Tag Archives: Papua New Guinea

Papua New Guinea sends team to Singapore to renegotiate Total LNG deal

Sonali Paul | Reuters | 15 August 2019

Papua New Guinea has sent a team to Singapore to renegotiate its Papua LNG agreement with French oil major Total SA, the nation’s petroleum minister said in a statement on Thursday, warning the talks could end “disastrously” for the gas project.

The strong language from minister Kerenga Kua marked an about-turn from a statement 10 days earlier, when he announced the new government would stand by the gas deal agreed by the previous government with Total in April, with some minor changes.

The state negotiating team, which includes Kua, left on Thursday for Singapore and will return early next week, the minister said in a statement released by his office.

“The negotiations could work out well or even disastrously,” he said.

Papua LNG, a joint venture between Total, Exxon Mobil Corp and Australia’s Oil Search Ltd, is part of a $13 billion plan set to double the country’s exports of liquefied natural gas (LNG).

The Papua LNG gas agreement, key to the project going ahead, came under review when Prime Minister James Marape came to power in May promising to reap more benefits for the impoverished nation from its huge oil, gas and mineral resources.

“Success in the discussions could lead to an early progress of the project. By the same token failure could have very serious ramifications,” Kua said.

“This is a risk we take as we try to move in the direction of taking PNG back and making it wealthy.”

Total declined to comment ahead of the talks, but its Chief Executive Patrick Pouyanne said on July 25 that he expected the government to respect the gas agreement.

Oil Search said on Thursday it looked forward to “further clarity on the state’s position” on the agreement and ways to advance the project.

The government has said it wants to sort out Papua LNG before resuming talks on another gas deal, governing the Exxon-led P’nyang field, which will also feed the $13 billion expansion of LNG exports.

Oil Search is a partner in both Papua LNG and P’nyang.

The renewed uncertainty around the status of the Papua LNG agreement and potential for further delays on the P’nyang deal knocked Oil Search’s shares down 6.7% on Thursday.

“We remain of the view that we can’t rule out a tougher approach to the Papua gas agreement being taken by the new government, which would present risk of material delay,” Credit Suisse analyst Saul Kavonic said in a note.

Analysts have warned that delays on sealing the agreements and any changes to terms could see the gas projects put on the backburner as Total and Exxon may then look to pursue other LNG projects elsewhere in their global portfolios.

Exxon Mobil in PNG was not immediately available for comment.

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Marape Backs Moratorium, Leans Towards Ban On Experimental Seabed Mining

Matthew Vari | Post Courier | August 15, 2019

Prime Minister James Marape has indicated he will support a proposed regional moratorium on seabed mining, however, could not go as far as to say a ban outright would be needed.

In an interview with the Post-Courier at the opening ceremony of the Pacific Islands Forum on Tuesday, Mr Marape responded when asked in relation to Fiji’s stance on the matter, that he would support the move, making specific reference to what he described the Nautilus Solwara 1 project as “a total failure”.

During Fiji Prime Minister Frank Bainimarama’s opening remarks at the Sautalaga climate update meet on Monday, he informed leaders present of Fiji introducing its own climate change act, of which the country will push an ambitious proposal for both its national and a regional moratorium on seabed mining.

“I ask you all to join in this ambitious venture and also support a 10 year moratorium on seabed mining from 2020 to 2030 which would allow for a decade of proper scientific research of our economic zone and territorial waters,” Mr Bainimarama said.

Sentiments supported by James Marape regarding the proven viability of deep sea mining, which he said is not yet a proven concept. “As a nation we have lost over K300 million in a concept of deep sea mining.

“Until that deep sea mining technology is environmentally sound and takes care of our environment at the same time we mine it, then at this point in time, I support the call made by the Fijian Prime Minister, we just need to have the best technology available,” Mr Marape sternly said.

When asked if it could go as far as supporting a ban, the Prime Minister left this option out adding just as the moratorium aims to prove the viability- that process will prove “on a case by case basis going into the future”.

“If there is an opportunity for deep sea mining, so long as environmentally it is friendly and the harvest of resource is done in a sustainable manner then we can give considerations to this, but right now it is a show.

“We don’t have the luxury of that informed decisional research.

“This is because that technology is not proven anywhere and PNG we burnt almost K300 million in that Nautilus (Solwara) 1 project on a concept that someone told us it can work, but it is a concept that is a total failure as I speak,” the PM said.

