Posts Tagged ‘Oil Search Limited’

UNDP head denies endorsing Paga Hill Development Company evictions

June 12, 2017 Leave a comment

Settlers moved from the foreshore at Paga Hill to the inland site of Gerehu, where they live in appalling conditions.  Photo: Aid Watch

Port Moresby settlers evicted to make way for Australian-backed development ‘abandoned’

Source: Heath Aston in Sydney Morning Herald

A majority of settlers evicted from a headland shanty town in Port Moresby to make way for a gated tourism and casino precinct backed by Australian property developers have been “simply abandoned”, with some now sleeping rough, according to human rights investigators.

Two Australian-run companies involved in moving squatters from waterfront Paga Hill and its foreshore between 2012 and 2014 dispute the numbers of people affected, but charities Aid Watch and Jubilee Australia claim 2000 of an estimated 3000 squatters were given no resettlement and in many cases no compensation, and up to 500 of those could be living on the streets of the capital.

They have also raised questions about the claimed success of resettlement programs for those relocated to make way for a gated waterfront estate that the PNG government has earmarked as a likely setting for the 2018 APEC conference of world leaders.

Australia is spending about $100 million to support the Port Moresby APEC summit, with a particular focus on security through the ongoing presence of the Australian Federal Police in PNG.

The brochure for the Paga Hill development showing the headland that has been cleared for development. Photo: Paga Hill Development Company

Former prime minister Tony Abbott said APEC would be “an important coming of age for PNG”.

Australian mining company Oil Search is building a floating reception centre to be called APEC Haus at the Paga Hill headland.

Human rights lawyer Brynn O’Brien, who is writing a report for Jubilee and Aid Watch, said Australia had a responsibility to the people of Paga Hill if it was backing the APEC meeting with public money.

“The Australian government should make a commitment not to support any event held on land associated with human rights violations until people have been resettled,” she told Fairfax Media.

Six Mile, another site were people were moved to. Photo: Aid Watch

“The majority of people were simply abandoned and a significant proportion of those, perhaps a quarter, are living under bridges, under buildings.”

The evictions, conducted with the support of armed PNG police, were raised at a recent senate estimates hearing where the Department of Foreign Affairs and Trade’s first assistant secretary, Pacific division, Daniel Sloper, said it was not Australia’s responsibility.

Another humpy at Gerehu. Photo: Aid Watch

“Certainly there have been areas and villages that have moved on. I am not denying that at all,” he said.

“My only point was that was a responsibility of the PNG government rather than a responsibility of the Australian government.”

Paga Hill was once the focal point of Australia’s World War II defence of Port Moresby. The thousands of settlers who moved there in the decades after 1945 became known as “bunker people” for their use of abandoned wartime fortifications to create makeshift homes.

The Paga Hill Development Company is run by Icelandic-Australian businessman Gudmundur “Gummi” Fridriksson, a former chief executive of Noel Pearson’s Cape York Institute.

Last year Fairfax Media revealed a legal wrangle in which one PNG’s most revered former politicians, Carol Kidu, and the Paga Hill Development Company sought to block the release of an Australian documentary, The Opposition, about local resistance to the evictions.

Ms O’Brien interviewed people who were moved from the foreshore by Townsville-based civil contractors Curtain Bros, with the support of PNG’s National Capital District Commission to an area called Gerehu on the outskirts of Port Moresby.

She found at least 600 people living in homes made from “pieces of wood, sticks, fibro, sheet metal, tarpaulins” and without power or running water.

“At Gerehu lots of the adults and children are noticeably thin even by PNG standards, they appear malnourished. At Paga Hill their main source of protein was fish caught from the sea but this site is inland with no reliable public transport” she said.

Curtain Bros did not return calls.

At another resettlement site, known as Six Mile, the original facilities built by PHDC in 2014 are badly run down. The company offered resettlement of cash compensation for people living on the hill rather than those living on the foreshore and in other areas.

Of the estimated 400 people at Six Mile, according to Ms O’Brien, most remain in temporary accommodation – tents under a steel shed roof – because they can’t afford to enter into the “land use agreements” that were offered.

A Paga Hill Development Company spokesman said:

“PHDC cannot be held responsible for the relocation site almost three years after it was formally handed over in October 2014 to UN acclaim.”

The UN’s support for the project is in dispute.

Roy Trivedy, the United Nations’ resident co-ordinator in PNG, said he attended one meeting where he was impressed with written plans for the resettlement but has not been involved in anything to do with Paga Hill since.

