Oil Search share buyback will help repay PNG’s loan

 PRIME Minister Peter O’Neill made some crucial decisions last week, especially the harsh action to buy back the Oil Search Ltd (OSL) shares. 

I think the buyback of the shares at K17.75 was a wise decision for future significance despite the risks involved because OSL is the second major investment partner in the LNG project. 

When the first LNG batch is exported sometime this year as scheduled, investor confidence in OSL and the PNG economy will increase and therefore cause the OSL share price and kina value to soar as well. 

This may inevitably double or triple the state’s share portfolio value. 

PNG’s debt level has increased from K3 billion to K6 billion, but this will be short-lived. 

When the LNG sales profit appropriated for the state is received, the K6 billion loan will be repaid in less than five years. 

Isaac Jipsy

Nipa-Kutubu