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NatGas Revenues to Flow into PNG Sovereign Wealth Fund

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PNG Treasurer Don Polye

PNG Treasurer Don Polye

Liquefied Natural Gas (LNG) will drive growth in Papua New Guinea (PNG) this year with the ExxonMobil-led PNG-LNG Project on track to begin exporting in the second half of 2014. The PNG Sovereign Wealth Fund will be the sole beneficiary of the government’s natural resource windfall, PNG Treasury Minister Don Polye has reportedly declared.

The US$ 19 billion PNG-LNG project has gas production and processing facilities spread throughout the Hela, Southern Highlands and Western provinces.

“All proceeds of LNG will go directly into the SWF and I mean 100% of it,” Polye said, according to Post-Courier. “The first sale of the LNG will begin this year and the projected growth of the economy will be roughly approximately valued around K52 billion (US$20 billion) when the first proceeds of the sales of LNG start coming in.”

In November 2010, the PNG government wrote provisions for a sovereign wealth fund into its 2011 budget. The sovereign fund is intended to rein in the effects of historically volatile mineral and petroleum revenues on the economy and government budget as well as to provide for long-run economic development and social programs. According to Post-Courier, Minister Polye said the sovereign wealth fund will be finalized in May at the next parliament session. As for the sovereign fund’s asset allocation policy, Polye is eyeing international markets.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

GIC Supports CapitaLand Shanghai Investment on Haimen Road

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GIC Private Limited, Singapore’s sovereign wealth fund, has entered into a 50:50 joint venture with Raffles City China Investment Partners III (RCCIP III), a fund controlled by CapitaLand. The joint venture is acquiring Shanghai’s tallest twin towers for an aggregate consideration of RMB 12.8 billion (US$ 1.84 billion). The property is located in Shanghai’s core Central Business District.

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Wells Fargo Could be Slimming Down, Possible Retirement Unit Sale

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Wells Fargo (WFC) is looking to exit the retirement plan servicing market, for a potential sale price of US$ 1 billion. The unit is involved in record-keeping, custody, trust details and various other retirement plan services for corporations. It is housed under the Wealth and Investment Management unit. The retirement plan servicing market is not particularly compelling for the bank, especially in light of the U.S. Department of Labor’s newer regulations to force managers to disclose compensation arrangements and fees to plan fiduciaries. Wells Fargo has been lauded for its loyal consumer base and high revenue, and doesn’t require the business, though recent scandals have been a drag on the company’s profitability and public image. This news has pre-empted some advisors to jump ship. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Mubadala Petroleum Signs Deal to Buy Interest in Nour North Sinai Offshore Area Concession

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Mubadala Petroleum, a division of Mubadala Investment Company, signed a deal to acquire a 20% percent participating interest in Egypt’s Nour North Sinai Offshore Area concession. The seller of the interest is a subsidiary of the Italian energy giant Eni. Eni holds an 85% stake in the partnership with Tharwa Petroleum Company, which holds a 15 percent interest. Formed in 2004, Tharwa Petroleum Company is 100% owned by the Egyptian government through a variety of state-owned entities such as the Egyptian General Petroleum Corporation (EGPC) at 20% and Egyptian National Gas Holding Company (EGAS) at 20%.

The sales transaction is subject to conditions, such as approval from government authorities in Egypt.

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