“I’ve asked the company to stop using my name to endorse something I haven’t seen,” he said.


National Provident Fund Final Report [Part 44]

October 6, 2015 1 comment

Below is the forty-fourth part of the serialized edited version of the National Provident Fund Commission of Inquiry Final Report that first appeared in the Post Courier newspaper in 2002/3.

NPF Final Report

This is the 44th extract from the National Provident Fund (now known as NASFUND) Commission of Inquiry report. The inquiry was conducted by retired justice Tos Barnett and investigated widespread misuse of member funds. The report recommended action be taken against several high-profile leaders, including former NPF chairman Jimmy Maladina. The report was tabled in Parliament on November 20 by Prime Minister Sir Michael Somare.

Executive Summary Schedule 4G Continued 

This was corrected by regazettal on April 15, 1996, but meanwhile all previous transactions in OSL or NML shares exceeding K500,000 between January 26 and April 15, 1996 were invalid, as they still required specific approval from the Minister.

In paragraph 4.4.6, the commission indicated that several of the sales of OSL shares in 1996 were without NPF board approval.

Furthermore, BPNG approval for the sales had been on the condition that the proceeds of the sale must be brought back into the country. This did not happen as Mr Wright authorised the brokers, Wilson HTM, to use the funds to purchase other ASX listed shares.


(a) THE sale on February 14 and 15, 1996 of 1,000,000 shares for $A1,316,288 and the three sales after May 27, 1996, totalling 1,000,000 shares were not authorised by the NPF board;
(b) MR Kaul and Mr Wright were responsible for these unauthorised sales in breach of their duty to the NPF contributors;
(c) THE NPF board contravened Section 61 of the PF(M) Act for any shares sold without Ministerial approval prior to April 15, 1996, where the value of the sale transaction was more than K500,000;
(d) THE NPF board contravened Section 61 of the PF(M) Act for any shares sold without Ministerial approval on and after April 15, 1996, where the value of the transaction was over K1,000,000;
(e) MR Kaul failed in his fiduciary duty to the members regarding sales not authorised by the board;
(f) MR Wright failed in his duty to NPF for his part in these unauthorised sales;
(g) NPF had clearly sold the two million shares before it obtained Internal Revenue Commission of Papua New Guinea (IRC) Tax clearance and the BPNG approval. This contravened the requirements of the BPNG and the IRC; and
(h) BASED on NPF’s Wilson HTM statement (Commission Document 748), the proceeds from the sale were used to purchase other ASX listed shares. The proceeds were not brought back into Papua New Guinea as directed by the BPNG.

Transactions In OSL Shares 1997-1999 

In 1997, NPF held no OSL shares and there were no transactions.

On December 16, 1998, NPF management purchased 222,000 OSL shares through Wilson HTM and then sold them on January 17, 1999, for a loss. The NPF board was never informed about these two transactions. The transactions may have been required by Mr Wright to obtain share scrip as security for his unauthorised transactions in options, which were occurring at that time.


(a) THE NPF board did not approve the purchases and sales of 222,000 OSL shares in December 1998/January 1999;
(b) THE officers responsible breached their duty and may be personally liable for the loss, unless it can be shown that their actions were “in good faith”.


OSL paid dividends between 1992 and December 1999 of $A59.046 million. NPF received dividends of K49,500 in 1995 and K20,000 in 1996.

Concluding Comments

The main features of the NPF’s investment in OSL was the fact that it held a relatively safe and profitable dividend-providing investment in a large and proven PNG resource company.

Mr Copland, Mr Kaul and Mr Wright seemed driven to become in-volved in more risky smaller ventures in which NPF could have some control and in which there was a chance of a windfall from corporate takeovers and the like.

To fund such an investment with more “upside”, management decided to sell off the OSL investment. Making a grave error in judgment and without expert investment advice, management sought approval from the Board of Trustees, by circular resolution, to sell off the OSL shares and invest the proceeds of the sale by acquiring shares in NML.

In gross breach of fiduciary duty the trustees approved.

Thereafter, management set the pace for a total sell-down of OSL, often proceeding without board approval and sometimes without the board’s knowledge.

NPF management, particularly Mr Wright and Mr Kaul, and the NPF trustees, were in breach of their duties to the board and to the members of NPF in their handling of this investment.

