In brief: O’Neill expects loans of US$790m to ease foreign exchange pressure this year, and other business stories

Prime Minister O’Neill working on loan to ease foreign exchange pressure, domestic market obligation for future LNG projects, and Western LNG project likely to be stand-alone. Your weekly digest of the latest business news.

Prime Minister Peter O’Neill says the government is working on drawing down loans of US$790 m (K2.536 billion) this year to assist with the demand for foreign exchange, reports Loop PNG. He said the money would come from the World Bank (US$300 million), the ADB (US$300 million) and UBS (US$190 million). He said the World Bank and ADB loans would be at concessional rates and would go via the central bank to the commercial banks.

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Sam Basil. Credit: RNZ Pacific

The Minister for Energy, Sam Basil, saysDomestic Market Obligation (DMO) in future petroleum projects—whereby companies are required to provide a proportion of the gas to the local grid—will be compulsory and non-negotiable, reports The Post-Courier. Petroleum Minister Dr Fabian Pok added that although there was no provision for DMO in the PNG LNG Project, any other project that comes on stream will make sure there is a percentage gas reserve for the domestic gas market.

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Horizon Oil CEO, Brent Emmett, has told The National, the Western gas fields project will most likely be done as a standalone project away from PNG LNG Project infrastructure. He said that alternatives such as the Western Pipeline proposed by Kumul Petroleum Holdings were rejected due to uncertainties about commercial arrangements and possible delays for the project.

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The President of the Institution of Engineers PNG, Brian Alois, says road building costs are inflated because of bad engineering practices and poor accountability. He also told the National Planning Summit that the education system has focused on producing more engineers with degrees and less on technicians who play a crucial role in the actual road building.

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The CEO of the Cocoa Board of PNG, Boto Gaupu, has told the National Planning summit, the board wants to see total cocoa export earnings hit the K1 billion mark within five years. It is worth K300 million today, he said, adding the cocoa sector requires a total of K300 million to be injected into areas such as nursery establishment (K45 million), cocoa plantation rehabilitation (K30 million), quality improvement (K15 million), road infrastructure (K200 million) and ‘institutional capacity building’ (K10 million).

 

Puma Energy has agreed to pay the government K40 million for it not to pursue its claim against the company for unpaid goods and services owed to PNG Customs, under a Deed of Settlement, reports the Post-Courier.

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Highlands Pacific has recorded a net profit of US$37.4 million (K118.9 million) in the last financial year, compared to a loss of US$15.8 million (K50.2 million) the previous year. CEO Craig Lennon attributed the turnaround to an increase in the valuation of the interest in the Ramu nickel cobalt mine.

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A new K58 million commercial centre has opened in Mt Hagen. A joint venture partnership between Steamships’ property arm Pacific Palms Property and local business Tininga, the centre has more than 7000 square metres, consisting of four buildings, three warehouse buildings with mezzanine floors, and a supermarket building with office space above.

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The Prime Minister’s office reports the White House has confirmed that the United States President Donald Trump is coming to Papua New Guinea for the 2018 APEC Summit in November, 2018.

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Photograph of the Week

Drone footage taken by environmental organisation, Global Witness, reveals the extent of forest destruction in PNG. Credit: The Independent. If you have a photo worth sharing, please send to: editor@businessadvantageinternational.com

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