K3bil gift to Oil Search

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THE Peter O’Neill government’s Union Bank of Switzerland (UBS) loan transaction in 2014 was simply a gift of US$900 million (K3bil) to Oil Search Ltd, former Treasurer and Aitape-Lumi MP Patrick Pruaitch told a commission of inquiry yesterday.
Pruaitch told the inquiry that Parliament had not approved the loan as required under the Constitution. He said Oil Search used the funds to procure PRL15, the Elk and Antelope fields.
The former treasurer under the O’Neill-Leo Dion government said “UBS transaction was not a good idea.”
When questioned about the consequences of the UBS loan, Pruaitch said “We lost Oil Search shares and ended up with nothing”.
“Sadly, the 10.01 per cent Oil Search shares which we bought have been sold so today we have zero shares on Oil Search share register,” Pruaitch said.
“In effect, Oil Search Holdings Ltd got out A$1.2 billion (K3bil) whilst the people of Papua New Guinea got nothing and yet we are stuck with a debt burden of A$1.2 billion plus an unidentified array of losses.
Pruitch said under Section 209 of the Constitution, it was mandatory for any loan sourced outside the budget process to be passed as a law by Parliament.
“As a minister in the O’Neill government back in 2014, I can confirm that Parliament did not approve the UBS transaction,” Pruaitch said.
“The National Parliament had no part in facilitating the UBS loan.”
“It was the Department of Prime Minister and National Executive Council that facilitated the NEC submission that approved the UBS loan.
“The proper process would have been for the submission to be initiated by the Treasurer and Department of Treasury, and screened and vetted by the Ministerial Economic Committee prior to the matter being considered and approved by NEC,” he said.
O’Neill told the inquiry last month that seeking parliamentary approval for loans had not been practised in the past
When asked by inquiry chairman Sir Salamo Injia of his understanding of Section 209, O’Neill responded: “It reflects on the government’s annual budget, that government puts to parliament about raising of capital, raising of loans and of course raising of revenue and expenditure of the national government.”
The loan was to buy shares in Oil Search, which was one of the partners in the PNGLNG project, but the company’s share prices fell sharply following the purchase, amid declining prices for commodities.
Pruaitch’s appearance was adjourned to Aug 3.


    • Totally agree. What’s the purpose of the COI if those implicated don’t pay time for there I’ll doings and crimes

  • If I recall correctly, Kerenga Kua and Don Polye left O’Neill after this and other seemingly corrupt deals.
    However, this clown and James Marape buried their heads in the sand and stuck with O’Neill as if everything was OK.
    Anyone in O’Neil’s cabinet who carried on after the deal are all equally responsible.
    O’Neill can not be the sole culprit in this dirty trick.
    PO, it is time you come and offload some of the blame.

  • Oil Search should forfeit its share and equity in Papua LNG to the state 100%. Otherwise it can leave PNG whole togather.

    • Several ministers including Don Polye, William Duma and Kerega Kua were against the UBS loan resulting in William Duma and Don Polye being stripped off their ministerial portfolios and Kerega moving to the opposition.

  • They don’t have the capacity to pay and they will NOT pay. Just confiscate all their assets and send them all to jail.

    This includes all and any members in the current government, including all public servants involved.

  • Lets just accept the fact that we the civilians who have no idea at all that such loan (UBS) was taken and start live with the new normal that we including our future generation will repay this debt.

  • Agree with Wawada’s Kamada’s comment.
    The taxpayers now and in the future will pay the debt.
    The people in charge of Oil Search during that time from the MD up the board members and MPs involved in the UBS loan should be held accountable by taking them to court by the Independent State of Papaua New Guinea.

  • Let the commission of inquiry be completed, it’s report be published in full. All those implicated should be delt with accordingly and as expected. Pruitch is now coming out clear but pretended and supported P’ONeil. Something can be done.

  • Someone or some people have benefited from that loan. Please have them arrested and confiscate all their properties here and abroad and send them to jail.

  • No No Papua new Guinea’s we won’t let and watch while only few and those who we vote them to Parliament continue to devide and rule for personal interest, it’s obviously anybody knows and can make decisions upon the USB loan.
    Papua new Guinea’s we cannot bear this for long ,we need a rebellion to stop once and save our country our people and our resources…..come let’s talk

  • Water under the bridge. Why expose this now? Stop playing politics with ordinary peoples lives. Of you want to lead us be the leader that we deserve!

  • Penalize the culprits who sunk PNG with their extremely poor decision making. Make them repay as many of them are already millionaires from our tax money. Sell their assets. Let is be a testament to all leaders now and into the future. Those responsible should never be allowed to lead PNG again in any capacity if they can’t interpret the constitution correctly or turn a blind eye on it. Prove that we have one law for all people and we respect the rule of law!

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