Executive Summary Schedule 4H Orogen Minerals Limited 


NPF’s investment in Orogen proved to be moderately profitable as shares purchased at $A29,487,447 (K32,241,239) were sold at $A30,809,481 (K42,229,956), resulting in a realised capital gain of $A1.32 million (K9.9 million). In kina terms, this represents an annualised return on capital of 10 per cent per annum for the period NPF held this investment. In addition, NPF received dividends of K2,506,627. Between April and June 1999, the investment had to be sold off to relieve NPF’s debt burden.

From start to finish, however, this investment was marred by NPF management’s cavalier approach to its obligation to properly brief the Board of Trustees about transactions being undertaken on behalf of NPF. Management also failed to obtain expert independent advice regarding its large initial investment in Orogen and subsequent “on market” purchases.

It also failed to seek such advice and provide it to the board when Orogen share prices fell steadily from 1997 onwards.

These breaches in management’s common law duties to the NPF board are dealt with in detail in the text of the report and in the list of findings in paragraph 8.

To some extent, the trustees were therefore “kept in the dark” about unauthorised transactions and management did not properly advised them about the risks and prospects of this investment.

Nevertheless, the trustees also failed in their fiduciary duty to maintain control of management and to challenge management over its failure to provide proper advice to the board.

The trustees also failed to criticise and reprimand management about those unauthorised transactions, which were subsequently disclosed to the board.

The trustees breaches of fiduciary duty to the NPF members are detailed within the text and in the list of findings at the rear of the report.

Investment In Orogen 1996 

The most serious breaches of duty occurred at the commencement of this investment.

There were known risks associated with investing in Orogen as Orogen intended to invest in PNG resource stock, which is inevitably risky.

Despite these known risks the trustees approved an investment of K34,999,640 for 20 million shares in the initial share issue with very little discussion taking place and no expert investment analysis regarding the proposal. Management (Mr Kaul and Mr Wright) and the trustees all failed in their duty, in this regard.

The Department of Finance (DoF) analysis of this investment was very inadequate and it gave an unsubstantiated recommendation for the Minister to approve the investment. Although the full number of 20 million shares was cut back, management acted without board authority to purchase additional shares “on market” (through the stock exchange) at a higher price than the board had approved.


(a) MANAGEMENT (specifically Mr Wright and Mr Kaul), were in breach of their duty to the board by not providing independent expert investment advice before recommending an initial investment of K34,999,640 in Orogen, which involved significant investment risks;
(b) THE trustees failed their fiduciary duty to the NPF members by approving the investment of K34,999,640, without first seeking independent expert investment advice;
(c) THE NPF management did not obtain board approval before making additional transactions through book building or the additional “on market” transactions at higher prices than the board had approved;
(d) MINISTERIAL approval was obtained after NPF had contracted liability, which it had done so without board authority. The Minister failed to query or reprimand NPF about this breach of Section 61 of the PF(M) Act;
(e) WHERE NPF management acted in excess of their delegated authority and without the Board of Trustees approval, they were in breach of their duty to the NPF. If losses occurred, the officers concerned may be personally liable, unless they can successfully claim that they “acted in good faith”;
(f) THERE is no clear documentary evidence to conclusively show who initiated these transactions, however Yamyam Gire and Haro Mekere have given evidence (Transcript pp. 2558 – 2576 and 4104-4106 respectively) that during the period in question, Mr Wright usually gave instructions to the brokers. Mr Kaul has said that in most cases he was aware of Mr Wright’s transactions and would have approved, at least implicitly (Transcript p. 5090).
Other confidential evidence available to the commission confirms that it was usually Mr Wright who gave instructions to Wilson HTM;
(g) MR Kaul’s letter of the November 15, 1996, (Exhibit OR44), expressly showed that NPF requested Ministerial approval after liability had been contracted. Mr Haiveta’s response (Exhibit OR45) does not say anything in relation to this obvious breach by NPF. Mr Haiveta was remiss in not criticising NPF and demanding that Ministerial approval be obtained before NPF made acquisitions that required such approval.

Investment In Orogen 1997 Sales 1997 

On May 5, the NPF board meeting resolved to “approve in principle as a matter of policy that where required a certain parcel should be realised where the need to use some cash arises in investment initiatives . . .”.

The minutes show that Mr Copland advocated this policy so that NPF could “realise some of the shares into cash and invest in areas where the board will have influence as a matter of policy” (presumably by obtaining a seat on an “policy” investee company’s board).

This resolution was wrongly taken by management as authorising it to sell Orogen shares without reference to the board to approve the sale.

