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IPIC Buys $1.1 billion Bond Issued by Papua New Guinea

ABU DHABI — International Petroleum Investment Company has completed the purchase of a five-year $1.1 billion exchangeable bond issued by the Government of Papua New Guinea.

Upon conversion of the bond, the company also known as IPIC will acquire Papua New Guinea’s entire 17.6 per cent equity stake in Oil Search Limited, becoming the largest shareholder in Oil Search.

This strategic investment will 
ensure IPIC’s participation in 
Liquid Natural Gas mega-project, 
operated by ExxonMobil Corporation, in which Oil Search has around a 30 per cent stake.

The LNG project will transform the nation’s economy and would be a major driver of the Asia Pacific energy market in the future, said a statement issued on late Wednesday.

IPIC’s managing director, 
Khadem Al Qubaisi, said that his company has executed this transaction, where a number of oil majors 
tried and failed.”This is only the second acquisition in which IPIC 
has used a convertible instrument, and we envisage wider use of such mechanisms in future IPIC investments,” he said.

Al Qubaisi hinted that this investment would be a platform for further Abu Dhabi investments in Asia Pacific nation.

The Papua New Guinea LNG 
Project is operated by Esso 
Highlands Limited, a subsidiary of ExxonMobil, on behalf of the joint-venture which include Oil Search, Santos, Nippon Oil, and Mineral Resources Development Company (MRDC) and Eda Oil.

The preliminary schedule indicates a final investment decision in late 2009 with a target of first LNG 
cargo in 2013-2014. Once fully constructed, the Project lifetime or production phase is expected to be around 30 years.

haseebhaider@khaleejtimes.com