KPHL increases equity by 7pc

THE Kumul Petroleum Holdings Ltd (KPHL) has acquired a seven per cent increase in its aggregate equity to future joint exploration projects with Total SE after talks were held between the Government and the Papua LNG developer on the remobilisation of the project.
Following talks last week in Paris, France, KPHL managing director Wapu Sonk said the additional seven per cent free carried equity is on top of its current 22.5 per cent back-in rights.
This will effectively bring its aggregate equity to a near 30 per cent.
“Future joint exploration projects this deal will impact, include prospects such as the deep and ultra-deep offshore exploration blocks in the recently awarded PPL 576 and PPL 589 licenses,” Sonk said.
“The seven per cent free carried equity will allow Kumul Petroleum to jointly participate as a JV partner and access critical technical data without any financial votes.
“This much-needed and timely US$13 billion dollar (K48bil) capital expenditure (Capex) project by Total and its joint venture partners stands to turbo-charge and boost the PNG economy during this Covid-19 pandemic induced economic recession and add much more into the future.”
He said KPHL also expected the joint marketing efforts of the country’s entitlements from the Papua LNG Project and aimed to conclude the sales and purchasing agreements (SPAs) in the LNG market by the end of third quarter of 2022.
“Kumul Petroleum further acknowledges that another significant advantage for this cooperation with Total is that we will be able to leverage our respective strengths for our joint equity financing option,” he said.
Sonk said KPHL recognised the financial stress and challenges brought on by the Covid-19 pandemic and other intervening circumstances in the major markets, and would endeavour to leverage its combined synergies to attract major global financial institutions to finance its equity shares.
He acknowledged the leadership and foresight of both delegations, led by the Deputy Prime Minister Sam Basil and Total executive chairman and chief executive officer Patrick Pouyanné, in pushing the boundaries beyond the current Oil & Gas Act provisions, and accommodating the PNG Government’s wishes for greater national participation in resource development projects.
“Kumul Petroleum further acknowledges Total’s dedication and revised commitment in speeding up the Papua LNG remobilisation works with the aim to commit the balance of 2021 to pre-Feed works, and the launching of Feed in early 2022 in preparation for a final investment decision in 2023,” he said.
Pouyanne acknowledged the Government’s efforts to secure greater local participation.