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PNG confident with more LNG projects


THE PNG Government has no objection to and is confident of the feasibility of having another separate LNG project in the country. Prime Minister Peter O’Neill said yesterday the government has confidence in any new LNG project deemed feasible especially by investors. Mr O’Neill attributed the confidence based on what he said was PNG’s competitive cost structures and stable fiscal regime. He said this in response to comments made by the managing director of Kumul Petroleum Holdings Wapu Sonk over anti-competition concerns relating to ExxonMobil’s take  over of InterOil  interest in PNG oil and gas interests. He said despite the arrangement between the two there would still be two LNG operators. Mr Sonk told Energy Intelligence that “Exxon is not going to be the operator of Papua LNG. Total remains the operator of Papua LNG.”

 “But as far as the country is concerned, we are actually very happy because it brings two super majors to work together and explore the synergies with the existing fields and new fields coming on line. The resources are enough to build more trains.” He said whether it was possible PNG LNG’s proposed third train would have a different shareholder structure from the first two adding it depended on commercial negotiations among Exxon, Total and other partners. “It depends which is the most capital efficient way to develop the third train.

The government will have a say, noting that one possible scenario was to separate the upstream and pipeline business from the downstream development,” he said. Mr O’Neill when commenting on the projects said it is expected that despite global challenges, projects in PNG are well on track for delivery. “Negotiations are continuing and have yet to be finalised, the shareholders of this new project is yet to be settled and then negotiations will be concluded with the State and the respective partners,” he said. Meanwhile according to a Port Moresby Stocks Exchange release yesterday on the update of the transaction, the closing of the deal with ExxonMobil requires a final order from the Supreme Court of Yukon in the US. This was after the hearing that was held on September 27, and the court is considering the matter, including an objection filed by Phil Mulacek.

InterOil awaits final court order

THE closing of the transaction on the proposed acquisition of InterOil by ExxonMobil requires a final order from the Supreme Court of Yukon, according to InterOil.
The company, in a market release yesterday, stated that as previously disclosed, the closing of the transaction with ExxonMobil required a final order from the Supreme Court of Yukon.
The hearing was held on Tuesday and the court was considering the matter, including an objection filed by shareholder Phil Mulacek. Completion of the transaction prior to the end of September would require the issuance of a final order no later than the close of business yesterday.
ExxonMobil and InterOil intend to close the transaction promptly after the final order is obtained.
Meanwhile, the Independent
Consumer and Competition Commission raised its concern over the proposed deal saying it could adversely affect competition and breach the ICCC Act.
Commissioner Paulus Ain said they were investigating the proposed transaction.
“At this stage of its investigation, the ICCC does not support or condone the acquisition,” he said.
“Part of the ICCC’s function is to foster a conducive economic environment in PNG where companies are able to trade and compete freely within the confines of the law.” The National

Papua New Guinea has enough gas

KUMUL Petroleum Holding managing director Wapu Sonk says Papua New Guinea has enough gas to support a separate LNG project – such as the Papua LNG project led by Total SA.
He refuted claims that the PNG LNG operator ExxonMobil’s takeover of InterOil would leave the country with just one LNG project.
Sonk said Total’s proposed Papua LNG project would still be built even is Exxon expanded its 6.9 million tonne per year PNG LNG project with a third train. Kumul holds the Government’s 16.6 per cent stake in PNG LNG.
“Exxon has been in the country for a long time and knows the Government’s position – which is to have two super majors in the country developing two separate projects,” Sonk told Energy Intelligence on the sidelines of a world LNG series summit in Singapore last week.
“But if there are synergies to be explored in the meantime under current market conditions, we will explore them. That’s basically how we are driven.”
Sonk’s comment was in contrast to what Oil Search, another PNG LNG stakeholder, said, that it was “highly unlikely” that Total would still build the Greenfield Papua LNG.
Sonk said the Government had no legal right to block Exxon’s acquisition of InterOil but had a say in determining how projects were developed.
“Antelope7 will still be drilled,” he said.
He was referring to a well on Petroleum Retention License 15, the acreage earmarked to feed future LNG (liquefied natural gas) capacity. Total, which holds 40.1 per cent in PRL 15 alongside Oil Search on 22.8 percent, was planning to drill Antelope 7 this quarter, to be followed by reserve certification to help determine the capacity of Papua LNG and whether it features one big train or two smaller trains.
The French major had backed Oil Search’s $2.2 billion bid to buy InterOil, which has a 36.5 per cent stake in PRL 15, only for Exxon, to make a superior offer.
Exxon believes the best value proposition is for the PRL 15 resources to go through its existing facility. As gas from InterOil’s share in PRL 15 is now expected to feed the third train of PNG LNG, Sonk suggested Total might have to farm into nearby acreage to support future trains.

