ExxonMobil, Oil Search close LNG production facilites after quake, analysts expect kina to fall ‘over the near-term’, and agreement being finalised to allow Philippines farmers to grow rice in PNG. Your weekly digest of the latest business news.

Authorities say at least 11 people have died after a 7.6-magnitude earthquake struck the Southern Highlands and Hela Provinces on Monday morning, reports RNZ Pacific.  ExxonMobil PNG says its PNG LNG facility at Hides has been shut down as a result.

Oil Search reports its production facilities in the Highlands have also been shut down. PNG Loop reports that a landslip has blocked access to the giant Ok Tedi copper mine, in Western Province, but MD Peter Graham says no damage has been reported at the mine or the nearby town of Tabubil. The epicentre of this week’s quake was located in a rugged region near Mt Sisa, which is close to key infrastructure for the ExxonMobil-led LNG gas project. The quake struck at 5am local time at a depth of 35km in Komo-Magarima district.

The quake was felt as far away as Lae.

Where the quake struck. Credit: RNZ Pacific

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BMI Research, a subsidiary of the ratings agency Fitch says it expects the kina to weaken over the near-term, even though it has been stable over the last two years. Analysts say the BPNG efforts to defend the currency by selling foreign reserves are unsustainable. ‘Although PNG continues to run a huge current account surplus (in excess of 10 per cent of GDP), which is often misinterpreted as a sign of a healthy external sector, we note that this is far from reality as reflected by the shortage of dollars onshore’.

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The Philippines’ Agricultural Secretary, Emmanuel Piñol. Credit: The Inquirer.

The Philippines’ Agriculture Secretary Emmanuel Piñol will lead a delegation to Port Moresby on March 7, to finalise a proposed bilateral agreement allowing Filipino companies leasing PNG lands to plant rice for PNG. On his Facebook page, Pinol says any excess production could be shipped back to the Philippines. A team of 22 farmers will fly to PNG next month to start the development of a 100-hectare rice demonstration farm within the Seventh Day Adventist College compound in Port Moresby. Pinol later told a media conference: ‘The proposed project will not only ensure the Philippines a stable rice supply but it will also employ thousands of rice farmers and agriculture graduates from the Philippines.’

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The first series of APEC meetings this year has begun with 78 meetings underway until March 9. The First Senior Officials Meeting (SOM1) began last weekend, and about 3000 officials from the 21 APEC economies will be in Port Moresby for this SOM1 meeting, according to APEC ambassador Ivan Pomaleu. They will also fly to Goroka for a regional visit to experience PNG. Meanwhile, the APEC Expert Group on Illegal Logging and Associated Trade (EGILAT) is reportedly formulating a plan to combat illegal logging while promoting legal trade of timbers and its products.

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Mineral Resources Authority Managing Director Philip Samar reportedly says the Tolukuma Mine licence has not been cancelled, despite the operator of the mine and Singapore-based Asidokona Mining Resources Ltd being put into liquidation.

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The National Marketing Manager of Goodman Fielder, Jeremy Fry, says a new rice packing plant will open in Lae in April, as part of a plan to expand the sales across PNG of Skel Rice, which is imported from Vietnam. He told The Post-Courier the company is building a production facility in Lae.

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Oil and gas producer Santos has reported a full-year loss of US$360 million (K720 million) due to impairments on its Gladstone LNG project in Queensland and other assets recorded in the first half of 2017. However, Chief Executive Kevin Gallagher said the ‘underlying’ profit in 2017 jumped nearly five-fold to US$336 million, due to improved gas prices and reduced operating costs.

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Kina Securities has reported a profit of K30 million for the year ended 31 December 2017. The result compares with a profit of K41 million in the previous corresponding 12 month period.

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Greater Sunrise field. Credit: ABC

Australia and Timor Leste will sign a landmark agreement aimed at opening the way to share revenue from the A$50 billion Greater Sunrise oil and gas field in the Timor Sea at the United Nations next week. Details of the agreement have not been made public, according to The Age newspaper, but the Portuguese news agency Lusa reported in early February that East Timor could receive up to 80 per cent of revenue from the field which would secure its economic future for decades if the field is developed.

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Picture of the week

The runway at Komo Airport in the Southern Highlands was split in half by this week’s 7.6 magnitude earthquake. Credit: Rex Humbi via Facebook. Got a photo to share? Email editor@businessadvantageinternational.com