Apart from 15 per cent state investment in the project, Kumul Mineral Holdings is also seeking redress for the unearned revenue to the tune of US$51 million (K173m).

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Nautilus emerges, barely alive and impotent: just can’t get that deep sea mining project up

The PNG Government applied to the Canadian Court unsuccessfully to regain some of its failed investment

Deep Sea Mining Campaign | 13 August 2019

In a court appointed meeting today in Canada the creditors of Nautilus Minerals voted to effectively liquidate the company.  The two main shareholders – MB Holding and Metalloinvest – have taken control of a very much shrunken Nautilus at the expense of major creditors and hundreds of hopeful small shareholders.

Nautilus, which has been seeking to start the Solwara 1 mine off the coast of Papua New Guinea, filed for court protection from its creditors under the Canadian Companies’ Creditors Arrangement Act (CCAA) in February 2019. With its court-appointed monitors, Price Waterhouse Cooper, Nautilus has given up trying to find possible buyers of its assets.

Andy Whitmore of the Deep Sea Mining Campaign said,

“This is effectively a ‘smash and grab’ raid by the two main shareholders. But the company is essentially worthless. Its equipment is tailored to the mining of deep sea hydrothermal vents which the world now agrees are too ecologically valuable to mine. Even other DSM companies such as DeepGreen suggest mining hydrothermal vents creates an unacceptably high level of environmental impact..

In addition to this, Nautilus still faces an ever-widening community opposition over its Solwara 1 mine.

Jonathan Mesulam of the Alliance of Solwara Warriors stated,

“We rejoiced when the company filed for protection from creditors in Canada. Our opposition and our court action have helped push it to that point. Communities across Papua New Guinean (PNG) want to see the nightmare of deep sea mining removed from PNG waters. We will re-double our efforts to ensure that the new Nautilus will never operate at Solwara 1.”

Andy Whitmore continued,

“Under the deal minor creditors will be fully repaid, while major ones will get 10% of what they are owed. The biggest loser is the PNG Government which held 15% equity in Nautilus PNG and the Solwara 1 project. It has been left stranded with a debt equivalent to one third of its annual health budget for country of 9 million people.” 

“The main shareholders through Deep Sea Mining Finance (DSMF) – the vehicle lending money to Nautilus – have swapped those debts for ownership of the company. While a cheap purchase, they end up owning very littleNautilus is a company with still no capital or support vessel to realise its deep sea mining ambitions. Also, because Nautilus was delisted from the Toronto Stock Exchange as part of the insolvency proceedings, the new Nautilus will now be a private company, and not open to the same level of scrutiny.” 

The PNG Government through its company Eda Kopa applied to the Canadian Court unsuccessfully to regain some of its failed investment. Smaller shareholders are considering a class action against the new company.

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Nautilus Minerals’ plans to mine the seafloor sink deeper

NAUTILUS HAS LEFT THE PAPUA NEW GUINEA GOVERNMENT FACING A DEBT EQUIVALENT TO ONE-THIRD OF THE COUNTRY’S ANNUAL HEALTH BUDGET FOR ITS 9 MILLION PEOPLE

Cecilia Jamasmie | Mining .com | August 13, 2019 

Struggling Nautilus Minerals, one of the world’s first companies to plan on mining the seafloor, will soon join a long list of companies that have failed at attempts to extract minerals in remote places, as its creditors have voted this week in favour of liquidating the company.

The Canadian firm, which tried for years to fully develop its Solwara 1 gold, copper and silver project off the coast of Papua Guinea, faced relentless community opposition, culminating in legal action and public appeals to the government.

Those issues, together with environmental concerns and the fact that the company lost its only production support vessel last year, eroded investors’ support, forcing Nautilus to delist from the Toronto Stock Stock Exchange in March.

Since then, the Vancouver-based firm’s assets, including equipment, intellectual property and mining leases, have been put up for sale through PricewaterhouseCoopers.

In the process, Nautilus has left the Papua New Guinea government, which still owns a 15% stake in the Solwara I project as well as equipment, facing a debt equivalent to one-third of the country’s annual health budget for its nine million people. 

