KPHL to implement deal

By SHIRLEY MAULUDU
KUMUL Petroleum Holdings Limited is carrying out terms of the agreement discussed in Kokopo in 2009 regarding the PNG LNG project.
The agreement was negotiated between the landowners, provincial governments and the Government.
Managing director Wapu Sonk said the option to acquire shares in Kumul Petroleum (Kroton) Limited is part of a range of benefits agreed to by the Government and set out in the Umbrella Benefits Sharing Agreement (UBSA) for benefits of landowners and provincial governments along the footprint of the project.
“Under the UBSA, the State granted to these beneficiaries a commercial option to buy a 25.75 per cent of the shares in Kroton No 2 Limited, the special purpose company that held the State’s 16.75 per cent interest in the PNG LNG project,” Sonk said in a statement.
“We are not in a position to agree to any variations of the terms of the UBSA.
“That is between the parties who agreed to the terms of the UBSA in 2009. Our role is to implement the agreement that was reached in the terms expressed in the UBSA, and provide additional benefits for the landowners and relevant provincial governments if they elect to invest in Kroton.”
Sonk said while it was not within powers of KPHL to vary any of the terms, he welcomed the Government’s decision to extend to December the deadline for the beneficiary groups to exercise their options, to offer a discounted price for the option, “and to endorse KPHL offering finance for those beneficiaries who had not been able to provide purchase price for the option shares”.
He said all these initiatives would make it easier for the beneficiaries who wanted to exercise their option to be able to do so.
“The finance offered by Kumul Holdings is not intended to replace commercial finance.
“However, the poor economic environment and depressed LNG and oil prices made it obvious that landowners would be having difficulty in raising commercial loans,” he said.
“The board didn’t want to see any beneficiary lose out on their right to acquire their interest in Kroton.
“So they decided to offer a safety net finance package to make sure that any landowner who wanted to participate in an additional interest in the PNG LNG project through a shareholding in Kroton would be able to exercise their option. The loans can be refinanced at any time as LNG and oil prices improve.”
Sonk had said that the Kroton equity is the additional equity offered over and above what the State has already offered; free carried two per cent in the PNG LNG project.