For our families. For our communities. For our islands. WLPGA Oceania Regional Summit “Exceptional Energy for Australia, New Zealand & the Pacific Islands” 17th-18th May 2016 Gold Coast, Australia Overview of FSMPC & Market Conditions in Micronesian (FSM) Islands By Maderson Ramon Vital Energy Inc (Guam & Nauru) A Subsidiary of the FSM Petroleum Corporation
Outline of Presentation 1. Background and Overview of FSMPC Overview of Federated States of Micronesia Overview of FSM Petroleum Corporation – BOD & SMT Mandates, Operations and Accomplishments 2. Issues and Challenges Asset Rehabilitation Program Decline in Sales Volumes Volatile International Oil Price 3. Strategies and Opportunities Voyaging Together 2025’ Regional Expansion Coconut for Life (C4Life) Solar Power Installations LPG in Micronesia
Background & Overview
Federated States of Micronesia States Pohnpei Chuuk Yap Kosrae FSM/Total Population 36,196 48,654 11,377 6,616 105,843 Area (sq km) 371.6 121.5 119.5 111.4 n/a Municipalities 12 40 23 4 n/a Rural Pop. % 83.2% 71.5% 92.6% 67.4% 77.7% Source: pictures from www.visit-micronesia.fm; above stats: SBOC, 2010 Census Data
FSM Petroleum Corporation & Its Mandates Created by FSM National Congress in Sept. 11, 2007 (PL15-08) Became operational on July 2008 – purchased XOM Assets in Yap, Chuuk, Pohnpei. Mandate by PL-1508 was for FSMPC to Purchased the assets of XOM & Consolidate procurement of fuel purchases Secure availability, accessibility and affordability of fuel products in FSM Deliver lower energy prices to homes, businesses, and governments in FSM Invest into new and renewable energy sources PL16-68 known as the ‘Coconut Tree Act’ dissolves the FSM CDA and mandates ‘responsibility for coconut development’ to FSMPC (June 16, 2014). FS M National Energy Policy : Assist where feasible achievement of NEP’s major goal – “To become less dependent on imported sources of energy by having (1 ) an increased share of renewable energy sources and having (2) cross-sectoral energy conservation and (3) efficiency standards in place; and therefore, “By 2020 the share of renewable energy sources will be at least 30% of total energy production , while electricity efficiency will increase by 50%. Energy Efficiency referred here would also mean reduction of energy loss.”
FSMPC BOD & SMT Senior Management Team
FSMPC Operations – Regional Entity
FSM Component Unit Audit - 2014 Balance Sheet Statement P&L Statement
Issues & Challenges
Asset Rehabilitation Program An investment of $19.0MM is planned over the next five (5) years to maintain operational integrity of core import and distribution infrastructure assets.
Declining Fuel Demand in FSM
Volatile International Oil Price
Strategies & Opportunities
Strategic Framework, 2016-2025 Vision: “By 2025, Vital FSM PetroCorp is the largest provider of energy life-line products and services in Micronesia” Mission: “We deliver affordable, accessible, and available high quality energy products and services through innovation to the communities we serve” Sample of Performance Measures: By 2025, 25% of FSMPC customer base will be non-FSM. By 2025, 35% of Revenue will be from non-fossil.
Strategic Framework, 2016-2025
Other Energy Sources: Solar Power Vital Energy 100kw Solar Installation – Guam / GPA
Other Energy Sources: LPG in Micronesia 2015 FSM Volume Sales (US gallon) 2015 LPG Market Share in Micronesia 2015 Volume Sale Kero 2015 Volume Sale LPG (Est) (Estimate of 9-10k mt/yr) 87,861 Nauru FSM Rota Kiribati Palau Marshalls 1% 2% 0% 1% 8% 1% 36,994 39,869 26,871 12,190 17,087 11,391 - Saipan 14% PNI CHK KSA YAP Guam 73% Comparison of Cost / Unit $/GAl LPG $/Gal Kero Benefits of LPG is well documented $11.65 $9.75 $9.50 Way Forward for LPG in Micronesia $5.78 $5.30 Consolidate fragmented markets; $4.60 $4.35 Increase volume thru bulk purchase $0.45 $0.47 $0.35 $0.16 Negotiate better / effective supply logistics FSMPC can be a viable Partner! Pohnpei Chuuk Yap Guam
Thank you Contact Details: Maderson Ramon, GM / Vital Energy Inc. Email: petrocorp@fsmpc.com; Website: www.vitalenergy.fm
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