Kumul Petroleum Holdings has solidified an agreement with Santos, securing a 2.6% equity stake in the PNG LNG Project. The deal, valued at US$576 million (PGK2,086,903,400.03, also includes a US$160 million share of the project's debt.
This strategic investment further strengthens Kumul Petroleum's position in the energy sector and sets the stage for continued growth. Kumul Petroleum's Managing Director, Wapu Sonk, expressed his enthusiasm for the deal, stating that after months of meticulous negotiations with both national and international financiers, they are pleased to announce the successful acquisition of additional equity in the PNG LNG Project. This venture has been in motion since the National Executive Council's initial approval in September 2022.
Sonk went on to highlight the PNG LNG Project's impressive performance, describing it as a mature, profitable, and low-risk endeavor that consistently operates above its designated capacity. He emphasized the project's promising trajectory, with years of commercial viability ahead, attributed to the inclusion of new gas fields in its operations.
Outlining the details of the agreement, Sonk explained that in addition to the current acquisition, Kumul Petroleum has secured a Call Option from Santos. This option grants Kumul Petroleum the opportunity to acquire an additional 2.4% stake in the PNG LNG Project, with the condition that it must be exercised on or before June 30, 2024. Upon exercising this Call Option, the total equity holding of Kumul Petroleum in the project will increase to an impressive 5%.
"The Call Option will be executed at a purchase price of US$524 million (PGK1,899,410,551.21), with a share of project finance debt amounting to US$145 million (PGK525,600,247.95)," Sonk elaborated. He underlined that this strategic maneuver aligns with Kumul Petroleum's long-term vision to enhance its position within the energy sector.
Importantly, Kumul Petroleum has ensured that the financial commitments associated with this acquisition will not impact its ability to take up the State's complete 22.5% equity share in the upcoming Papua LNG Project. Additionally, Kumul Petroleum remains committed to its obligations to provide annual dividends to the State, maintaining alignment with their annual operating plans.
Sonk expressed gratitude towards key stakeholders, acknowledging the support received from the Prime Minister, the Minister for State Enterprises, William Duma, and all members of the National Executive Council who contributed to the successful closure of this transaction.
He highlighted Kumul Petroleum's overarching mission as the national Petroleum and Energy Company. "We are dedicated to fulfilling our vision of contributing to the nation's development through efficient management of energy resources. Our actions aim to balance robust commercial investments with sustainable income streams, all while supporting the National Government's developmental priorities outlined in the Medium Term Development Strategy and Vision 2050 plans."
This acquisition is poised to play a crucial role in driving both Kumul Petroleum's growth and the nation's energy landscape.