Basil: KPHL made profit in 2017

The National National

KUMUL Petroleum Holdings Ltd (KPHL) recorded a net profit of K170 million in 2017, an official says.
Minister for Communications, Information Technology and Energy Sam Basil said KPHL had not borrowed from any commercial bank since 2014 and there were no operating losses in 2016 as recently claimed by Opposition Leader Patrick Pruaitch.
“Comments attributed to Pruaitch are misleading at best and unbecoming of a former treasurer who should know better – given he was in Government and directly responsible for some of these initiatives,” Basil said.
“The Opposition Leader has misled the people of Papua New Guinea by saying KPHL had borrowed to pay dividends to State in 2016 and 2017 and also made a loss of K1.5 billion in the same period.”
According to Basil:

  • The K451 million BSP loan was taken in 2014 as part of the UBS loan transaction and not in 2016 or 2017;
  • KPHL had not borrowed from any bank since 2014 to date;
  • the BSP borrowing was part of the pool of funds put together (collar arrangements from UBS, KPHL’s LNG revenue, BSP loan) to serve the multiple purposes during the transaction; and,
  • The 2017 annual report states that the KPHL made a net profit of US$56.6 million (K170mil) in 2017 and not a loss.

He said the 2017 annual report referred to by Pruaitch KPHL had consistently made profits since 2014, including 2016, and there had been no operating loss in 2016 as claimed.
“The loss of US$149mil (K481mil) was a book loss that was recorded due to the fall in the share price of the Oil Search shares which reflected the fall in oil Price to below US$30/bbl in 2016,” he added.
“The US$30mil (K100mil) dividend paid in 2016 was not borrowed as claimed but funded from reserves carried forward from 2015, which was a stronger year compared to 2016 due to oil and LNG prices.”
Basil said while the company had made US$56.6mil (K170mil) net profit in 2017, the 2018 financials were expected to be even stronger due to recovery of oil and LNG prices.