PETROMIN NEWS
Petromin Chairman's Statement at the Petromin 2009 Annual General Meeting
The Prime Minister and Trustee Shareholder, Rt. Hon. Grand Chief Sir Michael Somare, the individual Trust Managers, Mr. Pokawin, Mr. Minjihau and Mr. Kassman. Members of the Board of Petromin, Ministers of Government, Provincial Governors, invited guests, ladies and gentlemen.
The 2009 financial year was the 2nd complete year of operation for Petromin and the 3rd operating year in its growth since its birth in March 2007.
Consistent with its mandate and in line with the Business Plan, the year started with exploration advances in Petromin’s mineral exploration tenement activities and ended with development advances in the oil and gas sector activities.
The first quarter saw the completion of geological mapping and sampling work at the Ipi River Prospect and the commencement of exploration drilling at the Saki Prospect. It also saw the successful flow test from the Antelope 1 well in Petroleum Prospecting License Number 238 (PPL238) in the Gulf Province. The flow test set a new world record flow of 382 million standard cubic feet of gas per day (mmscfd) with 5,000 barrels of condensate per day (bcpd).
The second quarter saw Petromin and Inter-Oil signed Heads of Agreement with China’s National Offshore Oil Corporation (CNOOC) for commercial cooperation. Petromin also held its second annual general meeting and announced its second dividend payment of 2 million kina to the State.
The Minister for Petroleum and Energy responsible for the Oil and Gas Act 1998 endorsed the nomination of Petromin as the State Nominee by a letter dated 2nd June 2009. The Minister advised Petromin that pursuant to powers given under section165 of the Oil and Gas Act that he intends to confirm Petromin as a State Nominee in the Elk/Antelope LNG Project and this nomination will be effective once the State exercise its back-in right under the Act.
The fourth quarter saw Petromin end the year on a very high note. In December the National Executive Council formally endorsed the nomination of Petromin as a State Nominee to hold the State’s 20.5 percent interest in the Elk/Antelope project. The same decision approved the execution of the Project Agreement between the Independent State of Papua New Guinea and the Project Partners.
In early December, we saw a successful testing of the Antelope 2 well. The flow test recorded 11,000 bcpd and 705 mmscfd which set a new world record far beyond the Antelope-1. There are now sufficient gas resources at the Elk/Antelope gas field to underpin another LNG project.
The icing for the year came when the ExxonMobil led PNG LNG project was sanctioned for development in the second week of December 2009. The decision by ExxonMobil and partners was significant to Petromin as with its minority interest of 0.2037 percent it would be a participant in the first world class LNG project to be staged in PNG.
Financially, the year was profitable for Petromin as we declared a net profit of K78.2 million and saw the net worth of our assets in the balance sheet increase by 29% from K257 million in 2008 to K333 million in 2009. In comparison to 2008, the net profit was K93.3 million indicating a reduction in profit of about 16 percent. The reduction was largely due to lower oil prices in 2009 as the average oil price in 2009 was $65 a barrel while in 2008 it was $102 a barrel.
As a result of a profitable year, Petromin paid a total of K10.6 million in income taxes to the State and this was in addition to a K2 million final dividend for the financial year, ending 31st December 2008.
Petromin’s vision is participation by all Papua New Guineans in the ownership and development of our mineral, oil and gas resources through profitable partnerships for our future prosperity and I am pleased and proud to say that Petromin’s growth and operations in 2009 has embraced that vision.
On behalf of yourself the Trustee Shareholder, and that of the Individual Trust Managers of the Petromin Trust, the Board again extends to the Management and staff of the Company its congratulations for another profitable and successful full year of operations and looks forward to the Company’s continued growth from strength to strength.
To you and the people of Papua New Guinea whose interests we serve, the Board affirms its commitment to ensuring that Petromin grows and delivers the benefits for the citizens of this great nation as it continues to engage in our mineral, oil and gas resources.
Brown Bai, CBE, CSM
Chairman
Friday, 18th June 2010