The following sales occurred in 1997: See table 1 below.

image a

Source : NPF accounting records/ Wilson HTM & Merrill Lynch statements (Exhibits OR11 OR13 ).

These sales did not have NPF board approval and were improper breaches of management’s duty to the board.


(a) MANAGEMENT (especially Mr Kaul and Mr Wright) directed Wilson HTM to sell 10 parcels of shares in June 1997, without the prior approval of the NPF board;
(b) MANAGEMENT, specifically Mr Kaul and Mr Wright, did not subsequently explicitly inform the board about these unauthorised “on market” share sales and the board’s ratification was not obtained. After September 1997 when the Orogen share price began to fall sharply from $A3.9 to bottom at $A1.6 in March 1999, NPF management failed to provide expert evaluation of this investment and the trustees failed to seek it. This was a breach of duty by both management and the Trustees.

Purchases in 1997

Throughout 1997, NPF management continued to acquire Orogen shares and did so without seeking the requisite NPF Board approval.

The purchases were as follows:- See table 2 below.

image b

Sources: NPF accounting records/ Wilson HTM statements/ Merrill Lynch Statement — (Exhibits OR11-OR13).

There were references to some of these purchases in the equity portfolio schedules filed with the board papers but the references were out of date and inaccurate. They were sufficient, however, to have put the trustees on notice that unauthorised purchases were occurring. Failure by the trustees to observe these transactions and to reprimand management was a breach of fiduciary duty by all trustees holding office at the time. Clearly, the conduct of management, namely Mr Wright and Mr Kaul, was improper and they were in breach of their duties to the NPF Board.


(a) NPF management directed 12 “on-market” purchases totalling 1,087,973 shares for a total cost of $A3,917,879, without the requisite prior board approval;
(b) The purchases were later reported on the monthly equity schedules tabled at subsequent board meetings but the information was sometimes inaccurate and well out of time. The attention of the Trustees was not drawn explicitly to the equity schedules;
(c) MANAGEMENT, particularly Mr Wright and Mr Kaul, were in breach, respectively, of their duty and fiduciary duty to NPF members by this failure;
(d) THE trustees were in breach of their fiduciary duty in not monitoring management’s unauthorised activities and bringing them under control;
(e) THERE was a breach of Section 61 of the PF(M) Act with regard to the shares purchased on the October 2, 1997, as Ministerial approval was not sought or given.


National Provident Fund Final Report [Part 43]

October 5, 2015 1 comment

Below we continue the re-publication of the serialized edited version of the National Provident Fund Commission of Inquiry Final Report that first appeared in the Post Courier newspaper in 2002/3.

The Inquiry findings provide an unprecedented insight into the methods that are still being used today by the mobocracy that is routinely plundering our government finances. The inquiry uncovered for the first time how the Waigani mafia organise complex frauds using mate-networks, shelf companies, proxy shareholders, and a willing fraternity of lawyers, accountants, bankers and other expert professionals.

The Commission findings also reveal the one grand truth at the centre of all the corruption in Papua New Guinea: it is pure theft, no different from an ordinary bank robbery. However, if you steal the money by setting up, for instance, a bogus land transaction, the crude nature of the criminal enterprise is disguised to all but forensic experts, making it seem the perfect crime! 

NPF Final Report

This is the 43rd extract from the National Provident Fund (now known as NASFUND) Commission of Inquiry report. The inquiry was conducted by retired justice Tos Barnett and investigated widespread misuse of member funds. The report recommended action be taken against several high-profile leaders, including former NPF chairman Jimmy Maladina. The report was tabled in Parliament on November 20 by Prime Minister Sir Michael Somare.

Executive Summary Schedule 4F Continued 

Table of Niugini Mining share purchases in 1996 

npf 43 a

Source: NPF accounting records/Wilson HTM records (Exhibit NM2-NM4).

The purchases in January to February were authorised by the board by circular resolutions. No advice was given to the trustees other than that Mr Wright believed it was a good idea and that some Oil Search shares should be sold to finance Niugini Mining purchases as the latter had more significant upside than Oil Search.

