The country has made a saving of $AU400 million from the K3 billion UBS loan which Prime Minister Hon. Peter O’Neill described as the best deal for Papua New Guinea. Prime Minister Hon. Peter O’Neill, explaining the deal on FM100 talkback show on Friday, said this is not a new loan but one that replaces the IPIC loan with better terms and interest rates without breaking any laws of the land He said when the Government under the Somare regime went out in 2008-09 to negotiate for the LNG project, PNG government had no money to pay for its 19.4 percent shares in the project.
He said the government negotiated with the Arabs to get what is now the IPIC loan and in turn mortgage all government assets like Air Niugini, PNG Ports and all other assets held under IPBC and the General Trust. Prime Minister Hon. Peter O’Neill said the agreement was that by March 6, 2014, PNG government was to repay the loan at $AU8.55 per share and to repay the loan also include buying back Oil Search shares.
He said the Central Bank, IPBC and Treasury were tasked to go out and conduct a bidding process from banks to borrow money to buy back those shares. He said when the bidding process was conducted the Central Bank, IPBC and Treasury recommended to government that they have found the loan from UBS to be most competitive in terms of interest rates, in terms of repayment and so forth and government gave notice to the Arabs that it now has the money. Prime Minister Hon. Peter O’Neill said the government wanted to buy back but the Arabs wrote back to advising that they wanted to keep the shares. “The government had to find a way to get some shares because our people need to own their own resources, so Oil Search was prepared to go to the market to do their own business transactions with the Gulf Oil project.”