

 

 

The 'wows' of unforgettable Wau

Captions: 1. The author (centre) with  colleagues Sampson Bonai (left) and Vii Killar at the start of the Hidden Valley Access Road at the back of Bulolo. Picture by SIMON ANAKAPU. 2. Panorama of the Bulolo and Watut valleys from the Hidden Valley Access Road. Picture by SIMON ANAKAPU.3. Welome sign just outside Wau town.Picture by RONALD DEL VALLE.

 

In July 2003, I became arguably the first Papua New Guinea journalist ever to walk the old Black Cat Trail between Salamaua and Wau, Morobe Province, which makes the Kokoda Trail seem like a Sunday arvo stroll in the park.

This is because it is not an established trail like Kokoda, on which hundreds of trekkers regularly tread, but a forgotten gold rush and World War 11 course that passes through some of the toughest and most-hazardous terrain in the world.

Leech and snake-infested jungle, moss -covered rocks and fallen tree stumps, precarious cliff crossings, and numerous river crossings make the Black Cat one of the toughest tracks in PNG and the world.

It is recommended only for the very-fit and experienced trekker.

Some Australian soldiers have described the Black Cat as the hardest walk they’d ever done.

 The Lonely Planet guidebook quotes a local expat as saying the Black cat is “suitable only for masochists and Israeli paratroopers”.

After five days of torture through leech-infested country, slippery logs and rocks, as well as numerous other obstacles straight out of a commando-training manual, we descended into kunai country and were rewarded with our first glimpse of Wau.

“Wau! Wow!” went through my mind as I glimpsed down on this famous gold mining township.

I wrote articles for local and international newspapers, magazines and websites – being then employed by the PNG Tourism Promotion Authority - and it has been greatly because of this exposure that the Black Cat has developed into a tourism icon over the last five years.

To this day I still dream of conquering another WW11 icon, the Bulldog Trail, which stretches between Wau and the Gulf province.

Last year, I again visited Wau and Bulolo, and certainly could feel the song in the air as we drove up the scenic Wau-Bulolo Highway from Lae.

There was a feeling of excitement and optimism akin to the historical gold mining days of the 1920’s and 1930’s.

The discovery of gold at Edie Creek above Wau in 1926 sparked off a gold rush of massive proportions which led to the exploitation of the rich deposits of the Bulolo-Watut river system by large-scale mechanised mining.

The Bulolo region was at the time one of the largest gold fields in the world.

A total of seven dredges scoured the valley floor, dredging thousands of tones of high grade gold-bearing ore.

Remote Hidden Valley near the border of Central and Gulf provinces has become a hive of activity as Morobe Mining Joint Ventures work on a renaissance project.

Evening over the Bulolo and Watut valleys as we drive back is a sight to behold as we watch the panorama unfold.

“This is God’s country,” remarks MMJV public relations manager Simon Anakapu.

And I couldn’t agree more!

Last Saturday, whilst in the office, my colleague and Wau-Bulolo veteran Yehiura Hriewazi told me that trouble had erupted in Wau.

The news broke my heart as places like Wau, neighbouring Bulolo, Watut, Aseki and Menyamya are very special to me.

Violence erupted in Wau last Friday and Saturday, leaving two people dead, several injured, houses and property destroyed, and forcing the temporary shutdown of the Hidden Valley gold mine and the evacuation of employees.

The incident comes just before Hidden Valley is to pour its first gold and could have severe repercussions for Papua New Guinea on the international mining scene.

A long-standing land dispute between Biangai and Watut tribes over ownership of the 2076 hectare McAdam National Park between Wau and Bulolo came to a head as the Watuts gathered in Wau in their hundreds and staged attacks on the Biangai villages.

The news sent shockwaves through Morobe province, Papua New Guinea, and the world, as so many expatriates worked or were born and raised in Wau.

Among these was Jamon Alex Halvaksz, assistant professor of anthropology at the University of Texas in San Antonio, USA.

He emailed me telling me of how distressed he was at the goings in Wau, as while in PNG, he had spent almost all his time in the Biangai villages of Elauru and Winima doing his research paper.

Prof Halvaksz was in PNG in 1996, 1998, 2000-2002, and again in 2005, working on his paper about the affects that colonialism has had on Biangai development aspirations.

It is a fascinating paper which touches on many things, including the infamous ‘Kaisenik Killings’ of 1926-1927, and could I not sleep for want of reading it on Monday night.

Widely reported and a common feature in miners’ monologues, the ‘Kaisenik Killings’ remain a significant event for contemporary figures in and around Wau and feature centrally in discussions with Biangai about the arrivals of whites.

It was quite ironic, and a frightening sense of déjà vu, that Kaisenik was burned to the ground by rampaging Watut tribesmen last Saturday.

“The history of Wau township in Morobe province, Papua New Guinea, is intimately linked with the development of gold mining throughout the region,” Prof Halvaksz writes in the abstract of his paper.

“The site of a series of gold rushes in the 1920s, Wau emerged as an early administrative outpost, a town complete with all the trappings of frontier Australian communities.

“In recent years, Wau has declined, and the Biangai communities reflect on this decline in ways that manipulate both the early colonial discourses and their own.

