PM slams IPIC deal

Main Stories, National

The National, Monday 28th November 2011

PRIME Minister Peter O’Neill says the IPIC A$1.68 billion LNG project financing deal was done in secrecy and neither the National Executive Council nor parliament were briefed.
He revealed this during debate on the Independent Public Business Corporation (IPBC) report tabled in parliament last week.
The report revealed that a lot of mess had been created by entering into bad deals.
O’Neill said the A$1.68 billion deal to finance the state equity in the LNG project from the Middle East state of Abu Dhabi had a downfall of K900 million which the government had to pay even before receiving any revenue from the LNG in 2014 .
He described this as a bad deal as through the financing the state share in Oil Search was mortgaged while decisions on all SOEs had to be made by Abu Dhabi.
“Arab will continue to win even if the prices go up or down. They have the upper hand because we have sent the boys to play the men’s game,” O’Neill said.
He said the deals were made at IPBC by former minister Arthur Somare who controlled everything in the former government.
O’Neill said the treasury department was not involved in the deal but now they would have to.
However, Southern Highlands Governor Anderson Agiru claimed later at a press conference that the downfall was a result of the transaction which was determined by the stock market exchange rate.
He said they locked the A$1.6 billion loan through the Oil Search mortgage but to take part in the PNG LNG project, they had to go through the US stock market because ExxonMobil shares were listed in the US, which had resulted in a shortfall of K900 million.