“The company is essentially worthless. Its equipment is tailored to the mining of deep sea hydrothermal vents which the world now agrees are too ecologically valuable to mine,” Deep Sea Mining Campaign’s (DSMC) Andy Whitmore, said in a statement.

“Even other deep-sea mining companies such as DeepGreen suggest mining hydrothermal vents create an unacceptably high level of environmental impact,” Whitmore noted.

Unlike other seafloor mining companies, including Nautilus, DeepGreen doesn’t want to drill, blast or dig the bottom of the ocean. The explorer, also Canadian, plans instead to scoop up small metallic rocks located thousands of metres below the surface in the North Pacific Ocean.

The deep sea, more than half the world’s surface, contains more cobalt, nickel, copper, manganese and rare earth metals than all land reserves combined, according to the US Geological Survey.

Companies exploring or already developing projects to mine the seafloor argue the extraction of those deep-buried riches could help diversify the sources currently supplying metals needed for electronics and evolving green technologies, such as electric vehicles (EVs) and solar panels.

Not enough studies

Academics and scientists, including the DSMC  — a group of non-profit organizations and citizens from the Pacific Islands, Australia, Canada and the US — are concerned by the lack of research on the possible impacts of high seas mining. They fear the activity could devastate fragile ecosystems that are slow to recover in the highly pressurized darkness of the deep sea, as well as having effects on the wider ocean environment.

Last year, the European Parliament called for a ban on seabed mining until the environmental impacts and risks of disturbing unique deep-sea ecosystems are understood.

In the resolution, it also urged the European Commission to persuade member states to stop sponsoring and subsidizing licenses to explore and exploit the seabed in international waters, as well as within their own territories.

Shortly after, an international team of researchers published a set of criteria to help the International Seabed Authority (ISA), a UN body made up of 168 countries, protect biodiversity from deep-sea mining activities.

So far, it has granted 29 licences to governments and companies, authorizing them to explore in international waters.

Nautilus, however, has been the only company to go beyond the exploration stage for what was supposed to be the first polymetallic seabed mine.

More projects may be surfacing soon, as the ISA is expected to open up the high seas to mining.

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President Calls For A Fair Share Of Lihir Gold Mine Benefits

Post Courier | August 12, 2019

Newly elected president of Nimamar local level government (LLG) Stanley Tunut has called on the national government to allocate its share of service delivery funds owing over the years.

Mr Tunut, a National Alliance party member unseated deputy governor and incumbent president Ambrose Silul of the People’s Progress Party (PPP).

His election was witnessed by locals who gathered in numbers at the Tumbawinlam House last week Thursday.

He said Lihir island has been deprived of government services despite having the third largest gold mine in the world.

“Over the years, the people of Lihir have not felt the impact of the funds from the national government’s service improvement programs directed to the provincial, district and the local level government,” Mr Tunut said.

But he said that the royalties worth millions paid into the Nimamar local level government have made no impact in the livelihood of the people.

“The first thing I will do is to overhaul how the budget of the Nimamar local level government will revolve to the people of Lihir with the royalties that is directed into the administration.”

He said the budget of the LLG will be well structured to benefit the people rather than the administration consuming the entire internal revenue.

“I intend to make some changes in the administration the budget was delivered in past and make a fresh start,” he said.

“If you visit the entire island on the western and to the eastern tip, you will notice the run down state of infrastructures and road conditions. To get to the western tip of the island will only require four-wheel vehicles to manoeuvre through. School and health infrastructures are wearing to and drug supplies in the aid posts and clinics are inadequate,” Mr Tunut said.

He said only a fraction of the population that reside within the perimeters of the mine site receive benefits from the mining company Newcrest Mine Limited.

Mr Tunut said to look after the affairs of the people of Lihir, there has to be an audit made on the works of the previous administration in order to make a fresh start.

“The people of Lihir do not want any political affiliation but want services to be delivered.”

He said the Nimamar local level government under his leadership will support and work alongside Namatanai member Walter Schnaubelt to deliver projects for his local level government.

He urged all stakeholders, churches and the entire population including the landowners of Lihir Gold Mine to unite because the future of Lihir will depend entirely on them.

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Petroleum Dept lacks ‘expertise’

PNG Liquefied Natural Gas Plant near Port Moresby. Photo: Richard Dellman.

