May 24, 2016

PNG Watchdog scrutinizes InterOil takeover by Oil Search

 THE Independent Consumer and Competition Commission says the proposal by Oil Search Limited to acquire 100 per cent of InterOil may be harmful to competition.
Commissioner and chief executive officer Paulus Ain said Oil Search was a joint venture in the PNG LNG project with 29 per cent interest. It also has 22.835 per cent interest in Papua LNG project.
Ain said because of that, the commission was concerned that the proposed acquisition could substantially lessen competition in the natural gas markets in PNG.
“ICCC is therefore urging Oil Search and InterOil as good corporate citizens of PNG to respect the country’s established statutory framework and seek relevant regulatory approval under the Independent Consumer Competition Commission Act 2002, and be protected,”Ain said.
He pointed out that Section 60 of the ICCC Act prohibited acquisition of assets or shares of a business that would have, or would likely have, the effect of lessening competition in a market.
However, he explained that parties could seek exemption by applying for, and receiving, a clearance or authorisation.
“It is advisable to seek clearance or authorisation earlier than later. Depending on the facts available, the ICCC may grant or decline granting the relevant approval Oil Search may apply for,” he said.
“If authorisation or clearance is not sought, the ICCC reserves all its rights under the law.
“In this connection, not only does the ICCC Act provide for injunction, divestiture and pecuniary penalties against the parties involved, but it can also bring action in court against individuals if it is satisfied that a person is likely to have aided, abetted, counselled or procured any other person to contravene Section 69.
“There are large penalties involved which reflect the serious nature of illegal commercial behaviour which recognise the great economic harm that can be caused by anti-competitive business acquisitions and other conduct prohibited by the ICCC Act.”