Koim explains energy summit

The National Business

WITH the potential for further expansion and development of the country’s oil, gas and energy sector, stakeholders will be staging the country’s inaugural petroleum and energy summit next week to draw potential investment. The National’s Business Editor SHIRLEY MAULUDU spoke to PETER KOIM, the chairman of the Organising Committee of the Petroleum and Energy Summit 2017 about the event.

MAULUDU: Tell us briefly about PNG’s inaugural Petroleum and Energy Summit.
KOIM: I am pleased to say that preparations for PNG’s inaugural Petroleum and Energy summit are progressing well. Plans were first announced in October 2016 by the Ministry of Petroleum and Energy and PNG’s national oil and gas company, Kumul Petroleum Holdings Limited (KPHL). KPHL managing director Wapu Sonk also announced the summit at the Mining and Petroleum conference in Sydney in December. The summit is hosted by KPHL and has the endorsement of the Government. It has the support of the Ministry of Petroleum and Energy and the Department of Petroleum and Energy as per the memorandum of understanding signed in 2014 with KPHL. The event will be held at the Stanley Hotel in Port Moresby from  Feb 28 to Mar 2. It is being organised by the CWC Group, an international conference and training company with extensive experience in hosting Government-led oil and gas summits and LNG conferences around the world including the World LNG Summit and the World Gas Conference. The summit is expected to attract 500 delegates – half of it being international delegates mostly oil and gas players. The event has about 20 confirmed sponsors and will feature several exhibition booths.
MAULUDU: What relevance does this summit have to the country’s petroleum and energy sector?
KOIM: This summit is necessary as PNG’s oil and gas sector has been exporting since 1992 through the Kutubu oil project. PNG has been showcasing its investment environment through the participation and attendance of delegates at LNG and petroleum conferences around the world. We now feel the timing is right to host such a conference in the country so that we can bring LNG buyers, our investors and other people to see where PNG is and what PNG offers rather than just them hearing it from our delegates they meet overseas. We want to tell the world that PNG is not only producing LNG or clean energy to sell to our neighboring countries. We are also helping to reduce carbon emissions in the wider global environment.
PNG can be a world power moving forward, with some of the finest quality and cheapest extracted gas currently available. We are so close to one of the largest energy market and users in the world – Asia. This important meeting will help propel the development of PNG into the global market, to be an even larger LNG producer. This is a very exciting time for us as plans for unconventional resource development as well as plans for growth in the domestic power and downstream sectors will be discussed.
MAULUDU: Explain briefly why the committee chose the theme for this inaugural summit?
KOIM: The theme of the summit is Unlocking Papua New Guinea’s energy potential. The theme was chosen because PNG is endowed with different forms of energy source – geothermal, biomass, wind and solar – in addition to the oil and gas we export. The summit would give prominence to the energy sector because much of our energy source remain untapped. For example, reports indicate there is more than enough gas to underpin at least a two train LNG expansion for ExxonMobil. And that does not take into account the recent potential gas discovery at Muruk-1, where an appraisal programme is ongoing. The CWC Group will be bringing in international expertise to PNG and creating a platform which will enable PNG to market its extensive hydrocarbon reserves and energy related opportunities to the world for the first time. The summit will be made up of interactive discussions which will help to shape the country’s energy sector. We have a packed two-day programme with relevant issues to be discussed including domestic gas use, petrochemicals, power generation and other strategic development needs and aspirations for our country. The summit will provide a unique opportunity for Papua New Guineans to hear about current and future LNG projects. KPHL, as host of the summit, is expected to announce major plans and strategic directions for the country’s petroleum and energy sector. In addition, we will have speakers from Total, ExxonMobil PNG, Oil Search and our LNG buyers. The theme is an apt description of what these energy corporations are going to showcase.
MAULUDU: There will be some very distinguished speakers during the summit. What is the response like from industry players and other stakeholders in the lead-up to the summit?
KOIM: This is the first ever petroleum and energy summit to be held in PNG and we are attracting many high-profile industry players from around the world (both producers and customers), including our customers from Asia region notably JERA Inc Co, the largest buyer of LNG in the world from Japan. Japan is the biggest LNG buyer in the world and if that sort of buyer attends a conference in any country, it speaks volumes. It is definitely a vote of confidence in PNG’s potential, capacity and capability. The summit has confirmed 250 overseas delegates, which is also saying a lot about PNG. If you go online and visit some of the websites for similar summits in the region, the caliber and profile of speakers will indicate the significance and prestige of that summit. Our summit is no doubt up there with the best. Prime Minister, Peter O’Neill will be presenting the keynote address. Minister for Petroleum and Energy Nixon Duban and Minister for Treasury Patrick Pruaitch will also make presentations. This is a major milestone for the petroleum and energy industry in the country and KPHL is proud to be the host of such a prestigious event.
MAULUDU:  Why did stakeholders from the petroleum and energy sector decide to have a summit like this?
KOIM: Basically, the objectives of the summit are to:

  • Showcase the important role that PNG plays in the energy spectrum in the (Asia/Pacific) region;
  • focus on the contribution that PNG makes towards the development and use of clean energy (LNG, biomass) locally and internationally;
  • harness opportunities to promote and market PNG’s hydrocarbons resource base;
  • expose the medium and long-term opportunities for PNG to become a major LNG-producer in the region;
  • provide access to key international players into the dynamic energy  potential of PNG; and,
  • Provide links between resource owners and PNG to potential investors and energy technology providers.

The summit is also a platform to draw investment and boost the country’s economy. We are marketing the country, telling our investors that Papua New Guinea is an attractive investment destination. Conferences like this can have a ripple effect in our economy – our service providers such as hotels, taxis, transport service, retail outlets and telecommunications can benefit. This is a form of tourism as well. Overseas delegates can be exposed to our unique cultural diversity through artefacts sales and cultural performances. Delegates may also learn about our exotic holiday destinations and decide to visit them. We want Papua New Guineans to attend the summit too, because it will provide a unique opportunity for them to hear first-hand about the expansion strategy for the country’s energy sector.
MAULUDU: Where does Papua New Guinea sit in the global petroleum and energy sector?
KOIM: PNG has an advantage over Australian and US gas as it is liquids rich. And the gas has a higher heating value which makes extra revenue. PNG is also closer to the world’s biggest LNG markets in Japan, South Korea and China. Because of our geographic location, as well as the success of the PNG LNG project, PNG has become a favoured investment destination for Chinese and Japanese ventures. However, PNG remains a challenging place for international participants, especially with our rugged terrain, government processes and systems and social problems.
The low oil prices in the last year is working in our favour as production costs are reasonable. ExxonMobil Corp is looking at the expansion of its PNG LNG plant, which has been exporting for two years and is now producing at an annual rate of 8 million tonnes. Total SA of France will build a second project – Papua LNG. The Muruk discovery is close to the PNG LNG infrastructure and is located between the Hides and Juha gas fields. Subject to joint venture approval, a rig could commence drilling soon. In some parts of the world, projects are being abandoned due to costs or other infrastructure issues. Whereas, we have several projects that could receive licenses in the next year. That’s how attractive PNG is.
MAULUDU: Does the current Oil and Gas Act (1998) cater for the country’s energy sector as well in terms of its (energy sector) development?
KOIM: The Oil and Gas Act (1998) repealed and replaced the Petroleum Act Chapter 1998 which came from the post-Independence era.  The Oil and Gas Act role is to primarily regulate the development of the petroleum projects in the upstream and its associated facilities while maximising revenue for the State and landowners through our concessional resource development model. The Oil and Gas Act was undergoing development and the petroleum sector was at its infancy stage, and it served its purpose for that time it was enacted. However, it certainly needs some revision to reflect the change in PNG’s circumstances with respect to our domestic development needs. The critical areas driving the need for domestic consideration fall under the categories of domestic market obligation (e.g. how do we obtain a realistic percentage of gas for domestic electrification in a project), local content (how do we ensure we are maximising benefits for our people), and third party access (how do we tap into infrastructure to make energy more accessible).
There are proposed amendments, in the pipeline, so to speak, to make the Oil and Gas Act more current. These issues will be raised and discussed at the upcoming summit.
MAULUDU: How much are participants expected to pay to register?
KOIM: Registration fee is K3900 per person for the two-day summit including a gala dinner at the end of Day One. Registration will commence at 4pm on Monday February 27 at Stanley Hotel. Entry will be with passes that delegates receive after the registration fee has been paid. Anyone interested to register should ring 3202253.