Oil Search loan deal will affect Papua New Guinea’s Sovereign Wealth Fund

By Paul Barker/April 1, 2014
DEVPOLICY BLOG PNG

Papua New Guinea’s proposed Sovereign Wealth Fund was intended to stabilise the kina and secure assets for the future. 

But, as Paul Barker from the Institute of National Affairs argues, the government’s borrowing plan for Oil Search shares may jeopardise the fund’s effectiveness.

The proposed Sovereign Wealth Fund (SWF) is somewhat jokingly referred to by some as the Sovereign Wealth Vacuum, as we await the government to release its revised legislation setting up the fund.

The original idea was to put income from resource projects into the fund (held largely in safe offshore securities) and use those investments to stabilise the currency and provide some core development expenditure, whilst providing confidence for investors etc in PNG’s economic management.

The UBS loan and IPIC deal by the Governemnt of Papua New Guinea

Vincent Moses/Commentary on PNG NEWS Page

Facebook/30th March, 2014 12:04 PM

There was only one loan and that is UBS, and IPIC deal was not a loan. Papua New Guinea Government has sold our Oil Search shares to IPIC to raise $1.7b to fund our equity (19.6%) in the PNG LNG Project. 

At the time Oil Search shares were only worth $5 and not worth the $1.7b we needed. So we sold them under a special share sale agreement on its future value being $8.55. What believed the share price will be worth upon completion of the LNG Project in Mar 2014.

To get IPIC to agree to this deal certain securities (collateral) were put in place IPBC SOE's to underwrite the difference between what the shares were worth at the time $5 and future prices of $8.55. The difference we still owed on the sale. This difference was executed under an exchangeable bond arrangement or asset swap that IPIC held on and PNG Govt would be required to pay interest on until the sale agreement expired in March 2014.

Pomio MP Paul Tiensten Convicted for 9 years Imprisonment with hard Labor

By Sam KOIM

Facebook/Friday, 28th March, 2014 5:40 PM

MP for Pomio, Paul Tiensten

Mr Paul Tiensten, Member for Pomio and Former Minister for National Planning was today sentenced to nine (9) years imprisonment with hard labour. Four years of those will be deducted upon him repaying to the State the K10million that was paid to Travel Air under his direction. If he fails, he will serve the full 9 years. 

The sentence is 1 year short of the maximum penalty of 10 years for misappropriation cases under Section 383A of the Criminal Code Act. Has was taken to Bomana Correctional Facility immediately after the sentencing.

Important features to note from this decision are that Mr Tiensten is going to jail for making a footnote on a project proposal that compelled the officers of National Planning to bypass the lawful processes and procedures in making that payment. 

Also, Mr Teinsten did not personally benefit from the proceeds directly but directed the funds to be paid for the use of Travel Air. The Court placed consideration of the breach of the trust placed on him and the prevalence of the offence in the society. 

Note further that though Parliament has recently amended the sentencing range for fraud of K10m plus to be up to 50 years, this case was instituted prior to the amended law hence does not have retrospective effect.

This is the first investigation that Task-Force Sweep conducted when it was established in August 2011. Though it took time before the final verdict on sentencing, justice has been finally served and we are satisfied. We respect the independence of the judiciary in disposing cases at its own pace and in this instance, we applaud the decision.

The 'Sevua Report' on the long standing PNG University of Technology issue

PNGBlogs Exclusive "THE SEVUA REPORT" - Dr Albert Schram’s Innocence Is Confirmed
By NATIONAL WHISTLE-BLOWER

“We therefore find that in all circumstances Dr Schram was wrongfully terminated from employment as Vice Chancellor of the University of Technology”. The statement above represents the final conclusion of the Sevua report’s investigation of the former Unitech Council’s allegations against Dr Albert Schram. 

The 2012-2013 campaign against Dr Schram is repulsive to any academic community and would not be tolerated in any civil society. The government’s tendency to fabricate charges to deport unwanted non-citizens extends well beyond Dr Schram (also used with SDP media writer Mark Davies, the story reported earlier in PNGBlogs.com). 

