THE Kumul Petroleum Holdings Ltd (KPHL) has explained to the Government how its share of PNG LNG project of US$1.3 billion (circa K5 billion) had been spent, managing director Wapu Sonk, pictured, says.
Sonk submitted the performance report to Prime Minister James Marape as the sole trustee/shareholder of the Government.
“The gross revenue was US$19.2 billion (more than K65 billion) including condensate sales revenue between 2014 and 2018,” he said.
He said a total gross revenue of US$1.3 billion (K5 billion) was KPHL’s share of proceeds from the 470 LNG shipments as at the end of last year.
In light of queries raised by stakeholders, members of the public and interested groups in relations to PNG LNG project revenues, especially the State’s 16.77 per cent stake in the project, Sonk said it was not a straight-forward arrangement.
Sonk urged the people of PNG to first understand how the project was structured as an unincorporated entity, the financing and marketing arrangements, project operational costs, project capital costs and other aspects of the project, which were paid before a final revenue for each equity partners was paid or distributed.
Of the US$19.2 billion (K65bil) in gross revenue:
- Operator cash calls (Opex and Capex) was US$6.3 billion or 33 per cent of the gross revenue;
- debt finance servicing of US$4.9 billion representing 26 per cent of gross revenue;
- royalties to project area landowners including facilities and pipelines totalling US$0.1 billion or 1 per cent of the gross revenue;
- development levies of US$0.1 billion (1 per cent);
- taxation (project tax to State) of US$0.4 billion (2 per cent);
- debt service reserve account of US$ 1.1 billion (6 per cent); and,
- Distribution to joint venture partners of US$6.3 billion including the Kumul Petroleum share.
Sonk said out of the K5 billion KPHL revenue, the national oil company remitted to the State K4.2 billion in the 2014 to 2018 period.
It is almost 80 per cent of the total KPHL revenue in that period.