Kumul Petroleum Holdings Limited, Papua New Guinea’s national oil and gas company, announced today an increase in its aggregate equity in future joint exploration projects with Total SE following talks in Paris last week to remobilize the Papua LNG Project.
Kumul Petroleum Managing Director, Mr. Wapu Sonk, was pleased to announce the successful deal for an additional free carried 7% equity in any future joint exploration projects with Total SE which will be on top of Kumul Petroleum’s 22.5% back-in rights. This will effectively bring its aggregate equity to nearly 30%.
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. The 7% free carried equity will allow Kumul Petroleum to jointly participate as a joint venture (JV) partner and access critical technical data without any financial votes.
The increase was negotiated and secured during the recent Papua LNG Remobilization discussions held between the Papua New Guinea Government Delegation led by Deputy Prime Minister, Hon. Sam Basil, and Total SE Delegation led by its Executive Chairman and CEO, Patrick Pouyanné, in Paris on 3rd May 2021. This is a profound achievement that gives effect to the Marape/Basil Government’s TAKE-BACK-PNG agenda.
In an exceptional goodwill gesture, Mr. Pouyanné acknowledged the Marape/Basil Government’s efforts to secure greater local participation for their country. As part of Total’s strategic endeavour to continue cementing the relations with the national stakeholders, it was agreed that Total SE and PNG Authorities would cooperate to create significant in-country value and implement the Papua LNG Project in an exemplary manner.
This much-needed and timely US$13 Billion dollar (PGK 48 Billion) Capital Expenditure (CAPEX) Project by Total and its JV 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.
As part of the greater cooperation between our two organisations, Kumul Petroleum is looking forwards to the secondment of our technical staff to the pre-FEED, FEED and Detailed Engineering Design phases of the project.
Kumul Petroleum also anticipates the resumption of our joint marketing efforts for our LNG entitlements from the Papua LNG Project and aims to achieve the successful conclusion of Sales and Purchasing Agreements (SPAs) in the LNG Market. The parties will aim to conclude these SPA’s by the end of the 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. We recognise the financial stress and challenges induced by the COVID-19 pandemic and other intervening circumstances in the major markets, and will endeavour to leverage our combined synergies to attract major global financial institutions to finance our equity shares.
On this occasion, Kumul Petroleum acknowledges the visionary leadership and foresight of both Delegations, led by the Deputy Prime Minister of Papua New
Guinea and Executive Chairman & CEO of Total SE respectively, in pushing the boundaries beyond the current Oil & Gas Act provisions, and securing the Government of Papua New Guinea’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-Front End Engineering Design (Pre-FEED) works, and the launching of FEED in early 2022 in preparation for a Final Investment Decision (FID) in 2023.
