Westpac PNG Economic Bulletin
The March Westpac PNG Economic Update takes a look into current events and the economic situation in Papua New Guinea; a joint publication from Westpac Economics and Westpac PNG.
Read the full report Westpac PNG March Economic Update (PDF 1MB)
Local Economic Conditions
Puma Fuel Crisis
Due to ongoing FX illiquidity, Puma Energy advised that it would stop PNG fuel supplies until further notice. Puma has issued termination notices to customers and will aim to negotiate contracts with new terms for lower volumes. Remaining PNG fuel stocks will be allocated to emergency services and critical infrastructure as priority until a longer-term, viable solution can be put in place.
As the sole provider of aviation fuel in PNG, Puma Energy has informed the Civil Aviation Safety Authority Papua New Guinea (CASA) that it currently has no capacity to replenish Jet A1 stock. A subsequent temporary agreement has been made to continue supply, albeit at significantly reduced levels.
Exxon Mobil and its affiliate Mobil Oil Niugini have affirmed their commitment to PNGs fuel supply situation, advising that a tanker has recently discharged gasoline and diesel at its Idubada terminal in Port Moresby. Additional vessels are also already enroute to Papua New Guinea and will be arriving throughout the coming days and weeks.
Papua LNG
In a blow to the project, the French bank Credit Agricole declined to finance Papua LNG, citing environment concerns. News broke that the bank and financial advisor to oil giant Total Energies, had announced it would not provide direct financing for the project due to concerns surrounding environmental sustainability.
In addition, in their 2023 Results & 2024 Objectives Strategy presentation to Investors on 7th February, Total Energies did not make mention of any plans or proposals related to Papua LNG, including the exclusion of Papua LNG for their list of planned FIDs for 2024.
Vote of No Confidence (VoNC)
A motion was filed with the Acting Speaker of Parliament Koni Iguan regarding a Vote of No Confidence in the Marape-Rosso Government. East Sepik Governor Allan Bird was nominated as alternate PM by the Opposition.
After the motion was filed and placed on Notice Paper for the required seven days, it was subsequently refused by the Government dominated Private Business Committee. The Acting Speaker stated there were reasons for the refusal. These were not disclosed, and Parliament was adjourned to May 28th.
However, the Vote of No Confidence is still live and it is expected to be revisited once Parliament returns in May and the reasons behind the initial refusal are debated.
Black Wednesday – January 10th
Businesses impacted by January 10th lootings and arson in Port Moresby are calling on the government to provide clear and decisive action on what support and assistance is being proposed.
BPNG Governor Elizabeth Genia said the Bank of Papua New Guinea is prioritizing business impacted by the January 10th civil unrest. “We have reached out directly to the businesses affected and are working with the commercial banks to ensure the FX orders for those impacted are prioritised”
Re-opening of Porgera Gold Mine
The New Porgera Gold Mine in Enga Province produced its first gold worth K15 million. The Government is working with Barrick to ensure that the 51 per cent of the revenues are kept in country.
What will be the key risks and concerns highlighted in the 2024 Westpac/Business Advantage International PNG 100 CEO Survey? In the 2023 Survey, as shown in the chart above, it was foreign exchange, unreliable telecommunications and security/law and order was the top three. The results will be released at a sepcial breakfast on the 20th of March hosted by the Port Moresby Chamber of Commerce and Industry at the Stanley Hotel, Port Moresby.
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