K3bn in deals for NPCP

 THE National Petroleum Company of PNG (NPCP) last year completed a series of transactions totalling US$1.3 billion (K3.38bn), it announced yesterday.

NPCP says the transactions were to pay for the state’s interest of 9.81 per cent ($149,390,244) in Oil Search, repay the existing bridge facility to UBS and fund existing working capital requirements (stemming from its existing licences).

The transactions were made possible through a financing arrangement with the three commercial banks – ANZ, Bank South Pacific and Westpac of about US$520 million. 

Managing director Wapu Sonk praised the commercial banks for their confidence in NPCP.

“The receipt of the Oil Search shares would increase the exposure of the company to the PNG LNG project and all the oil and gas fields operated by Oil Search,” Sonk said.

“This transaction fits within our overall strategic objective of NPCP having increased participation in all oil and gas business in PNG.” 

Sonk added that the recent purchase of interests from Australian company- Cue in PNG for A$7 million was another example of NPCP meeting its objective. 

He highlighted that “NPCP was able to complete the transaction on the back of its growing balance sheet post early exports of condensate and LNG last year. 

NPCP general manager finance Robert Acevski noted the complexity of the transactions given the various interests in the deal and the different financial tools underpinning it. 

“The competing interests required considerable negotiation to reach acceptable commercial outcomes,” he said. 

“This is an important series of transactions for NPCP as it emerges to become operational as the PNG National Oil Company. 

“NPCP has used its in-house expertise to go to the market and negotiate and drive these outcomes, and it gives me great faith in our people and capabilities to complete such a transaction so early in our history. 

“This bodes well for our potential future development pipeline that will require further deals such as this one”.

Praising the efforts of those involved, chairman Frank Kramer said: “This transaction is an example of the group’s move from passive participation to active investment in the hydrocarbon sector and leveraging our resources to create value from the opportunities that present themselves to us so that we can produce sustainable wealth for our people and our nation.”