Tag Archives: Oil Search

PM Defends Shares Sale

The National

PRIME Minister Peter O’Neill has maintained that the decision to sell the State’s shares in Oil Search last week was made in the best interest of the country.

O’Neill was responding to questions from Moresby North-West MP Sir Mekere Morauta on why the shares were sold at a lower price than what they were bought for.

“Our shareholding in Oil Search is a long story. Today, that shareholding has been held by Kumul Petroleum Holdings,” he said.

He said the whole process started when the Morauta government was in office.

“In 2000, when Santos made an offer to the Morauta government to buy all the Oil Search shares, there was a cabinet meeting in Lae where all the cabinet members opposed that sale. And yet the prime minister (Sir Mekere) bulldozed it through and sold it to Oregon Minerals,” O’Neill said.

“Oregon Minerals that time was the holding company for all the mineral assets for PNG on behalf of our people.
“In 2001, the same Morauta government sold those shares to Oil Search – the entire Oregon shares.

“At that time, Oil Search was a very small company, only an exploration company.

“As a result, we held some shares in Oil Search because of that sale.

“And in order for us to participate in the LNG project that we have now, the (Sir Michael) Somare government saw fit to go and sell all our assets. Mortgage all our assets. In fact, all the shares in Oil Search.

“We were led to believe that the shares will be bought back by the government for the people.

“In 2014, when the arrangement was due for government to take back the shares, they refused to give us the shares. This was the property of the people of PNG. What else can I do? As the head of the government it was my duty to secure the interest of our people.”

He said it was why he saw UBS “to give us the money to finance the purchase to secure our interest in the biggest employer and biggest taxpayer in our country and protect our national interest”.

“I am simply cleaning up (Sir) Mekere Morauta’s mess, Patrick Pruaitch’s mess, and (Sir Michael) Somare’s mess. Let the facts speak for themselves.”

State Adjusting to Economic Situation, says Fleming

The National

By MARK HAIHUIE

THE government’s sale of its shares in Oil Search shows that it is willing to adjust to the current economic situation, Bank South Pacific chief executive Robin Fleming says.

Fleming told The National that businesses would be anticipating similar undertakings by the government in the 2017 Supplementary Budget.

“The supplementary budget is important for business as it will be the first significant outcome of the government’s 100-day plan and an excellent signal to the business community of the specifics associated with the implementation of the plan,” Fleming said.

“Kumul Petroleum Holdings recently announced the sale of its Oil Search shares with the consequent exit of the UBS and JP Morgan-structured debt facilities.

“It indicates the government’s preparedness to make decisions that recognise current economic conditions.”
Fleming said the government could eliminate or defer commitments not critical to its long-term development plans.
“This is not to say that some of those longer-term developments are not important,” he said.

“But in the short-term, the focus should be on meeting any residual payment obligations from operational or development expenditure, where services have been provided or procurement completed.

“Payment and settlement of any such debt will provide cash flow for many businesses in PNG.”

Govt eyes oil, rice production

August 29, 2017
Source: The National

THE Government will embark on a major import replacement drive for crude oil and rice under the Government’s 100-day plan.

Deputy Prime Minister and Treasurer Charles Abel, pictured, said crude oil and rice were the major consumers of foreign exchange.

Under the plan:

  • Oil Search will provide 50 per cent crude oil from PNG oilfields to the Napa Napa oil refinery;
  • There will be a transition to locally-produced gas to fuel PNG;
  • A rice-import quota scheme will be implemented to encourage local production; and
  • Bank of PNG will provide direct intervention of US$100 million (K317m) over three months.

 

“Our economy and our country continue to have these fundamental structural imbalances that we need to be more serious about in terms of moving to true sustainability,” Abel said.

“The fact that we rely too heavily on extractive industry projects, and then we go from boom to bust when we should be relying on more sustainable industries that we don’t take that seriously.

“The fact that we rely too heavily on imports, that we send out all our natural resources, and end up with all but the finished goods and we are always looking for foreign currency to buy those goods. The biggest consumer of foreign exchange in this country is our fuel import bill.

“The second one is our rice import bill.

“Here we are producing oil and gas, here we are with huge natural water resources, and here we are with the highest cost and drain on our foreign currency being the bill to import fuel. Crazy.

“Here we are relying on rice for our staple diet, nothing wrong with eating rice, but to me there’s something fundamentally wrong about relying on imports of that rice to feed ourselves.”