Luke Kama | The National aka The Loggers Times | August 9, 2019

THE Department of Petroleum and Energy (DPE) has a shortfall in technical expertise that needed to be addressed by the Government through recruiting competent and qualified personnel from the open market, an expert says.

Johannes Kaman, a national resource economist who has worked around the world on various oil and gas and mining projects, told The National yesterday that PNG was a country rich with oil, gas and minerals but needed the best technical advice to get the most out of those resources, and that advice had to come from the DPE.

“Oil and gas and the mineral sector is a very technical sector that needs the best people with the required skills, knowledge and expertise in those fields to carry out the task on behalf of the State and negotiate with developers,” he said.

Kaman said the failure in addressing the outstanding landowner issues and benefits sharing matrix concerning the PNG LNG and the failure in securing a better Papua LNG deal was a result of poor technical expertise in the department.

“The government needs to enquire about why the senior positions of the DPE which were advertised externally calling for applicants in the open market was withdrawn and the advertisements done again through an internal advertisement,” he said.

“The Government needs to find out why that was the case because people in all the senior positions in the DPE are acting on the positions.

“And some of them are not qualified and do not have the skills, knowledge and the technical expertise to be there.”

Kaman said PNG needed to get a better deal from its resources and there was really an urgent need to review the technical expertise at DPE.

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Landowners Want 100 Per Cent Ownership of Porgera Mine

Zombi Kep | Post Courier | August 5, 2019

Majority landowner representatives are calling on Prime Minister James Marape to extend his ‘Take Back PNG’ campaign by taking back the Porgera gold mine from operator Barrick Niugini Limited (BNL).

Acting through the Justice Foundation of Porgera, 18 out of 24 landowner agents who signed the MOA in 1969, are urging the PM to act on his word by taking back Porgera gold mine from Barrick.

In a recent press conference in Port Moresby, chairman of Justice Foundation for Porgera Mr Jonathan Paraia, claiming to speak for the 18 landowner agents, declared their intention to take 100 per cent ownership.

“Enga must own the land which was given to us by God and the 95 per cent that is leaving the country for Canada must stay back in the country,” said Mr Paraia.

“We own all the resources in the country, yet all the resources are leaving the country.”

He said if the profits were retained, a lot of people from Porgera, Enga and PNG as a whole will be employed and there will be surplus of money owing into the country.

“That’s why when the mining lease expires, we are putting our resolution up to government not to renew the agreement.”

He said according to the Mining Act, anything six foot underground belongs to the State and the State should have full ownership of the mine and its profits.

But he claims the ownership had somehow passed onto foreigners. “Over the last 30 years, 95 per cent is owned by Barrick and nothing is coming back to us, even the country is missing out on it,” said Paraia.

“But now as the mining lease is expiring, PNG must own this mine.”

He said that just like the government taking over OK Tedi, they want to take ownership of the Porgera mine to resettle the landowners affected, pay proper compensation, and deliver proper services.

“The government must allow us to take over the mine so that all the damages that were done to Porgera will be fixed by ourselves,” he said.

“The things that Barrick has failed to do today; we want to do ourselves.”

He stressed that the mine will continue to operate just as it is but the ownership needs to change. “All the workers will be intact and all contractors will remain but the ownership must change.”

Former Laigaip Porgera MP Nickson Mangape who is also one of the 18 landowner agents, brushed aside comments made on social media that they are incapable of owning the mine.

“You people kept asking who will take over Porgera gold mine and saying that it’s too complicated on Facebook,” explained Mr Mangape.

“You look at OK Tedi, the government of the day took over. This is the same thing that we want with Porgera.”

He said there is no difference.

“About 33 per cent went to landowners (Ok Tedi) and 67 per cent went to the government, the same will happen with Porgera.

Enough is enough,” he said.

Meantime the National Court in Waigani ruled last week Friday that BNL and Mineral Resources Enga (PJV) will continue mining after the August 16 expiry of the mine’s SML.

Following the ruling, BNL president and chief executive officer Mark Bristow said a total of K20 million in royalties for landowners are withheld as a result of ongoing legacy issues.

Mr Bristow also said the company has funded a lot of training initiatives and to date, the total value of K544 million including donations has provided schools, health services, water, power, bridges and roads in support with the local government to change the lives of the people for the better.

He said the company has also made a commitment following its recent meeting with Prime Minister James Marape that it would invest in the Paiam hospital to get it operational again.

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