Downstream

Wholesale Distribution

We supply petroleum products as a wholesaler to commercial clients and operate aviation refueling facilities throughout Papua New Guinea. We own and operate six large terminals and six depots that we use to supply product throughout Papua New Guinea. We enter into commercial supply agreements with mining, agricultural, fishing, logging and similar commercial clients to supply their petroleum product needs.

Pursuant to many of these agreements, we supply and maintain company owned above-ground storage tanks and pumps that are used by these customers. More than two-thirds of the volume of petroleum products that we sold during 2011 was supplied to commercial customers.

Although the volume of sales to commercial customers is far larger than through our retail distribution network, these product sales are at a lower margin due to the volume rebates offered to our larger customers as a direct result of competition in this sector. Aviation customers represented a significant proportion of our total business by volume.