Kumul Petroleum’s Wapu Sonk says underdeveloped PNG is full of opportunity for energy investors
The boss of state-backed PNG petroleum group Kumul says that the country is ready to capitalise on limitations in the Australian market as it seeks to supply the world’s energy needs.
Papua New Guinea is underdeveloped and ready to supply the Asia-Pacific region and the world’s energy needs, according to the country’s state-backed firm Kumul Petroleum.
As Australia turns away from new gas projects and as Indonesia and Malaysia run out of new fossil fuel developments, the Pacific nation sees an opportunity to capture a larger share of the market.
Kumul Petroleum managing director Wapu Sonk told The Australian in Port Moresby at the Petroleum & Energy Conference that Papua New Guinea was the only country left in the Asia Pacific region that offers investors a blank canvas.
“PNG is underdeveloped, under discovered and underexplored,” he said.
“Here is a country that has the potential to support our region in the Asia Pacific and also the world’s energy needs, so we would like to welcome investors to come to PNG and start exploring opportunities.”
Kumul Petroleum is a government-backed business that invests in projects across the country.
Last week it struck a deal with Santos to acquire a $576m or 2.6 per cent interest in PNG LNG. The agreement also includes the option to purchase a further 2.4 per cent stake next year.
Russia’s invasion of Ukraine has been a bonus for Papua New Guinea, Mr Sonk said, with more energy investors eyeing opportunities that were available within the borders of Australia’s closest neighbour.
“The Russia-Ukraine war has increased the demand for LNG from Europe which forced many countries to return to coal and gas,” he said.
“We are seeing interest from buyers who want to diversity their energy needs and we are positioned in a strategic location in the Asia Pacific region for supply to the demand centres in Asia.
“They also want the very high quality gas which we produce that is high in liquids and this is seeing more companies that want to invest and develop LNG products.”
The country was looking for a mix of players from big to small to invest and develop projects across Papua New Guinea, with Mr Sonk adding that firms of all sizes had a role to play in growing the energy sector.
“We want a good mix of big companies that bring in the capital as well as smaller companies that bring in the exploration dollar and start exporting, while taking more risk in exploring,” Mr Sonk told The Australian.
“We need a mix of big, medium and small firms to be in the country doing what they are good at doing.”
The pitch comes as the Papua New Guinea government is ready to introduce a new constitutional law to be known as Organic Law on the Petroleum Production Sharing that will help the country generate more royalties from exploration.
PNG Petroleum and Energy Minster Kerenga Kua told the Petroleum & Energy conference that while the provisions would not apply to Bougainville or PNG LNG, Papua LNG and P’nyang LNG projects, the government did expect some hesitancy from investors.
“We expect that again there may be some initial hesitancy in PNG, and that is only natural,” he said.
“But ultimately, we anticipate that those international companies will approach Papua New Guinea’s production sharing initiatives with the same level of positive acceptance as they have done across the world and especially in our region.
“To our investors, there is nothing to fear through us taking these steps. Our actions will at all times be reasonable and justifiable in the context of our petroleum sector.”
The reporter travelled to Port Moresby as a guest of the PNG Petroleum & Energy Conference