The board endeavoured to inject some control over the widespread use of circular resolutions by resolving on February 23, 1996:

“. . . that management seek formal approval from the board for all circular resolutions obtained in between board meetings by tabling those resolutions at the first board meeting after the resolution has been taken.” (Exhibit NM58)


(a) THE NPF management, (particularly Mr Kaul and Mr Wright) did not present to the board any independent advice in respect of the investment in Niugini Mining;
(b) MR Kaul and Mr Wright failed to properly discharge their duties by not making timely disclosure to the Board of Trustees of the unauthorised purchases;
(c) THE NPF management failed to properly discharge their duties by purchasing shares without the board’s approval
(d) THE Board of Trustees failed to reprimand or question management over the unauthorised share transactions; and
(e) NPF management acted in excess of their delegated authority by purchasing shares without express board approval.

Sale Of Shares In 1996

In 1996, NPF also sold shares as per the following table. This was authorised by management without board approval.

Table of Niugini Mining share sales – 1996 

npf 43 b

Source: NPF accounting records/Wilson HTM records (CD 748), Exhibits NM2-NM4.


(a) MANAGEMENT sold 370,000 shares in 1996 for $A1,292,974 without prior board discussion or approval and the sale was not subsequently ratified by a formal board resolution. No loss was incurred by NPF;
(b) SPECIFIC Ministerial approval was not required as the sales were within the general K1 million approval previously granted by Minister Haiveta;
(c) ROBERT Kaul and Noel Wright jointly bear responsibility for these unauthorised sales. It was a breach of Mr Kaul’s fiduciary duty to the contributors and a breach of Mr Wright’s duty to NPF. No loss to NPF has been established.

Sale Of Shares – 1997 

In January and February 1997, NPF management arranged the sale of 1,300,000 for $A4,090,158 without the approval of the NPF board. In doing this, Mr Wright was in breach of his duty to the NPF board and Mr Kaul who, as managing director, was also a trustee, was in breach of his fiduciary duty to the members.

Management never disclosed these sales to the trustees explicitly but they were shown in the schedule of investments placed before the board in May, 1997. This did not provoke discussion at the May board meeting and the trustees once again failed to reprimand management for exceeding their authority.


(a) NPF management sold 1,300,000 shares in 1997 for $A4,090,158.00 (K4,377,541) without prior board discussion or approval and the sales were not subsequently ratified by the board;
(b) THE sale on February 21, 1997, of $A2,013,954 (K2,169,040) was more than K1 million and therefore required ministerial approval. As ministerial approval was not obtained there was a breach of Section 61 of the PF(M) Act;
(c) MR Kaul and Mr Wright were responsible and Mr Kaul breached his fiduciary duty to the contributors and Mr Wright breached his duty to NPF. No loss to the NPF has been established.

Sale Of Shares – 1998

Once again, management purchased 32,300 shares on January 12, 1998, and sold them again on January 29, 1998, through Wilson HTM without the knowledge or authority of the board. A profit of $A13,890 was made. It was yet another breach of duty by Mr Wright and possibly Mr Kaul, which may have had connections with Mr Wright’s trading in Lihir options.


This risky, unwise investment returned a small profit and was sold off voluntarily, not part of the 1999 forced sale. Both management and the trustees displayed the same failure to perform their common law and fiduciary duties as demonstrated throughout the period under review.

Executive Summary Schedule 4G 


Oil Search Ltd (OSL) was PNG’s largest oil and gas explorer and producer in December 1995 and the fourth largest oil and gas exploration company registered on the Australian Stock Exchange (ASX).

NPF had bought 4,954,000 shares in OSL in 1994 and was still holding them at the beginning of the period under review. During 1996 NPF sold off all its OSL shares for a realised profit of $A3,571,011.

In 1998 NPF acquired 222,000 shares and disposed of them in January 1999 for a loss. See table 6.

npf 43 d

Source: NPF accounting records / Wilson HTM records (Commission Documents 748, 525) Exhibits OS4 and OS5.

The total realised profit on OSL at December 31, 1999, was $A3,034,637.

The stated reason put forward by Mr Wright for selling off OSL shares in 1996 was because he thought the share price would decline and he recommended that the proceeds of the sale should be used to purchase shares in Niugini Mining Ltd (NML) which he said had more “upside” than OSL.

In fact, the price of OSL rose significantly after NPF sold out and the price of NML fell significantly after NPF bought in.

Oil Search Share Price 

npf 43 e

Source: ASX (Commission Document 752)

Sale Of OSL In 1996 

During the time NPF held the OSL shares, they showed an unrealised gain of $A2,724,700 at December 31, 1995. Management never reported to the board on, or analysed, the investment.

