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Speeches, 26 November 2020

Creating shared value opportunities in PNG

2020 PNG Chamber of Mines and Petroleum Webinar, Andrew Barry, ExxonMobil PNG Limited Managing Director

I'm proud and humbled to be here today to share with you how PNG LNG is changing lives and bringing long-lasting benefits to this great country.

As I was preparing for this webinar I went back to the very first speech I gave when I stepped into this position almost 6 years ago. It was at the annual Government Leadership summit and what struck me was how much the speech focused on the importance of partnership, teamwork and a collective vision to improve the standard of living and lives of all Papua New Guineans.

I had no idea at that time the highs and lows we would experience over the next 6 years and how important those words and messages would be.

Like me, I am sure it brings us all great joy that our project is performing better than all other projects in the region that were built at a similar time. It is literally best in class in safety, environmental, reliability AND, on a comparative basis, it has returned significantly more to the PNG than that of its competition.

An Amazing Journey

One day I received an email in my Inbox – it was called An Amazing Journey. The email contained this photograph I have up on the screen and it was one I had been very much waiting for. I cannot adequately describe my emotion when I saw this photo – pride, happiness, strength and more. You ask why – it’s just a simple picture of staff in a control room. This was a huge milestone, for us many years in the making – Our technicians who started as Operations and Maintenance Trainees were now running the show, and they were being led by Alex Oki – our newest Pipeline Supervisor and Noah Pingin our Production Operations Supervisor. This was an entire PNGian shift – on the board and on the pipeline.

This and thousands of other stories like Christine’s or Jeremiah’s where working at or with PNG LNG has changed their and their children’s future is exactly what gives us the passion to work so hard day in and day out. It is the impact it has on the people of PNG. It is what our organisation focuses on and motivates them.

This multiplying effect can’t be measured with numbers but has the potential to shape the future of the country.

Contributions to the State

Let’s quickly recap on the numbers for PNG LNG because they are large, significant and impressive. We have heard both from Wapu and Augustine who are partners in this great project and the benefits they are helping to flow back to the community. 

PNG LNG is the largest single investment in PNG and since 2014, over 10 billion kina has been paid to the country through taxes, landowner royalties, development levies and distributions to Kumul Petroleum Holdings and MRDC.

More than 2.5 billion kina in taxes with ~1.5 billion being corporate income tax. More than 2 billion paid to landowners and provincial governments and more than 5.6 billion to Kumul.

These numbers are even more impressive when you take into consideration the reduction in oil and gas prices since startup and the 2018 earthquake.

What can 10 billion kina get this great nation? And what would the country be like without this contribution and why do some critics believe it is not enough.

“A Tale of Two Brothers”

Some of you may have seen this article, “A Tale of Two Brothers” in the National papers. It is the story of how two brothers Francis and Patrick Kunuma started NARES Engineering Limited – a business that specializes in equipment inspection and non-destructive testing services. In 2012, NARES Engineering started providing services to PNG LNG, first as a sub-contractor, then as a primary contractor replacing an international service provider.

Through this partnership, we worked with NARES to enhance their management systems towards world class standards that ExxonMobil applies globally. Through learning from this partnership, NARES Engineering has not only expanded, but has been awarded a contract by Origin Energy in Australia to provide  services to the region – an incredible success story that each and every one of us should be proud of.

Growing PNG Businesses

We've spent ~15 billion kina in country on goods and services across both the construction and production phases of the project, where we have strived to help create, train and employ local businesses so they can in-turn grow to employ more Papua New Guineans.

Approximately 4 billion kina has been invested back into local landowner companies, or LANCOs, including education and training programs to help contribute to their growth and long-term success.

Our commitment to investing in local goods and services saw 280 local businesses and 13 LANCOs engaged during 2019, doubling our support of local suppliers since production began – and this number continues to grow year-on-year.

We share the PNG government’s goal of building the capacity of local suppliers and SMEs, and our efforts in this space continue to feature prominently across all aspects of the PNG LNG Project. As you heard from Kori Chan, we have passed on our values and standards help create a strong foundation for businesses to expand and broader local industry to flourish.

Stephen Marinjembi

This is Stephen Marinjembi on our FPSO in Guyana. Stephen is a Machinery Engineer from PNG in his early 30s who has been based in Houston, Texas. Stephen started his career in 2011 with PNG LNG as an Instrumentation and Controls Engineer after graduating from Unitech. Stephen moved to the US on assignment in 2019. This assignment was to help him develop and learn skills that will propel his career and contribute more to PNG. This year Stephen was selected from many other Machinery Engineers globally to support our project in Guyana. Such an incredible moment for us.