Bougainville Copper Limited changes management

THE Bougainville Copper Limited and Rio Tinto have executed a deed to terminate the Rio management agreement effective from September 12 this year, according to chairman Rob Burns.
Burns in a statement said BCL was now an independently managed PNG company.
Its head office and management team will still be based in Port Moresby.
“On June 30, 2016, Rio Tinto transferred its controlling interest of 53.8 per cent shareholding in BCL to an independent trustee,” Burns said.
“The Independent State of Papua New Guinea took up its 17.4 per cent entitlement of the BCL shares under the arrangements established by Rio Tinto.
“Previously, the PNG Government had 19.06 per cent of shares. So the Rio Tinto gift gave PNG a 36.4 per cent equity holding in the company.
“The Autonomous Bougainville Government also accepted its 36.4 per cent shareholding making them equal shareholders.”
Following the transfer of its shareholding, the two Rio Tinto directors resigned from the BCL board.
Burns is the new chairman of the board of directors. He has a 40-year experience in operational and technical mining experience including seven years with BCL while the mine was operating. He has been a director of BCL for the last 10 years.
Former MP Sir Moi Avei has been appointed to the board. He had been credited for brokering the Bougainville peace agreement.
The other independent directors of BCL are Sir Rabbie Namaliu and Dame Carol Kidu.
BCL employed and trained about 12,000 people, including 1,000 who completed trade apprenticeships and 400 who completed graduate and post-graduate studies.
Since the closure of the mine, the Bougainville Copper Foundation has continued annually to provide educational scholarships for 100 Bougainvilleans.
BCL holds the exploration licence over the Panguna mine site. It is working with the Government and the ABG, people of Bougainville, landowners and stakeholders to have a redevelopment plan for a new world-class Panguna copper, gold and silver mine.

Experimental seabed mining a threat in at least ten PNG Provinces

ACT NOW! | 15 September 2016

As much as half of the whole of Papua New Guinea could be impacted by potentially destructive experimental seabed mining operations.

While a lot of attention has been focused on the small area between East New Britain and New Ireland, known as Solwara 1, where Nautilus Minerals intends to start mining the seafloor in 2018, the Canadian company has far grander plans for experimental seabed mining and has recently been joined by the Chinese government in searching large areas of our sea floor.

Nautilus’ exploration activities include the whole of the Bismarck Sea and parts of the Solomon Sea, as shown in the map above (credit: Nautilus Minerals). Areas indicated in red are where the company already holds exploration licences. Areas in green show exploration licences being transferred to Nautilus and areas in yellow are where Nautilus has applied for an exploration licence.

In addition, the Chinese government is currently surveying the New Britain Trench  looking for potential seabed mining sites. The Trench is situated in the Solomon Sea between New Britain and Bougainville as shown in the map below (credit: Geological Society of America).

In combination, experimental seabed mining could potentially directly impact the lives of over 3 million people living in East Sepik. Madang, Manus, East and West New Britain, New Ireland, Morobe, Oro and Milne Bay Provinces and the Autonomous Region of Bougainville.

Nautilus is struggling financially, has been forced to stop machine development, lay off staff and close offices, but the threat of experimental seabed mining, whether by Nautilus, another mining company or the Chinese is still very real.

The potential impacts of seabed mining are still not fully known but they could be devastating for PNG with people’s lives and livelihoods potentially impacted across ten Provinces and untold damage to our economically important tuna stocks and marine ecosystems.

Newcrest dumps Hidden Valley mine, Harmony Gold takes control



Peter Wells | Financial Times | 19 September 2016

Harmony Gold will take full control of the Hidden Valley mine in Papua New Guinea after Newcrest Mining, the Australian gold producer, said it was selling its half of the joint venture.

