The consumer watchdog, Independent Consumer and Competition Commission (ICCC) have threaten to seek legal advice if the propose acquisition of InterOil by ExxonMobil proceed through.
In a statement released on Monday, ICCC Commissioner, Paulus Ain says the proposed acquisition may raise competition issues under section 69 of the ICCC Act.
“If the transaction proceeds without a clearance or an authorization from the ICCC, we reserve our rights to institute legal action in Court to challenge the acquisition, if we ultimately form a concluded view that the acquisition would have some serious negative implications on competition,”
He said the ICCC aims to prevent monopolisation that may harm markets in PNG by reducing competitive tension and thus impeding development.
“ExxonMobil is the leading joint venture partner and the operator of the PNG LNG. If this proposed acquisition proceeds, it will give ExxonMobil about 36% stake in the Papua LNG project and other potential LNG projects in the acreages that InterOil has license to,” Says Ain.
Ain said these interests would consolidate ExxonMobil and make it a significant stakeholder in the natural gas projects.
He added that it is better to safe guard this potential natural gas industry from being monopolised (by the current PNG LNG JVs) which may shut out possible competition in the future.
Ain said the ICCC raised similar concerns when Oil Search Limited (who is also a joint venture partner in the PNG LNG) announced its proposal to acquire InterOil in May this year.
“The ICCC requires a proper opportunity to analyse independently the likely effects on competition. That can occur if an application is made to the ICCC either for a clearance or authorisation of the proposed acquisition,” he said.
ExxonMobil will be acquiring InterOil shares in a transaction worth more than US$2.5 billion (K7.64b) after the termination of Oil Search offer to purchase InterOil shares.
This will see the international oil giant owning InterOil petroleum licenses in Papua New Guinea.
Exxon Mobil Corporation and InterOil Corporation on July 21, 2016 announced an agreed transaction worth more than $2.5 billion, under which ExxonMobil will acquire all of the outstanding shares of InterOil.