The True Story Behind William Duma Sacking

PNGBlogs


It is evident that last week’s turn of events by Oil Search have arguably put PNG government a long way out of the chess game and resulting in the removal of William Duma as PNG long term Petroleum and Energy Minister.

* The new arrangement entered by PNG government to directly purchase 10% equity in Oil Search Limited was due to the fact that IPIC could not re-sell the exchangeable bonds that was borrowed in 2008 to finance PNG LNG project equity and that it expires in Mar 16 2014.

* Since IPIC is a long term investor, it was apparent that a take-over from Oil Search by the Arabs was eminent. Hence, the only way to prevent a take-over was to keep the PNG government in play by offering them 10% equity into Oil Search.
Oil Search MD Peter Botten foresee an acquisition of Pac’s 23% stake in the Elk/Antelope gas field will provide the opportunity for PNG government to buy into the company and also give Oil Search the pre-emptive rights to decide on the future of the development of the Elk/Antelope gas fields.

* The material acquisition by Oil Search have put at odds all ambitions flagged by French giant TOTAL and Interoil plans for stand-alone LNG plant in the gulf province. This acquisition by Oil Search also means that TOTAL's deal with Interoil is in limbo because part of the condition stipulated in the contract was for Interoil to acquire Pac’s interest and have them out of the project before they can proceed.

* It is now evident that TOTAL may cut back its 61% stake and sell to another third party, of which Oil Search may exercise its pre-emptive rights and offer it to ExxonMobil for a potential opportunity to enter the Elk/Antelope joint venture. From a layman’s view, it is likely that Exxon was behind all the recent moves so that once it enters as a joint venture, it can take the opportunity to expand the existing PNG LNG plant and provide a quicker development with Oil Search on the Elk/Antelope Gas Resources.

* On the local front, it i most likely that William Duma was considered an obstacle to the arrangement and therefore removed about the same time before the announcement of the purchase. Although it is a win-win situation for Oil Search, Exxon and the PNG government, not enough considerations being offered by the PNG government and Prime Minister to negotiate in the deal. It is likely that the PNG government was only used as a pawn to facilitate the deal. Once again, deals are being bulldozed by corporations and Prime Minister bowing down unknowingly - "yes"no"yes"no".

* Papua New Guinea should start take the lead in all negotiations as this is our land and our resources, we don’t want to play second feeder and only to become spectators in the future. The establishment of Kumul Petroleum must be legislated now, why is the government taking too long and missing out on such big opportunities? Please put your members to task or it will forever be too late!

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