Petromin Shut - Post Courier

[SamAdams]

Still sinking in.  After all we've been through.  Where would the stock be if this headline had hit last Aug. or Nov.?  Still trying to dig but I am convinced Petromin derailed IOC in Dec-Jan. after govt approval.  But with multiple bids in hand(and winner selected?) and Petromin gone AND  Japan/Thailand/SMs reassured, it's only a matter of days/weeks.  Petromin/Duma was the cornerstone to the short thesis, probably more than we all realize.  That has been removed.  And what happens if the next buy in is 400,000 shares.  What if 4,000,000 mln short shares need to be covered?

[Palm]

Confirmed


"Petromin shut

By ISAAC NICHOLAS

PRIME Minister Peter O’Neill will today announce a major government decision to realign all major State corporate entities, including the dismantling of Petromin PNG Holdings.
A recent National Executive Council decision 85/2013 approved the repeal of Petromin Act, effectively dismantling Petromin Holdings.
A spokesman for the Prime Minister said Mr O’Neill will hold a media conference today to announce details of the NEC decision to restructure State holdings or interests in petroleum and mining assets. “Petromin will be dismantled and all its holdings transferred to the new entities to be set up. The new entities will manage the State's mining interests separately from the petroleum interests, in line with current global practice which oil and gas majors are pursuing,” the spokesman told the Post-Courier last night.
“Since it bought Tolukuma Mines (in Central province), Petromin has suffered losses. It also took up interest in the PNG LNG project (0.2 percent) on behalf of the State, which already has 16.5 percent equity through Kroton.”
The spokesman said the duplication and overlapping of participation only creates confusion and dilemma. The restructure will remove this scenerio, and create more focus beneficial to the State. Petromin was set up by the Somare government.
Joshua Kalinoe has resigned as CEO of Petromin on his own accord and staff of Petromin will be deployed to the new entity.
The short response from the Prime Minister’s office follows reports by PNGIndustryNews.net that Petromin Holdings Limited has been disbanded, with its mining and petroleum assets transferred to two other state owned companies and Petromin’s long-standing managing director and chief executive officer Mr Kalinoe has tendered his resignation.
A Petromin spokesman confirmed to PNGIndustryNews.net that Mr Joshua Kalinoe had resigned effective April 4.
The spokesman said Petromin’s mining and mineral exploration assets would go to a new State-owned entity, Kumul Minerals, while its petroleum assets would go to a separate but similarly named Kumul Petroleum.
The spokesman said the changes made all of Petromin’s staff redundant, but there were opportunities for its staff to go to the two new companies.
With discussions ongoing, he said legislation had to be amended and the administrative side of things was being looked into.
One administrative issue is what will happen with the modern offices of Petromin Haus at Boroko in NCD. The spokesman’s hunch is that the “petroleum guys might get a different building”.
Another issue is what will happen to the strategic alliance struck by Royal Dutch Shell with Petromin in 2011.
On this matter, he suggested PNG to wait and see.
“Let’s hope that will continue,” he said. “I’m not sure at this stage how that will evolve.”
PNGIndustryNews.net has separately heard that the 16.6 percent stake of the PNG LNG project held by State-owned Independent Public Business Corporation’s National Petroleum Company of PNG (NPCP) might end up under the Kumul Petroleum umbrella, but this is yet to be confirmed.
One source said that former prime ministers were going to be on the board of the holding company of the two Kumul entities while another source said the new structure would have PM O’Neill as the trustee.
Former PMs who are part of the O’Neill coalition Government include Grand Chief Sir Michael Somare, Sir Julius Chan and Paias Wingti.
Petromin’s existing assets include the Tolukuma Gold Mine and a string of associated exploration licences, a 22.5 percent stake of the Elk-Antelope field underpinning InterOil’s Gulf LNG project, a 0.2 percent stake of the PNG LNG project with an 11.28 percent interest in the central Moran field, plus a series of unproven offshore petroleum prospecting licence applications in northern PNG.
Petromin also has a 30 percent stake in Nautilus Minerals’ Solwara deep-sea mining project in PNG, with Nautilus claiming it owes more than $A50 million for its share of development costs so far.
Kumul Petroleum is actively recruiting for at least a dozen positions through job advertisements in the local press with the jobs ranging from human resource management to technical roles."
http://www.postcourier.com.pg/20130405/news01.htm

[Palm]

More insight; formed under Somare, little trust and oversight. Result? Bye bye Pettomin

"THE announcement of a major realignment of State entities today by Prime Minister Peter O’Neill has to be a major policy decision by his Government since taking office last year.

Reports of the abolishment of Petromin PNG Holdings Limited have been doing the rounds in Waigani in recent weeks, our story today as well as details provided by respected petroleum and energy online portal PNGIndustryNews.net points to discussions taking place at the National Executive Council (NEC) level to that effect.

What is the rationale behind the abolishment of Petromin and the realignment of State entities? Will the Government create a new entity to manage the State’s interests that Petromin currently oversees in the problem-plagued Tolukuma goldmine, the Elk-Antelope field, the PNG LNG Project and the central Moran field?

The spokesman for the Prime Minister did not give away too much detail in our story today. But the duplication of functions and confusion between the various entities charged with similar roles and responsibilities appears to be one major factor behind the realignment exercise.

In fact, if one is to go back in history to research the establishment of Petromin in early 2007, the entity was created in controversial circumstances by the Somare Government. The entity was set up to principally be the State’s mining and petroleum holding company by holding equity in the various mineral, oil and gas resources. The sticky point back then was that Petromin was “independent” of the State and were managed by a powerful trio of trustee managers who had veto powers. Consequently, there was criticism that the entity was not subject to public scrutiny.

Now over five years later Petromin has come under scrutiny again and could be on its death bed, depending on how the Government would like to incorporate its roles and responsibilities into the new entity that it intends to replace it with.

The decision to realign the State entities also coincides with moves by the Government to have more control over profits that come out from the giant Ok Tedi Mine. Mr O’Neill has indicated that his Government intends to relocate the PNG Sustainable Development Program (PNGSDP) and its monies back to PNG from Singapore.

Will the new entity that would take over from Petromin also “manage” the PNGSDP as part of a new management structure that the Government intends to put in place?

We applaud Mr O’Neill’s push for Papua New Guineans and specifically landowners to have more say in resource projects such as the Ok Tedi Mine. However, we remain sceptical about the Government’s own record in managing public money, and ensuring public funding is channelled to core policy areas that would definitely make a change in the lives of Papua New Guineans.

The Ok Tedi Mine reportedly paid over $500 million in tax last year, how much of that money did the Government access and channel to the appropriate intervention programs that would have benefitted all Papua New Guineans?

Past experience shows that having a national purse overflowing with PNG Kina has not necessarily translated to better life for people."