Australia In Talks to Help Papua New Guinea Buy $1.1 Billion PNG LNG Stake
(Reuters) — Papua New Guinea's state-owned Kumul Petroleum is in talks with Australia's export credit agency to help fund a $1.1-billion acquisition of a 5% stake in the PNG LNG project from Santos Ltd., the PNG company's head said on Tuesday.
Kumul Petroleum Managing Director Wapu Sonk said backing from Export Finance Australia (EFA) was Canberra's way of aiding its northern neighbor.
"It's to help us help the country," Sonk told Reuters on the sidelines of a conference in Sydney.
"We're also working with other financing partners to complement the EFA financing," he said, adding that there was interest from a wide range of lenders.
EFA declined to comment.
Santos announced in September that Kumul had made a binding offer to buy a 5% stake in PNG LNG from the company for $1.1 billion, subject to the other joint venture partners, which include Exxon Mobil Corp. and Japan's JX Holdings Inc, waiving their pre-emptive rights to match the offer.
The Papua New Guinea government would eventually like to buy a total stake of 10% in PNG LNG from Santos, Petroleum Minister Kerenga Kua said on Tuesday.
"Santos wants to give 10% up. That's no question on their part. But who gets it is the question," Kua told Reuters in an interview on the sidelines of the conference.
"State wants it, but our challenge is how do we finance 10% and not just 5%," he said.
A Santos spokesperson declined to comment and referred to what the company said in September on the sale.
"We feel that if we get 10% we can secure the social licensing that's needed to give security to all of us. We want to create an environment where the society is content," Kua said.
Sonk said Kumul aimed to complete its acquisition of the 5% stake by June or July.He said acquiring a further 5% is currently off the table but Kumul had the option to buy another 5% stake if Santos were to put it up for sale.
Sonk said the joint venture partners in PNG LNG had indicated they would waive their pre-emptive rights to match its offer for the stake.
"So far, the JV's are indicating they will not exercise their rights," Sonk said, adding that the next hurdle was financing, which the company aims to line up by April.
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