Developing future leaders

At the PNG LNG Project, we believe our and Papua New Guineas greatest asset is its people. Our approach to workforce development involves creating local jobs and training Papua New Guineans.

Today, over 3,000 Papua New Guineans work across our operations, making up 9 out of every 10 of our total workforce, with more than 60 holding leadership roles within the organisation.

We continue to invest in and grow our talent pool through partnerships with PNG universities and the Kumul Petroleum Academy, as you heard from Zillar our Training Supervisor in the video. 

More than 230 Papua New Guineans, which include 25 per cent women, were recruited through our Operations and Maintenance program. We now have a higher percentage of women working in our Operations & Maintenance group than any other ExxonMobil affiliate in the world.

Last year our organization was getting ready to mobilize a team of young Papua New Guineans to Yokohama, Japan to work on the FEED phase of our expansion project.

This assignment would have given this team amazing exposure to learning about projects, working with world class vendors and leadership skills. The entire organization was abuzz with excitement. As we were about trigger the move, our progress on our expansion projects stalled and we ended up pulling down the these assignments, demobilizing all our projects teams here, in Japan, Singapore, Melbourne and Houston and pulling back all PNGians around the world including Stephen as the uncertainty around expansion became apparent.

I am hopeful that in the near future we will be able to remobilize these teams.

Paji’ipa Women’s Group 

This is Serah Tindipaja and her group from the Paji’ipa Women’s Group in Hides. Serah who was a housewife until recently, is a mother of 5 and a grandmother. Our project has partnered with Serah and this Women’s group on capacity building.

After 3 years of partnership, these subsistence farmers today hold a contract with Hides Alliance Group who run catering services at the Hides Gas Conditioning Plant. This contract includes the provision of approximately 2000 kilograms of fresh produce and vegetables.

Serah who is now in her first leadership role has advanced this group from subsistence farming to an M-SME registered with IPA. This income is now helping Serah make a huge difference in her ability to support her family.

Just another example of the impact of the project which cannot be measured in the numbers. As part of the expansion offer we had been planning support for a 300 million kina agriculture partnership in Hela which was to support livelihoods and over 5,000 jobs.

Community Building

You heard from Cathy Alex on our investment and support for long term partnerships and commitment to improving livelihoods.

We have invested more than 200 million kina in hospitals, clinics, schools, women’s empowerment, agriculture, education scholarships, sporting clubs, charities, sexual violence safe houses, livelihood capacity building and business support training. We are improving the quality of lives across PNG for the long-term.

In partnership with landowner companies and the Departments of Works, we are also making ongoing improvements to infrastructure including upgrades to highways, roads and bridges.

Opportunities to Grow

While 2020 has presented many challenges, we continue to invest in PNG's future, as we believe there are many opportunities to grow.

Over the past decade, our partnership with government, industry and the communities within which we work continues to grow and deliver social value for PNG in ways that benefit the long-term livelihoods of all Papua New Guineans.  

“One Team Moving Forward”

Our focus on domestic gas now sees PNG LNG supplying approximately 50 per cent of Port Moresby's power demand and shortly will be more than 100% when the Dirio plant starts up. We remain committed to supporting other power opportunities and projects, including those in the Hides area. Imagine what constant and lower cost power supply in Port Moresby would mean and further, power supply to households in the Hela Province?

From the stories shared, we have come a long way, we want to continue to move forward. We want to also make sure we don’t lose the progress we have made so far – and this will take the support of everyone. One Team Moving Forward PNG.

PNG LNG and the Hiri Trade

We started this conversation with a reflection on the Hiri Trade. As I bring these initial remarks to a close, I also reflect on the Hiri Trade.  It shows resilience, it shows teamwork, its show a shared vision amongst the many stakeholders, it shows the important and challenging role that trade plays in our society.

The commodity of trade at that time was the humble clay pot made by the women of the Motuan villages. Today the product coming off that shore is the LNG that is exported to the world. It takes all of us some of whom you heard from today, to ensure that the ship sails and makes the trade. Just like the Hiri trade, it started in one village, in Boera and eventually expanded to the other villages, as the value of this trade was seen.

Looking ahead, expanding our pipeline infrastructure for upcoming projects will not only unlock new employment opportunities for Papua New Guineans, but create opportunities for new commercial opportunities to drive and deliver long-term and sustainable economic returns to the country.

Watch Andrew Barry's full 'creating shared value opportunities in PNG' presentation on YouTube here