“In this paper I examine the gold rush, how early prospectors conceptualised the colonial project, and what Wau’s subsequent decline has meant to the Biangai who now pursue new mining opportunities.

“I trace these events and perspectives through historical and present-day discourses.”

Reading Prof Halvaksz’s paper gave me a whole new insight into the Biangai people and the history of Wau and the gold rush days.

He recommended quite a few papers about the Watut and Biangai by John Burton, who used to work for Hidden Valley, including one available online - http://rspas.anu.edu.au/papers/rmap/Wpapers/rmap_wp01.pdf - in which he writes about Watut social organisation.

His last paragraph is most telling.

My prayer, after reading all these, was that peace could reign once more in Wau so that outsiders like me can take our families there to enjoy its unmatched beauty.

 

 

Bulolo and Wau website

http://www.freewebs.com/bulolo_png/.

 

Wau and Bulolo are two of the prettiest and most-historic towns in Papua New Guinea with picturesque rolling hills and snaking rivers – which if they could speak – would tell you so much.

In the rivers and creeks, village miners are quietly sifting a fortune in gold dust, using crude wooden sluices made from bush materials and cheap metal pans.

The discovery of gold at Edie Creek above Wau in 1926 sparked off a gold rush of massive proportions which led to the exploitation of the rich deposits of the Bulolo-Watut river system by large-scale mechanised mining.

The Bulolo region was at the time one of the largest gold fields in the world.

A total of seven dredges scoured the valley floor, dredging thousands of tones of high grade gold-bearing ore.

And you can see the natural beauty and panorama of Wau and Bulolo – indeed God’s country – by visiting this website http://www.freewebs.com/bulolo_png/.

 

Enjoy!

 

 

Sorcery suspect handed in

By JAMES APA GUMUNO

MOGE Kimnika tribesmen in Western Highlands province have surrendered to the police one of their men wanted in connection with a double murder, The National  reports.

The suspect, who is in custody, was among six people who allegedly killed a man and his son late last month after accusing them of using sorcery to kill one of their tribesmen at Bun village outside Mt Hagen city.

Metropolitan commander Chief Insp Peter Roari said yesterday people had killed their own tribesmen in the province since last year after accusing them of sorcery, but not one suspect had been handed over to the police “even though the killings and torture had taken place in front of many people”.

He said on Monday, the Moge Kimnika tribesmen, led by upcoming leader and businessman Michael Onda, were the first to surrender to the police one of their own tribesmen allegedly involved in the killing of Anis Plak and in causing grievous bodily harm to his father, Plak Dua, who died two weeks later.

Chief Insp Roari said the surrender came about after several meetings the police had with the Moge tribe.

He commended Mr Onda and the community elders for taking the lead in the meetings and surrendering the suspect.

He said the suspect had been charged with two counts of wilful murder and would appear today at the Mt Hagen District Court for mention.

He said the five other suspects were still at large, and hoped they, too, would give themselves up.

Chief Insp Roari said he was happy with the Moge people for showing a good example to other Western Highlanders.

He said this clearly showed that there was good leadership in the Moge Kimnika tribe.

Papua New Guinea students make international appeal for universal education and gender equality

Picture captions: 1. Port Moresby Grammar School headgirl Alida Gubag discussing Millenium Development Goals (MDG) issues with New Zealand students during a PNG/New Zealand school video conference at the World Bank's PNG Office. The video conference last Friday involving students from the Port Moresby Grammar School and St Josephs International College was organised by the British High Commission. 2.  The Port Moresby Grammar School and St Josephs International College students discussing Millenium Development Goals (MDG) issues with New Zealand students during a PNG/New Zealand school video conference at the World Bank's PNG Office. The video conference last Friday involved students from the Port Moresby Grammar School and St Josephs International College and was organised by the British High Commission.

A group of Papua New Guinea students have appealed to the international community to give priority to universal education and gender equality.

The Port Moresby Grammar School and St Josephs International College students made the appeal last Friday at the end of an hour-long video conference discussion on the Millennium Development Goals (MDGs) with peers from schools in Wellington, New Zealand.

“The first is we’d like gender equality to be promoted and second is for the quality of education in all schools to be improved. We want the international community to do something to better facilitate the level of education to enable developing countries to reach the Millennium Development Goals (targets in 2015),” said students Freesia Wavine and Ferdinand Lambo on behalf of their PNG colleagues.

Their New Zealand peers passed on their concerns to the 300 regional and international leaders who attended the March 20-21 MDG symposium at Wellington’s Victoria University.

The UK Minister for the Pacific Gillian Merron and PNG’s sole woman MP and Community Development Minister Dame Carol Kidu attended and participated in the symposium.

The students’ discussions centered on the MDGs, especially MDG 2 on “achieving universal primary education” with the questions and subsequent discussions focusing on education in PNG, HIV/AIDS and violence against women.

Acting British High Commissioner to PNG, Colin Glass, said he hoped the students had fun and would take away with them the importance of the MDGs. 

The PNG students, who were made MDG Ambassadors and presented certificates of participation, thanked the British High Commission in both Port Moresby and Wellington for organising the video conference.

The students’ lively discussion concluded with the PNG side singing the National Anthem and their New Zealand peers reciprocating with their rendition of the Haka.