PNG Govt Blocks Takeover Bid

[Tree]

More PNG ownership of more projects.  Kavo batting for his Gulf Province is no surprise.

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PNG Govt blocks Kulim bid

By Online Editor
5:16 pm GMT+12, 05/09/2013, Papua New Guinea

The Papua New Guinea Government has rejected Kulim (Malaysia) Berhad’s takeover bid for New Britain Palm Oil limited (NBPOL) because it wants to encourage more Papua New Guinean’s ownership of the businesses.
 
Minister for Trade, Commerce and Industry Richard Maru revealed this during a media briefing Wednesday, saying this move by the Government was the start of giving more business opportunities back to the people of Papua New Guinea.
 
He said 90% of the economy was controlled by foreigners, while the nationals remained as spectators and price-takers.   
 
“Currently bulk of PNG’s population is not owners or shareholders of business companies operating in PNG.  
“Therefore, the government wants to see more Papua New Guineans benefit more from investment and business opportunities,” he said.
 
Maru said NBPOL was one such company that carries PNG flag in the international commodities market, adding that it was a national icon and the government would not allow Kulim to acquire anymore shares from other NBPOL shareholders.  
 
“The Government will in the future ask Kulim to sell down some of its shares to the respective provincial governments where the assets of NBPOL are located and the Government will not allow anymore attempt by Kulim to buy anymore shares from New Britain Palm Oil,” Maru said.  
 
He said the Government would restrict full foreign investment or participation of some sectors of the economy and one such was the agriculture sector.  
 
“Investment should be operated by Papua New Guineans in key strategic areas including fisheries and agriculture.  
 
“Joint venture companies are encouraged because in that way, money will not leave our shores”, he said.  
 
Maru said this idea was not to chase foreign investors away but to encourage more national ownership.  
 
Meanwhile, Kulim (Malaysia) Berhad has started proceedings in the National court to set aside orders preventing it from completing its partial general offer for New NBPOL shares.
 
The Securities Commission of Papua New Guinea had imposed the restrictions, saying it was not in national interests for Kulim Malaysia to increase its stake in NBPOL.
 
Kulim is already the major shareholder in NBPOL and wanted to raise its stake from 48.97% to 68.97%.

[jft310]

So the PNG govt owns 20.5 percent of e/a
And can sell part of their interest to Kavo.IOC percentages remain the same

[ArtM72]

For this vision to succeed PNG needs cash to acquire ownership, that is unless it follows the "nationalization" model used by some countries in the past. To get that cash anytime soon they need a large source of income. That income of course will be from LNG.

There may be something a little ironic about OSH's failure to find significant NG in the Gulf. While it makes IOC's position stronger it also may make E/A appear more unique. That is, E/A might be seen by some as Gulf's only ladder out of the hole of poverty and thus something to fight over. The drilling program in the rest of IOC's acreage cannot restart too soon. More gas will relieve the fears of those who believe E/A is that one remaining ladder and thus allow them to stand back to allow the future to unfold.

[jft310]

Reality may be the way the original the Gulf deal was structured. That was the govt and land owners would pay out of differed production revenue receipts. Or IOC would give them a free ride. Do we care if Kavo gets 5 percent and the state 17 per cent. Nope

[Palm]

PNG won't sell any of their interest to Kavo because that comes at sunk cost prices. Per the O&G Act if Gulf wants more than their allotted share (which also is at sunk cost), they must negotiate for it at "market price" and they cannot require the developer/operator to carry that investment. He speaks loudly but some of his demands are easy to have good comebacks for.

[jft310]

PNG won't sell any of their interest to Kavo because that comes at sunk cost prices. Per the O&G Act if Gulf wants more than their allotted share (which also is at sunk cost), they must negotiate for it at "market price" and they cannot require the developer/operator to carry that investment. He speaks loudly but some of his demands are easy to have good comebacks for.

The IOC mgt for years have talked about carrying the govt and landowners.Kavo represents a provincial govt. Not sure ask WA just call for a CC time. Where will Kavo,or the landowners or the PNG govt get any money to pay for their buying. Their last borrow worked out so well! That's what made the 50 percent talk so laughable. Hint they are broke today!

[Palm]

Yeah, well no reason to call WA. I've clearly stated at different times what you say here. And I've spoken to WA about different sections of the O&G Act. No confusion except maybe........

[Putncalls]

Is it time to give up on IOC because of PNG Corruption?

[jft310]

Is it time to give up on IOC because of PNG Corruption?

PNG corruption today is not delaying the deal with Exxon. There certainly have been PNG govt issues in the past. A deal with Exxon would take 4-6 months to close and Exxon has successfully closed a deal with the PNG govt before. The question is when does the clock start running ?May 24th or earlier? Is this closer to a 4 month deal or a 6 month deal. Based on Esso comments this week appears to be closer to a 4 month deal. Would be a shame to sell now and miss the run. I always think of those short shares and ask would they cover with a  $50 or more move up and the answer is always the same . Shares sold short are in a margin account and as IOC rises in price the short seller is required to deposit more money. Very few short sellers would hold on during a rise of that magnitude and more and more longs will pile in for the run. Since you have waited this long a few more days, weeks ,maybe a month of holding makes the most sense.At these prices when IOC is around $69 we have been.adding.

[Palm]

Call Pavel and see if he thinks corruption today is a reason to give up on corruption.

NMEGTDD