The PNG government’s current expulsion without a convincing reason of non-citizens who it views as being a threat violates the basic human rights guaranteed in the PNG constitution (which extends to non-citizens as well as citizens), is unbecoming of any nation that claims to be civilised, and casts a shadow of shame upon the country.

The Sevua investigation Terms of Reference were originally constructed with the input of former Uni-tech Pro Chancellor Ralph Saulep (principal foe of Dr Schram and implicated in the attempt to terminate him without cause). Five of the 6 TORs focus only on Dr Schram. This was a purposeful attempt by Ralph Saulep, approved by Peter O’Neill and then-HERST Minister David Arore, to create a one-sided investigation that would destroy the Vice Chancellor. Only through Saulep’s sloppy wording of TOR item #6 did retired Judge Mark Sevua find the open door to examine all sides of the issue, allowing him to produce a remarkably objective report. 

Prime Minister Hon. Peter O’Neill did NOT approve Paraka bills says Finance Minister James Marape

PNC People's National Congress

Facebook, 26th March, 2014  4:56PM

Minister for Finance James Marape maintains that Prime Minister O'Neill has never issued instructions for the Department of Finance to pay Paraka Lawyers claims unless the 

Attorney General clears the bills.

Finance Minister James Marape

 This stand was made by Prime Minister Hon. Peter O’Neill, when I consulted him as to whether the PNG government were to pay Paraka Lawyers when the Department of Finance was presented with a Paraka Lawyers invoice for K36,083,599.65 on October 4, 2012.

I was clearly instructed by Prime Minister Hon. Peter O’Neill NOT to pay Paraka Lawyers invoices. The Attorney General also asked for further assessment on the same invoices. I placed an immediate stop to any /all payments of these invoices on the 31st of October, 2012. This superseded all earlier instructions and exchanges in regards to this claim by Paraka Lawyers.

When I made reference to the Prime Minister Hon. Peter O’Neill on the earlier letter of January 2012, with regards to some lump sum payments that had already been approved and taken place in early January by then Treasurer and Finance Minister Polye. The Prime Minister mentioned to me, that he had no knowledge of this payment approval, and this had happened without his consent.

Former Treasurer Don Polye spills the beans on parakagate saga

Zera Pii Maua>THE ENGA POLITICS PAGE

3:45pm 25th March, 2014

Hon Don Polye MP is on air now on FM 100 radio station and reveals today (25.04.2014) to live audience in Papua New Guinea that:

1. He refused to sign K3 billion loan sought by Prime Minister Peter O'Neil from UBS in Zurich. Thats why he was sacked as Minister for Treasury & Chairman of World Bank and IMF.

2. He was pressured by the Prime Minister to sign the letter directing Treasury to release warrant to pay Paul Paraka Lawyers a total of K71.8 million. The letter was NOT forged as Prime Minister stated but was actually signed. Hon Polye says he was told by Prime Minister to go ahead and process this multi million payment.

3. PNG right now has more than K8 billion in national debt. Its.more than the economic capacity to service this massive debt.

4. That Prime Minister has never consulted all coalition party leaders to get consensus to go ahead and secure K3 billion loan from UBS. This was all driven by one man, Prime Minister himself for his good.

The above are comments by Hon Don Polye MP live on radio FM 100 now.

Response from Papua New Guinea Deputy Opposition Leader Samuel H. Basil to the Full Page Advertisement on the Oil Search Share Purchase

Sonja Barry Ramoi>THE ENGA POLITICS PAGE
23rd March, 2014 10:52PM

Response from Papua New Guinea Deputy Opposition Leader Samuel H. Basil to the Full Page Advertisement on the Oil Search Share Purchase

Congratulations to the Prime Minister of Papua New Guinea, Peter O’Neill, for spending the people’s money to cover his government’s corrupt practices, in relation to the Oil Search share purchase that he solely authorised, for his benefit and the benefit of Oil Search and NOT the people of Papua New Guinea (PNG).

