Oil Search to undergo a strategic review, Newcrest remains positive about Wafi-Golpu and public consultation on internet pricing. The news you need to kickstart your week.

The Hides gas field is one of the seven fields associated to the PNG LNG project. Credit: Oil Search

Oil Search has released its second quarter report for 2020 and announced a 14 per cent increase in oil production for the first quarter of the year. Managing Director Keiran Wulff said that the company ‘is on track to achieve its production targets in 2020, despite the shut-in of the Hides gas-to-electricity (GTE) project during the quarter due to the suspension of operations at the Porgera gold mine.’

According to the report, informal discussion between the PNG State and the development partners for the P’nyang project (ExxonMobil and Total) were held earlier this year. (Oil Search)

***

Newcrest also delivered its quarterly report (30 June 2020), reporting a 7 per cent increase in gold production on the prior quarter. At Lihir, gold production was 11 per cent higher compared to the previous quarter.

With regards to Wafi-Golpu, the company said: ‘Newcrest, together with its WGJV partner, Harmony, looks forward to re-engaging with the State of PNG and progressing discussions on the Special Mining Lease for the Wafi-Golpu Project and is encouraged by recent statements by the Prime Minister of PNG that Wafi-Golpu is a priority project and that it will be advanced within the existing legal parameters of PNG.’

Telecommunications

The National Information and Information Technology Authority has announced a public consultation on wholesale internet pricing. Further information can be found here, with submissions due by 24 August.

State-owned enterprises

Kumul Consolidated Holdings (KCH) and the Gulf provincial government have signed two memorandums of agreement – one for the Purari Hydro Project and another for the Kumul Shipping Corporation. The Post-Courier reported that Sasindran Muthuvel, Minister for Public Enterprise and State Investments, said both projects ‘demonstrate the Gulf provincial government’s trust in KHC to liaise and work’ with overseas investors. KCH is the endorsed state nominee to lead and manage Kumul Shipping, ‘which will provide marine services and product transport for the Twinza LNG development.’

***

State-owned enterprises still owe about K1.1 billion in loans to Bank South Pacific. The Minister for Public Enterprise and State Investments Sasindran Muthuvel said during a presentation last week that some of these liabilities ‘were inherited’. He noted that ‘to date we are still owing that money to BSP. Still we are still paying K26 million per annum as interest. It is all coming from those legacy issues which [we] are currently facing’. (Post-Courier)

COVID-19

NBC News has reported that the PNG Government is ‘anticipating a supplementary budget in the third quarter of this year’. The news come after an increase in COVID-19 cases. ‘The Government will reprioritise expenditure in the anticipated supplementary budget, cutting back on expenditure, with non-key recurrent activities pushed back to next year to make savings,’ said Prime Minister Marape.

Infrastructure

Nine hundred million dollars (K3.12 billion) will be spent on improving Pacific towns and cities by the end of 2022, the Asian Development Bank (ADB) has announced. In its Pacific Urban Update 2020 the ADB details both the planned infrastructure projects and the ones already underway. Some of the planned developments include increasing building capacity for urban development and planning, such as in Port Moresby. (RNZ)

Banking

During its 2020 Annual General Meeting, Kina Asset Management Limited reported a net profit of K10.6 million for the full year. The company’s net assets stood at K74.6 million (an increase of 20.8 per cent compared with the previous year). However, for the year to 30 June 2020, the preliminary return on the company’s investments was minus 5.5. per cent.

Chairman Rabbie Namaliu said ‘whilst the negative return is disappointing, the company’s investments have outperformed their respective market benchmark indices. At the present time, there appears to be a disconnect between the distressed state of many leading economies and the relatively buoyant performance of financial markets. Leading fund managers are uncertain as to the outcome in the near term.’ (PNGX)

Foreign investment

Commerce and Industry Minister William Duma has said that there will be a new list of reserved activities and it will be part of the proposed changes to the IPA Act 1992.

‘We want to introduce a list that is balanced and fair to our people and investors. And we all should know we are a developing country; we still need to continue to rely on foreign expertise to take part in some of those activities so we have to be very careful to strike our balance,’ Duma said. (Post-Courier)