Price too high to acquire InterOil: O’Neill

The Government did not participate in the bidding procces of the acquisition of InterOil Corporations by ExxonMobi because the price is too high.

Prime Minister Peter O’Neill told Parliament today that the country could not afford to buy any shares in the acquisition given the current cash flow problem.

However, he said the Government has put both companies on notice that the Government will exercise on its right under the Oil and Gas Act that enables it to 22.5% shares as soon as the proposals put out by the operator of the fields.

O’Neill was responding to Gulf Governor on the position of the Government on the acquisition of InterOil by ExxonMobil.

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 announced an agreed transaction worth more than US$2.5 billion on July 21, under which ExxonMobil will acquire all of the outstanding shares of InterOil.

However, O’Neill said all the licenses by InterOil will be renewed in the next 12 months.

O’Neill added that he had written to Government officials to give notice to both Total and ExxonMobil that no licenses will be given until the Government gets the full development proposals.

Total will be developing the second LNG Project, ‘Papua LNG’ in the Gulf Province.

Freddy Mou