KPHL extends agreement

 KUMUL Petroleum Group has announced that it has successfully extended the financing arrangement it has in place with the Union Bank of Switzerland (UBS) relating to its 10 per cent shareholding interests in Oil Search Ltd.

The National was advised via email by KPHL that the financing arrangement was with regards to the K3 billion loan and the extension for another three years. 

According to a statement, KPHL has successfully reduced the annual coupon on the financing arrangement to 3 per cent per annum. 

The previous rate was 4.95 per cent per annum. 

The financing arrangement continued to be secured on only the shares in Oil Search. 

This means, cash flows due to Kumul Petroleum Group from PNG LNG project continues to remain outside of this financing arrangement.  

Managing director Wapu Sonk, pictured, said: “We have taken this opportunity to extend the existing stable and low cost financing for the company’s investment in Oil Search, which is the right decision in the current oil price environment. 

“Most importantly, we have continued to limit any security for the financing to the Oil Search shares only.”

The Kumul Group’s investment in Oil Search indirectly increases stake of the group in the PNG LNG project and all oil and gas fields operated by Oil Search, especially where more than 95 per cent of Oil Search’s oil and gas assets are located in Papua New Guinea.

KPHL chairman Frank Kramer, added: “Kumul Petroleum recognises the PNG Government’s desire to be a long term strategic partner with Oil Search, which is one of the largest employers in Papua New Guinea. 

“The renewal of the financing arrangements highlights the commitment we have for this important strategic partnership. 

“The financing also gives us the opportunity to keep the shares in this trying oil price environment so that we will then be able to consider a more permanent solution when the oil price improves.”

KPHL, formerly National Petroleum Company PNG, is the national oil and gas company with exclusive rights to undertake all current and future oil and gas businesses of the State, including holding and monetising the State’s 16.57 per cent interests in the ExxonMobil led PNG LNG project.