MELBOURNE, March 25 An independent commission
has blocked the Papua New Guinea government from taking up a
A$1.2 billion loan it lined up to buy a 10 percent stake in PNG
oil and gas producer Oil Search, Radio New Zealand
reported on Tuesday.
PNG's Ombudsman Commission has frozen the loan while it
investigates whether Prime Minister Peter O'Neill followed all
the correct legal procedures in deciding to borrow the money,
Radio New Zealand's PNG correspondent said.
In February, O'Neill approved plans for the government to
buy new shares in Oil Search, giving it just over a 10 percent
stake for A$1.2 billion. That allowed the government to gain a
new stake in Oil Search after it gave up a bigger holding to Abu
Dhabi in a A$1.68 billion convertible bond deal.
The move to borrow $1.2 billion from UBS was
opposed by former treasurer Don Polye, who said it breached
budget guidelines and was done without approval from parliament.
Polye was dumped by O'Neill earlier in March.
Oil Search sold the shares to the government to fund a $900
million acquisition of a stake in PNG's biggest undeveloped gas
fields, the Elk and Antelope fields. The share sale and deal
were completed earlier in March.
A PNG government official was not immediately available to
comment on what could arise out of the Ombudsman Commission's
(Reporting by Sonali Paul; Editing by David Gregorio)