State to fund extra 10pc equity

By SHIRLEY MAULUDU
THE financing of the additional 10 per cent equity for P’nyang gas project in Western “will be taken care of” by the State through the Kumul Petroleum Holdings Ltd (KPHL), says Petroleum Minister Kerenga Kua.
The State will have 32.5 per cent share in the P’nyang gas project, as per the heads of agreement signed by the State team and ExxonMobil executives in Houston, Texas, United States recently.
Under the Oil and Gas Act (1998), the State is expected to take up 22.5 per cent in every petroleum project in the country.
But the State team negotiated with ExxonMobil for an additional 10 per cent for the P’nyang project.
“We will pay for anything extra,” Kua told The National yesterday.
“We will be making profit or dividends from that, so we have to pay for it.
“We are also developing plans to do that (finance the equity).
“This is the Government’s responsibility.
“Kumul Petroleum Holdings Ltd will take care of that responsibility.”
Kua was responding to North Fly MP James Donald’s statement that he was disappointed with the arrangement. “Now it is confirmed that we will pay for the 10 per cent additional equity that’s why the deal is at 32.5 per cent,” he said.
“Not surprising and nothing to celebrate about,” he said.
Donald said of the 22.5 per cent, the impact provincial governments, LLGs and landowners would be given 2 per cent to share.
“How can we all share the 2 per cent out of the total of 22.5 per cent equity?” he said.
“Then on top of that we will all be running around looking for money to buy the additional 10 per cent.
“Just more headache and more stress for ourselves.”
He claimed that he had been asking Petroleum Minister Kua to change the legislation since 2019 before talking about any future petroleum developments.