The Opposition has clearly been providing evidence of the corrupt practices of this Prime Minister over the last 6-12 months. The Opposition, as the alternative Government, has been working on the fact and the detail of what this Prime Minister is presenting, and demonstrating for the people, what is actually occurring rather than the lies directed upon us by O’Neill. 

I think the average Papua New Guinean citizen know why Polye and Duma were sacked, in light of the pushing through of the UBS loan without any legislative checks and balances; thus, I urge them to join the Opposition ranks and by not doing so implies that O’Neill has got them in a blackmailing situation they cannot move from.

Prime Minister, the Opposition provides the response to your article with facts. You can criticise the Opposition and accuse us of all sorts of nonsense. But the nation is listening to what we are raising as you are running the Government single-handedlyfor your own personal gain. Again I repeat, you are making decisions for your own personal gain and the questions we pose in this article, we already know the answers to.

Commissioning and testing at Hides Gas plant is another milestone reached by ExxonMobil

By Joe WASIA

The Papua New Guinea’s economy changing project, the PNG LNG, operator ExxonMobil has reached another milestone yesterday when it tapped on its turbine at Hide Gas Conditioning Plant for testing and commissioning of key facilities and equipment.

It marked another milestone after construction work at different sites of the project for more than 4 four years. The US$19 billion PNG LNG project is now more than 95% complete and remains on budget and on track to deliver its first cargoes in the second half of this year.
To the eyes of many, especially local communities, employees and contractors it may mean something less when they saw the flames at the plant site but it is an achievement and a milestone reached by the world’s energy giant, ExxonMobil.

The current gas flow is from Oil Search’s Kutubu Central Processing Facility (CPF) in Southern Highlands Province to HGCP in Hides. Kutubu gas project has been in operation for more than 20 years now. 

The project was initially constructed and operated by Chevron Niugini Limited in early 1990s and later PNG’s leading oil company, Oil Search Limited, took over more than 10 years ago. During the period of this gas project operation the companies extracted only oil.

Exxon Mobil Corporation’s subsidiary Esso Highlands Limited and Oil Search agreed to pipe the unused gas into PNG LNG plant in Hides. So it has two different pipes running from Oil Search’s Kutubu Central Progressing Facility to Exxon’s Hides Gas Conditioning plant in Hides Hela Province.

Dr Albert Schram allowed to return

After a three week boycott, students at the university of technology have won a small but significant victory.

The Justice Minister, Kerenga Kua, has given an undertaking that he and other government ministers will facilitate the return of Dr. Albert Schram to Papua New Guinea. "If you are in contact with Dr. Schram, please tell him to loge an application for a visa at the nearest PNG consulate."

Mr. Kua, has also directed government lawyers to remain in Lae this weekend to prepare documents to set aside a court order preventing Dr. Schram from returning as Unitech Vice Chancellor.

The compromise was reached after a four hour meeting between students and five ministers including Higher education Minister Delilah Gore, Police Minister, Robert Atiyafa and Trade Minister, Richard Maru.

The Higher education Minister will also table the Sevua investigation at a Cabinet meeting on Wednesday and will travel with the same delegation to Lae on Thursday to make the announcement.

Meanwhile, classes will remain suspended until Dr. Schram's return is finalized.

'I accept my sacking' ousted Treasury Minister Don Polye says

Don Polye, MP

By ISAAC NICHOLAS
Post Courier, 12th March, 2014  

SACKED Treasury Minister Don Polye has made it clear that THE Party will continue to maintain the coalition government solidarity.

Mr Polye, flanked by Deputy Prime Minister Leo Dion, went to the Prime Minister's office in Parliament to present THE Party parliamentary wing resolution after their caucus meeting on Monday night.

The meeting followed the Prime Minister's sacking of Mr Polye and his Southern region deputy leader Mark Maipakai.

Mr Polye called a media conference with party members including Mr Dion, Mr Maipakai, Mendi MP De Kevanu, Lagaip-Porgera MP Nixon Mangape and Chuave MP Wera Mori to state that it was the prerogative of the Prime Minister to commission and decommission ministers, which his Party respects.