PETROMIN NEWS

Petromin Serves Notice of Direction on IPBC

Petromin PNG Holdings Limited has served a Notice of Direction on IPBC under the relevant provisions of the Petromin Act to transfer the 17.56% shares in Oil Search Limited held by IPBC to Petromin.

Under the Petromin PNG Holding Limited Authorisation Act, 2007, Parliament has authorised the transfer of the shares to Petromin.

Managing Director and CEO of Petromin, Mr. Joshua Kalinoe said today that the Board of Petromin has exercised its right to transfer the shares.

He said the shares needs to be protected from the proposed sell down by IPBC.

“ While we do not have the full details of the transaction, however from what is available Petromin understand that the proposal by IPBC is to issue an exchangeable bond note to a company in the Middle East, in exchange to fund the State’s equity in the PNG LNG project, using the 17.56% shares in Oil Search.

“As the future owner of the shares, Petromin was not consulted nor was it given the opportunity to acquire the shares as intended by Parliament”, Mr. Kalinoe said.

He said the shares are a strategic asset to the long-term commercial interests of our shareholders, the people of Papua New Guinea, and Petromin has the obligation to protect them from being cheaply disposed.

“Petromin has looked at alternative financing models for the State’s equity participation in the LNG project which are less risky, debt free to the State and will not involve the disposal of State assets or dilution of direct equity in the PNG LNG project.

“Unfortunately, Petromin was not given the opportunity to present its financing and economic model to either the Economic Ministerial Committee or the National Executive Council”.

“We believe IPBC is pushing a proposal from one of the foreign owned resource company to protect the commercial interests of that company at the expense of Papua New Guineans”, Mr. Kalinoe said.

Mr. Kalinoe said he believe NEC was not given other options to consider and was misled in accepting the IPBC proposal which is potentially risky and costly to the State.