InterOil shareholders to vote on revised takeover bid by ExxonMobil in February, government debt rises in September quarter, Oil Search and Kumul Energy to evaluate proposed power projects. Your weekly digest of the latest business news.

InterOil shareholders are expected to vote on 14 February on revised terms of the takeover bid by ExxonMobil. The two have agreed to extend the takeover deadline until March. The amended deal lifts the maximum price payable for InterOil by about 10 per cent to US$78.94 per share. The offer is structured as a US$45 per share flat cash payment, plus an extra US$7.07 per share for each trillion cubic feet (tcf) of gas certified as being held in Elk-Antelope. The break fee payable by InterOil has been increased to US$100 million from US$67 million.

*** 

Loi Bakani, Governor of the Bank of PNG

The Bank of PNG says government debt was K19.4 billion in the September Quarter of 2016,  a rise of K182.5 million from the previous quarter, the Post Courier reports. Governor Loi Bakani said preliminary estimates of the fiscal operations of the National Government over the nine months to September 2016 show an overall deficit of K1.3 billion, compared to a deficit of K1.9 billion in the corresponding period of 2015, representing 2.0 per cent of nominal Gross Domestic Product (GDP).

*** 

Governor Loi Bakani said the Government’s revenue and expenditure were lower than budgeted for last year, according to The National. He attributed the decline in revenue to ‘low commodity prices and low tax collections’. He added: ‘The planned external financing through a debut sovereign bond of US$500 million (K1.56 billion) did not eventuate while only the first tranche (of) US$200 million (K625 million)) of the Credit Suisse loan was obtained, with the balance of US$300 million (K937.5 million) expected in January 2017.’

Bakani has also called on exporters to use the low kina exchange rate to increase production and exports to raise needed foreign exchange. ‘Given the substantial depreciation of the kina exchange rate of around 37 percent since April 2012 to last December, the bank does not believe any further large depreciation of the kina would clear the foreign exchange market, but rather increase inflationary pressures.’

***

Oil Search Power Holdings and Kumul Energy will jointly fund the evaluation of power projects, according to the Post Courier. They will evaluate a domestic LNG concept which may see the supply of already discovered but undeveloped local gas.

***

Bermuda-based Asia Broadcast Satellites has reportedly been granted three licences to provide ICT services in PNG. NICTA CEO  Charles Punaha says ABS is the first international satellite operator to incorporate in PNG, and will be known as ABS Global Satellite Limited.

***

Momote Airport. Credit: EMTV

Momote Airport in Manus will be upgraded to an international airport at the cost of K100 million, according to EMTV. Contractor China Harbour Engineering will reportedly start the project this month and it is expected to be completed by June 2018.

***

Canadian-based Era Resources says a revised upwards estimate of the potential for its Yandera copper/gold project in Madang to 728 million tonnes, justifies a feasibility study. This will be carried out by China Nonferrous Metal Industry’s Foreign Engineering and Construction Co.

***

The Government and the Paga Hill Development Company (PHDC) have reportedly signed a memorandum of understanding for the development of the 250-room K3 billion waterfront integrated resort and residential project in Port Moresby. Construction is scheduled to begin early this year and is due for completion for the APEC summit in 2018. PHDC CEO, Gudmundur Fridriksson, reportedly said he is seeking import duty exemptions on building materials for the project.

***

Public Enterprise Minister William Duma says the Government will be receptive to a submission by Air Niugini for a review of the proposed increase in the departure tax from K30 to K114, according to The National. Air Niugini board chairman Sir Frederick Reiher has described the decision as ‘counterproductive’.

***

The Chief Secretary to Government, Isaac Lupari, reportedly says estimated cost overruns in the public service payroll cost K300 million annually. Explaining the revised Public Finance Management Act Lupari said the biggest challenge in the public service is introducing discipline in financial management.

***

China’s civil engineering company, Covec (PNG) has reportedly been ordered to pay more K50 million to Chimbu landowner, Peter Kama and his family for illegally extracting road building materials from their land in 2006.

***

And finally, traffic flow has resumed along the section of the Highlands Highway in Chimbu which had been closed for six days because of a landslide. Landowners reportedly blocked the move, wanting compensation for landslide damage to their coffee plantations. They weren’t satisfied with the K500,000 payment from the Works Department, and relented when Mapai Transport Managing Director Jacob Luke promised a further K100,000.