Attractiveness Of NML – The Lihir Factor 

Mr Wright and Mr Kaul, with the enthusiastic support of Mr Copland and Minister Haiveta, felt NML was selling at a “one off” low price and acquiring NML shares would give NPF an interest in Lihir Gold, as NML held 17.15 per cent of Lihir. A management paper, signed by Mr Wright and Mr Kaul, was circulated to NPF trustees on January 11, 1996, advocating the disposal of 954,000 OSL shares, in three tranches, at $A1.20 and acquiring 420,000 NML shares at $A2.70.

The NPF board approved this proposal by way of circular resolution, despite receiving no investment advice or report.

NPF sold its OSL shares on January 11 and 12, at $A1.20 and $A1.23 respectively, after which the price rose (paragraph 4.3)

Further Sales

At the 99th NPF board meeting on February 23, 1996, Mr Kaul sought approval to sell a further two million OSL shares. The board resolved to approve the sale. Mr Wright and Mr Kaul did not advise the board they had already sold 1,000,000 OSL shares, without the board’s knowledge or approval. Another 100,000 shares were sold (on their prior direction) on the day of the meeting. This was a breach of duty by Mr Kaul and Mr Wright and amounted to improper conduct.

Management then proceeded to sell off the remaining two million OSL shares without further reference to the board. When the board was informed of this at the June 1996 meeting, there was no criticism of management for these further breaches of duty.

The sale of NPF’s OSL shares in 1996 was as follows:

npf 43 c

Source : NP accounting records/ Wilson HTM records (Commission Documents 748, 525), tendered document OS4 and OS5.


The sales of 1,100,000 shares, prior to the February 23, 1996, NPF Board resolution, were made without the Board of Trustees’ approval.

Lack of Ministerial Approval

Although the Minister had purported to grant a standing approval in January 1996, for NPF to acquire and dispose of shares in batches up to a limit of K1 million without needing to apply to him, that approval was invalid as it had been signed and gazetted using the wrong sections of the PF(M) Act.


Peter O’Steal Strikes Again! – allegations USD$1.2 billion loan is corrupt

March 10, 2014 16 comments

Dr Patrick Onguglo

The Prime Minister Peter O’Neill (‘aka O’Steal) has personally and unilaterally directed that the State of PNG borrow US$1.2 Billion Dollars through international financiers syndicated by the Swiss UBS Bank, to buy 10% of Oil Search Limited (OSL) shares. It is believed this transaction is motivated by personal gain. Therefore, this loan is believed to be for a corrupt outcome. This corruption is perpetrated by UBS and other international banks lending the money.

PNG does not need the loan. It is Peter O’Neill who needs the loan for his own corrupt gain. He is using the country’s assets to obtain a personal benefit. This must be made very clear to the international lenders. On this basis no future PNG Government will be liable to repay the funds, lent for an illegal purpose.

As of this article the international lenders will be deemed to be aware of the allegations I make here.( I invite the Prime Minister to contradict me if he can).

This is not an ordinary share purchase (investment) made by the Prime Minister on behalf of the people of PNG. What I am about to reveal is only known to a few key people in government circles.

In 2013 Total, the French Petroleum conglomerate entered into a deal with InterOil Limited wherein it purchased 60% stock in InterOil with the intention to develop the Gulf/Elk-Antelope LNG Project. Total bench marked the price of the InterOil shares against the known oil and gas reserves of InterOil’s Gulf/Elk LNG reserves, and international price indicators.

InterOil was started by two men in this country, Phil Mulacek and Gayland Baker in early 1990s. These two men, one a Texan and the other from California walked into Port Moresby government offices with empty brief cases promising to build an Oil Refinery in PNG out of one abandoned by Chevron in Alaska. While Curtain Brothers offered the Motukea refinery, these two men with very slick marketing skills, and Gayland Baker’s position as a director of conservative Fuller Christian Seminary, gained the upper hand.

The rest is history, of the way they manipulated government decision making processes, public announcements, to gain every benefit, favour, approval, license and a free lift up in every other step of that company’s development.

InterOil today is testimony to how Phil Mulacek has carefully and deliberately manipulated the goodness of the people of PNG and their government, how he has ruthlessly and unscrupulously exploited the weaknesses of key leaders of PNG, to build a personal fortune worth several hundred Million Dollars for himself and his extended family. Mulacek has been ably assisted by Christian Vincent, the Frenchman, his brother-in-law who acts as Phil’s main go-to man who has also gained in the hundreds of Millions.