Newcrest said in a statement to the ASX today it was selling its share in the 50/50 Hidden Valley joint venture to its South African partner. Harmony will now assume all liabilities and expenses related to the JV and mine, including rehabilitation costs and remediation obligations with effect from August 31 this year.

As a result of the exit, Newcrest will recognise a loss on the sale of approximately $10m. The miner also said that as part of the transaction and to help cover a one-off contribution towards Hidden Valley’s future closure liability it was funding its subsidiary which held the stake in the JV with $22.5m

Sandeep Biswas, Newcrest’s CEO, said:

Having completed the strategic review of Hidden Valley, Newcrest determined that the best outcome was to exit the operation and focus our attention on safe profitable growth at our other assets.

Located 300km north-west of Papua New Guinea’s capital, Port Moresby, Hidden Valley is an open pit gold and silver mine. Production commenced in September 2010 and in the 12 months to June 30 the mine produced 145,132 ounces of gold (on a 100 per cent basis).

NZ: Moratorium on seabed mining needed


Gareth Hughes MP| NZ Greens | 19 September, 2016


“Seabed mining should be considered a novel experimental activity”

Today at Parliament, I accepted a petition signed by more than 6,000 people calling for a moratorium on seabed mining. This is also the day Trans-Tasman Resources’ (TTR) second application attempt to mine the seabed of the South Taranaki Bight opens for the twenty days of submissions period under the Environmental Protection Authority’s (EPA) rules.

It was fantastic to see the petition organised from Kiwis Against Seabed Mining (KASM), who have led the successful campaigns that saw TTR’s first application and Chatham Rock Phosphate’s seabed mining applications declined by the EPA. Three busloads of local iwi Ngāti Ruanui also travelled down from Patea for the event and they say consultation with TTR has been flawed. This company is applying for consent to suck up 50 million tonnes of seabed, extract the iron ore and dump 45 million tonnes of sediment back.

This is in the feeding ground of the world’s largest whale and the habitat for the world’s smallest and rarest dolphin so it’s no surprise there’s huge opposition. Last time TTR tried, only 8 of the of the 4800 submissions to the EPA supported the mining.

Seabed mining is a controversial new activity. The two applications to date were rejected by the EPA because of environmental impacts and scientific uncertainties. One thing that has stuck in my head from the last process was the Rumsfeldian quote ‘the uncertainties around the uncertainties is uncertain’. This is an entirely new field, apart from a little shallow water diamond mining. Seabed mining should be considered a novel experimental activity.

Both Australia’s Northern Territory and Namibia, who have grappled with seabed mining, have instigated moratoria. I support KASM’s call for the Government to place a moratorium on the activity here. We have the fourth largest Exclusive Economic Zone in the world and with huge scientific uncertainties surrounding seabed mining, it’s responsible to wait and to learn more before risking our marine ecosystem and fisheries. I’d contend it’s better for the companies interested in undertaking seabed mining too, as consent applications can cost millions of dollars, so a delay and more research benefits everyone.

The petition will be referred to a select committee to consider and with only twenty days to make a submission on TTR’s application, I hope you can make one.

Newcrest sells mine shares to Harmony Gold

HARMONY Gold will take full control of the Hidden Valley mine in Papua New Guinea after Newcrest Mining, the Australian gold producer, said it was selling its half of the joint venture.

Newcrest said in a statement to the ASX yesterday that it was selling its share in the 50/50 Hidden Valley joint venture to its South African partner.

Harmony will now assume all liabilities and expenses related to the JV and mine, including rehabilitation costs and remediation obligations with effect from August 31 this year.

As a result of the exit, Newcrest will recognise a loss on the sale of approximately $10m (K32m).

The miner also said that as part of the transaction and to help cover a one-off contribution towards Hidden Valley’s future closure liability, it was funding its subsidiary which held the stake in the JV with $22.5m (K73m).

Newcrest has also signed an agreement to sell its 50 per cent interest in certain regional exploration tenements proximate to the Hidden Valley mine, to Harmony.

The transactions will enable Newcrest to focus its attention on its other assets. The parties will remain joint venture partners in the Wafi-Golpu project. At June 30, 2016, Newcrest had provisioned US$35m (K113m) on mine rehabilitation obligations which will now be reversed.