PNG’s new Petroleum Minister, officials in Abu Dhabi to negotiate Oil Search bond buyback, and the cost of Manus Detention Centre detailed. Your weekly digest of the latest business news.

The Papua New Guinea government has sent a negotiating team to Abu Dhabi to insist that the state-owned International Petroleum Investment Company there should sell it back a strategic 14.6 per cent stake in Oil Search. In 2009, the government raised US$1.68 billion (K3.84 billion) by selling IPIC a bond against its Oil Search stake, which matures this year. O’Neill has told parliament the Bank of Papua New Guinea has ‘now secured’ funds for the buyback and ‘It is now up to the Arabs to offload the shares’.

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PNG has a new Petroleum and Energy Minister, following a cabinet reshuffle. Nixon Duban, a member of Mr O’Neill’s People’s National Congress party, replaces long-serving William Duma. See our People Moves section for other ministerial changes.

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Transfield Services has told the Australian Stock Exchange its contract to run the Manus island and Nauru offshore processing centres is worth A$1.22 billion (K2.83 billion). Transfield MD Graeme Hunt says the contract will run for 20 months from 1 March. Medical and counselling services will remain the responsibility of International Health and Medical Services. Transfield will sub-contract security services to Wilson Security sat both locations.

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Treasury Minister Don Polye has stated that all proceeds from the sale of the PNG LNG Project will go directly into the Sovereign Wealth Fund. Polye says the government will consider investing some of the funds in rich countries like Singapore and Malaysia. He indicated the SWF legislation would be finalised at the May sitting of parliament.

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A survey by the Institute of National Affairs has found steady improvement in the business environment but crime and corruption are still impediments. The study of 130 firms is the third of a series of five-yearly surveys. Asian Development Bank economist Paul Holden says greater political stability has helped, along with government steps to improve budget stabilisation and the reduction of inflation.

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A law allowing dual PNG citizenship has been passed by parliament, 90-0.  Attorney-General Kerenga Kua said, however, the option will apply only to countries that recognise PNG citizenship.

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Prime Minister Peter O’Neill says tax exemptions for local businesses is one way to encourage small-to-medium enterprises (SMEs). Presenting a draft SME policy, O’Neill suggested that businesses with a turnover of less than K5 million could be exempt from paying taxes.

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Farmers in the Central Province are to get their own wholesale market to sell their products to retailers. The Fresh Produce Development Agency is spending K35 million developing a 75-hectare site at Eight Mile, relieving farmers of transport and storage problems.

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The National Housing Corporation will build 40,000 new homes in Port Moresby to address the massive housing problem in the capital. Managing Director John Dege says the government has secured two urban development leases, at Durand Farm outside Port Moresby  and at the back of the National Research Institute in Waigani, for development.

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Speculation is rife on Wall Street that oil and gas company InterOil is vulnerable to a takeover bid. Teck Resources, Canada’s largest metals and mining company, is apparently lining up a cash offer in the region of $85 a share, valuing InterOil upwards of US$4 billion (K10.3 billion). InterOil’s shares closed last week at US$54.

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Ok Tedi Mining Limited has welcomed the arrival of a second shipping vessel in Kiunga, Western Province. The MV Fly Prosperity is the second of four new vessels the company has ordered to carry copper concentrate.

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Investment in tourism is yielding dividends in the South Pacific, according to the ANZ Bank’s Pacific Quarterly, with receipts from both leisure and business visitors climbing hand-in-hand with investment. The ANZ notes tourism arrivals into the Pacific have topped 1.5 million visitors, with Fiji absorbing about 40% of those flows. The majority of arrivals still come from Australia but Chinese tourists are now the quickest growing source of visitor arrivals. The Bank says ‘we are just at the cusp of a multi-decade increase in tourism expenditures from China’.

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Meanwhile, the PNG Tourism Promotion Authority reports 13,045 visitors came to PNG in December 2013, compared to 12,837 in December, 2012. About half that number came from Australia.

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The bungalows of Nuli Sapi in Milne Bay have been rated in the top ten eco-stays for 2014 by travel publisher Lonely Planet’s authors and travel editors.

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The chairman of the Autonomous Bougainville Government’s member’s forum, John Ken, says landowners have all agreed to re-open Aropa airport so that business can recommence in the region. The Minister for State Enterprises Ben Micah says the Solomons’ Prime Minister will be invited to the opening ceremony, paving the way for Solomon Airlines to fly directly from Honiara.

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Air Niugini  has announced the re-introduction of its 40% airfare this year as part of the airline’s 40th anniversary.

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Ela Motors is  to release a purifying water system for hospitals, schools and rural villages. The price tag of K250,000 covers the equipment, setup set up costs and maintenance training. It can produce up to 8000 litres of drinking water per day, using a sand filtration method, and meets World Health Organisation standards.

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Crater Gold Mining has lodged a mining lease application with the Minerals Resources Authority at its high grade zone project at Crater Mountain, in the Eastern Highlands. Managing Director Greg Starr said ‘first year production of 10,000 high grade ounces is achievable’. He said local artisanal miners had mined an estimated 15,000 ounces between 2005 and 2012 ‘using rudimentary means’.

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Digicel is considering buying Telecom Cook Islands. The global telecommunications company is in talks with Telecom New Zealand about buying its 60% stake in Telecom Cook Islands, as well as the 40% shareholding held by the Cook Islands Government.