In a small town things can get a bit incestuous, as Christian Vincent’s long term girlfriend in PNG happens to be the Fijian-Indian Lady with the short skirt who is the CEO for Peter O’Neill insurance company. Peter O’Neill is no stranger to Vincent and Mulacek having had many private dinners and meetings over the years when Mr O’Neill was a Minister in the Somare Cabinet.

Having sold 60% of InterOil to the French Company for several hundred Million dollars, Mulacek and co have been holding out the balance of the shares of 40% for a price that is almost triple what the French have paid for per share previously. The French having pre-emptive rights could not pay the price that the Mulacek camp has been asking for the balance of the shares. Meanwhile the Gulf-Elk LNG Project is not going anywhere fast.

The Mulacek camp have been trying to play Total against Exxon and Oil Search Ltd, who both also expressed interest in a piece of the action. Mulacek had hoped Total would pay the price to own the whole lot or Exxon would pay a premium to participate. No one took the bait. Over the years people have become tired and weary of Mulacek and his antics, always trying to profiteer and gain unreasonably, when he came to PNG with nothing. The InterOil project could have been fully financial 5 years ago had Mulacek not been greedy and held out.

This game has developed into a stalemate with Total holding majority stock and cant fund the project until it took the rest of the stock. It required a game breaker.

This is where the creative genius of Phil Mulacek came to the fore once again, and perhaps for the last time against the people of PNG. He approached Peter O’Neill through the lady with the short skirt for a private meeting. In that meeting it was laid out to ONeill that someone should assist Oil Search Limited (who has expressed interest ) to buy the balance of the 40% shares in Interoil for the exorbitant price that even Total would not pay. That Oil Search Limited had already been sounded out on this, and provided someone funded OilSearch Limited for the price of the Interoil Shares they would do the deal to further fortify them against any corporate raid. The State of PNG taking the shares would surely be a poison pill for the Dubai based Arabs seeking to do a raid on OilSearch Limited. The aggregate agreed price for 40% InterOil shares and OilSearch 10% shares was in the vicinity of USD1.0 Billion with enough fat to go around.

What was put to O’Neill in that meeting was that if he could get the Government of PNG to borrow USD$1.2 Billion from international commercial lenders, and buy 10% of Oilsearch Limited shares, Oilsearch Limited would use the proceeds definitely to buy the 40% shares from Interoil at its ridiculous asking price, AND THERE WOULD BE A VERY TIDY KICK BACK OF USD$100 MILLION FROM MULACEK & CO TO ONEILL for making this happen.

This was the game breaker. O’Neill became the game breaker. He became Peter O’Steal.

Having shook hands on the deal in last quarter of 2013, Phil Mulacek has been working feverishly with Peter Botten of Oil Search Limited, to get international lenders to lend to the State this huge sum of money, while Peter O’Neill has been carefully moving the right people into right places to take the decisions for him, and to cover his arse in the State agencies. The last act was to move the Minister for Petroleum William Duma aside and put his own man Duban in place to approve the deal. O’Neill knew Duma would see through the deal as unfair, unreasonable and corrupt and not approve it.

Last week Peter O’Neill has had lawyers and Financiers and bankers camping all over town feverishly working to finalize the deal. The only Minister working closely with O’Neill to close the deal is Ben Micah, who will support O’Neill because he needs ONeill to turn a blind eye to his own stealing.

Most of the Members of Parliament in the Government side do not know about this very juicy and lucrative deal that is going down just this week.

In fact most of the Cabinet Ministers do not even know. The Opposition does not have the manpower or the resources to keep up with Peter O’Steall’s very active life of carrying on private business deals while pretending to be Prime Minister of Papua New Guinea. Only a few people close to him only know some of the deals, but not all.

This Prime Minister has made more money using his position as Prime Minister of this country than any other leader in the history of this country, and that folks, is the understatement of the Century. Nothing over K10 Million passes the Tenders Board, for example, without the Prime Minister getting a look in first. His fingers are so sticky that it is now common knowledge among all his Coalition Party colleagues that this man is not good for PNG.

Papua New Guineans need to ask, and ascertain very clearly that:

1. The State does not need the 10% of OilSearch Limited Shares. Oilsearch Limited is a public company. It can bloody well raise its own money and buy the shares. When Peter Botten was first approached to buy the Interoil shares he baulked at the sale price as he knew what Total paid. Interoil was asking far too much. When he was again approached with State Offer, he realized it would be a poison pill to have the State to hold substantial shares in OilSearch, so he happily agreed. Oilsearch quickly overpriced its batch of 10% shares and was also gaining from the sale of the shares to the State. Everybody gains from the State.

