BPNG says no to Puma Energy US$50 million [K176 million] request for fuel ‘comfort’

Governor of the Bank of Papua New Guinea, Elizabeth Genia said the BPNG cannot sign a ‘comfort letter’ that would guarantee Puma PNG a minimum monthly intervention of USD 50m (K176 million) solely to fulfil their foreign exchange orders.

“The BPNG intervention program is there to assist all businesses access foreign currency and we will continue to provide that support to all importers of goods and services into PNG,” Ms Genia said.

Ms Genia said in 2023, Puma PNG sourced USD 458.6 million in PNG’s domestic foreign exchange market to meet its payments for imported fuel, comprising USD 414.7 million from BPNG’s intervention program and USD 43.9m from the commercial market flows.  

She added that by law, BPNG cannot dictate to commercial banks.

“BPNG cannot provide written confirmation that Puma PNG’s foreign exchange orders lodged with the commercial banks are compliant with the Anti-Money Laundering and Counter Terrorist Financing Act, and BPNG’s Foreign Exchange Control (FEC) requirements.

“The commercial banks undertake this due diligence themselves with their clients and like all businesses, Puma PNG should work with their commercial bank to ensure the appropriate paperwork is in place when making an international payment,” Ms Genia explained.

She further said the BPNG has completed the “special purpose audit” into Puma PNG’s overseas payments.

Meanwhile, the Bank of South Pacific has granted an additional 90 days’ extension to Puma Energy to move its business account to another commercial bank in the country.

“At the request of the PNG Government, BSP has agreed to provide Puma a further 90-day extension from the 8th of March, 2024 for the closure of its accounts, following a request from Prime Minister James Marape.   

“As a licensed bank in PNG, BSP has an obligation to strictly comply with all regulatory requirements. 

“BSP has complied with its regulatory and contractual obligations in making the decision to cease Ltd banking relationship with Puma,” BSP said in a statement.