World Bank commits K70 million to help Papua New Guinea in its fight against COVID-19, the Minister for Petroleum gives an update on resource projects and Oil Search successfully completes its equity raising. The business news you need to know today.

Prime Minister James Marape [second from left] welcomed the new Australian High Commissioner to PNG, Jonathan Hugh Philp. Credit: Australian High Commission/Facebook

Transportation

David Manning, the State of Emergency Controller and Police Commissioner, has listed the valid reasons for air travel in and out of PNG. These are: 1) students returning home or to their educational institutions, 2) persons returning to their place of residence, 3) essential services, 4) essential exempted business travel and 5) emergency transport, including the repatriation of deceased persons. The Controller must approve all travel arrangements. (LOOP PNG)

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Pacific Towing (PacTow) is using its fleet to keep food and medical supplies coming in to PNG. PacTow has also advised marine service providers that it has vessels and crews available to support them if required. General Manager, Neil Papenfus, explained in a statement that although operators are struggling to re-crew because of the COVID-19 pandemic and the travel restrictions imposed internationally, PacTow doesn’t have these re-crewing problems given the composition of its workforce.

Finance

The superannuation fund Comrade Trustee Services Limited (CTSL) has made a cash flow reversal and announced a 6.5 per cent credit rate (K15 million is to be paid to member accounts). The fund also announced a 4.7 per cent growth from 2018 and a net surplus of K31.473 million. (LOOP PNG)

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PNG’s Treasurer, Ian Ling-Stuckey, has raised concerns about the use of the K23 million the government released to aid in the fight against COVID-19. Ling-Stuckey reportedly said that a large amount of that sum wasn’t used for what they intended it and instead was spent on hire vehicles and media consultants. ‘The funds our multilateral partners are giving to be used to help our people in the COVID-19 pandemic must be used for that purpose and nothing else,’ the Treasurer added. (LOOP PNG)

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Credit: Asian Development Bank

In its recently released 2020 Outlook, the Asian Development Bank suggests PNG’s growth forecast for this year is weak because of the COVID-19 pandemic, lack of clarity when it comes to large resource projects, and other issues.

The report suggests ‘COVID-19 is expected to have wide impact in 2020, with manufacturing struggling under disruption to supply chains; transportation, accommodation, and food services hit by restricted international travel by air and sea; and wholesale and retail trade hampered if imports of goods from the PRC [People Republic of China] and elsewhere are delayed.’ (ABD)

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In response to PNG’s state of emergency (SOE), the Investment Promotion Authority (IPA) has exempted companies from strict deadlines on annual general meetings, presentation of financial statements and submissions of annual return requirements until the SOE ends. (IPA)

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The Australian Financial Review reports that PNG is heading to a recession (-0.9 per cent) because of the COVID-19 pandemic. Other Asian and Pacific economies could also go into recession, including Malaysia (-4.6 per cent) and East Timor (-4 per cent). Poverty is forecast to increase by about 11 million people in the Pacific region.

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The World Bank has approved an emergency US$20 million (K70 million) fund for PNG to provide support to the country’s COVID-19 pandemic response. The economic support will help fund health-related activities including building a new container-based laboratory in Port Moresby, purchasing lab equipment and medical supplies, and launching a COVID-19 educational campaigns, among others.

Mining and petroleum

Oil Search has raised A$1.08 billion (K2.39 billion) during its placement and institutional entitlement offer (shares were offered at A$2.10 per share [K4.66]). Oil Search sold the shares to existing institutional shareholders and the proceeds will be used to help to reduce costs and manage the potential impact of COVID-19. The combined proceeds of the equity raising are expected to be about A$1.16 billion (K2.57 billion).

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Some of PNG’s advisers on resource projects are overseas because they have ‘either been recalled to their respective countries or chosen to remain overseas due to the COVID-19 outbreak,’ said PNG’s Minister for Petroleum and Energy, Kerenga Kua. He reportedly said that this is ‘especially the case of Twinza’s Pasca A project.’ He also suggested that there have been informal talks in the P’nyang gas project and added ‘ExxonMobil has the opportunity to come with a better plan for all joint venture partners.’ (The National)

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Lihir Medical Centre. Credit: Newcrest

Newcrest has announced a A$20 million Community Support Fund to aid its host communities and assist them during the COVID-19 pandemic. Half of the fund will go to PNG efforts and another portion is for vaccine research. (Australian Mining Monthly)

Diplomatic

Prime Minister James Marape has welcomed the new Australian High Commissioner to PNG, Jonathan Hugh Philp, to the country.

Small and Medium Enterprises

Business Link Pacific, a program funded by the New Zealand government to support small to medium enterprises (SMEs) in the Pacific, is offering subsidies of up to K16,750 per SME to receive support and help mitigate the impact of COVID-19 on businesses. The subsidy will be offered on a case-by-case basis and covers HR, contingency and continuity, financial planning, communications and marketing and business coaching. (The National)

Bougainville

The Autonomous Region of Bougainville has extended the State of Emergency for another two months. The extension passed unanimously in Parliament last week in compliance with the Bougainville Emergency Act 2006. (NCB News)

Agribusiness

Credit: Ilimo Farm/Facebook

A shortage of imported fresh cream (the result of supply chains disruptions) has led Ilimo Farm to ramp up production and release its new product, fresh cream, earlier than planned. ‘Though fresh cream was on the “drawing table” as a future product we did not plan to launch it just yet, however the call out from the market is that it is needed now,’ said Gallit Tamir, Business Development Manager of Innovative Agro Industry Ltd to the Post-Courier.

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During a meeting held last week in Goroka, coffee industry stakeholders discussed operations during the extended state of emergency. Coffee Industry Corporation General Manager, Steven Tumae, laid out the resolutions for business operations. According to The National, these are: coffee export movement along Highlands Highway will continue; coffee exporters are being urged to buy parchment coffee from rural areas; roadside parchment coffee buying won’t be allowed during the SOE, and transportation of coffee cherries to factories is allowed only by recognised buyers.