2. The Deal and the Loan is not in the best commercial or financial interests of PNG and its economy. The Country has already pledged its assets, including the previous Oilsearch Shares (18%), to the Dubai based financiers of our LNG interests. Why borrow more to get into debt with Swiss Banks this time and park the interest encumbered (shares) in the same commercial entity (Oilsearch) that the Dubai lenders already have priority in call over? Putting all our LNG eggs (revenue stream) in one basket is not a wise move.

3. Why didn’t Peter O’Neill opt to use the money to allow the State to exercise its option to acquire 22.5% of the Gulf Elk LNG Project?

4. Why is Peter O’Neill helping to protect OilSearch which is a public company- unless there is a catch?

5. Has Peter O’Neill relied on a fair and commercial valuation of the shares of Oil Search Limited to justify the price, despite the prevailing share price? Where is the professional valuation?

6. Why is Peter O’Neill borrowing USD1.2 Billion to fund shares when the money can be best spent on health and education and infrastructure?

7. How can the PNG economy which is already burdened by debt and currently underpinned by 2 consecutive years of massive budget deficits afford to shoulder this huge debt burden? Why has Peter O’Neill further mortgaged our future?

8. Why has Peter O’Neill further exposed the PNG economy to the LNG Project. All the hopes of the politicians are on the LNG Project. This is a huge and monumental gamble; particularly because the State has failed to honour its agreements with the Landowners, and the State ( Arthur Somare) has failed to explain what happened to the 3% of the State’s 22.5% in the PNG LNG Project. What happened to the 3%? Mr ONeill was Finance Minister. He knows what happened to the 3% in the Dubai deal. Perhaps he can explain? The Landowners will not allow leaders to trick and mislead them anymore. They are wiser by the day.

9. Why didn’t Peter O’Neill allow the USD1.2 Billion to be borrowed by Kumul Holdings or National Petroleum Company or even the IPBC, for it to buy outright the shares of Interoil? Why gift Oil Search Limited this money at the expense of the people of PNG? Why does OilSearch have to own the InterOil Shares (thereby the Gulf-ELK LNG Project) when the State could easily acquire it and own it- and not for that price!

10. What is the underlying rationale and underlying value in the exorbitant price (of the loan) of the InterOil Shares? Who has done independent industry benchmarked valuations based on which Peter O’Neill has agreed with Mulacek to do this deal?

11. What is the nature of the Mulacek-O’Neill kickback and how was it designed to be delivered?

12. Is it true this major investment decision worth approximately K4 Billion was made by one man, Peter O’Neill, without Cabinet or Parliamentary approval or debate? If so then it is clearly an abuse of the office of the PM, and he should be referred to the Ombudsman for investigation.

There are many things absolutely and seriously wrong with this investment decision. The Prime Minister has no power to unilaterally commit this country like he has done with Manus Asylum seekers etc. It has become abuse of power. He has become dictatorial.

O’Neill is currently getting government agencies and Departments to approve this transaction for which even the Finance & Treasury officials and the Bank of PNG have not done any formal prior appraisal of this loan. He is trying to rail road the proper government agencies to approve this transaction, when they haven’t even done any proper evaluation of this loan against the country’s other commitments and debt levels.

I call on Ministers of Cabinet, Government Coalition Partners and Leaders to demand full briefing on this transaction, and all documentation on this transaction be tabled in Cabinet and Parliament for public scrutiny. I call on the Cabinet Ministers and coalition partners to block this stupid loan.

I call on Senior Ministers to feel sorry for this country and its people, to take their oaths to serve the people seriously. I call on responsible Ministers to stand firm and not endorse this deal even it means their sacking. It is time for principled leaders to stand up to this PM and his greed.

Already the PM has set it all up so that he does not sign any documents himself. He is using quiet pressure through other people including, once again Ministers Marabe, Polye, Micah and Duban to sign and endorse this deal that Parliament and Cabinet did not approve. Even if Cabinet approved it, it seems they would have been mis-informed. When the shit hits the fan, the PM will naturally go after these Ministers and once again, blame them, as he did with the Paraka deal.

This is a stupid deal, designed to benefit a few greedy and selfish people. IT MUST BE STOPPED!
The Prime Minister needs to declare his interest in this matter publicly and resign. He has taken far too much from this country and the small people. He has to learn that enough is enough!