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Probe clears Horizon in PNG deal

Horizon Oil says an investigation has cleared it of breaching Australian laws in a K33 million (A$15 m) payment made nine years ago to a PNG company for a 10 percent stake in Petroleum Retention License (PRL) 21.

In a statement on Tuesday, June 10th, the company said the investigation by Herbert Smith and Freehills (HSF) and Deloitte, with oversight by an Independent Board Committee, confirmed that no Australian foreign bribery law had been breached.

The investigation was conducted following several articles published by the Australian Financial Review (AFR) in February this year claiming the deal between Horizon and Elevala Energy nine years ago raised concerns of ‘illicit payments’ and ‘bribes.’

In 2011 Horizon Oil paid K33 million to Elevala Energy, a privately-owned PNG company, for its 10 percent stake in PRL 21 in the Western Province.

The articles claimed that sole Director of Elevala Energy, Simon Ketan, had close connections with government officials, including then Minister for Petroleum, William Duma.

Duma, who is currently the Minister for Trade and Commerce in the Marape-Steven led Government, was also questioned in his alleged role in the commercial transaction.

Horizon says the structure of the transaction and the quantum of the purchase price was consistent with market practice and comparable to other relevant transactions at the same time.

Further, no payments were made in excess of the agreed purchase price and Horizon has no knowledge of any subsequent transfers or transactions made by counterparties after the purchase price was paid.

Horizon Chairman, Mike Harding, says the investigation by two highly reputable firms has now concluded.

“The disclosure and publication of company information without seeking to fully understand the facts around the transaction occurring more than eight years ago has caused significant loss to shareholders and cost to the Company,” said Harding.

“The investigation provides the necessary closure in relation to these allegations and after a challenging few months, we are now focused on the process of regaining the confidence of our stakeholders, so that we can move forward with confidence and deliver on our corporate growth objectives.”

Meanwhile, Minister Duma told this newsroom he has always maintained that he followed the process set out in the Oil & Gas Act and that he did not break any laws.

“I have always maintained that the transaction between Horizon and Elevala (Energy) was a private commercial matter involving their own money,” said Duma.

“The independent review carried out by the two preeminent Australian law and accounting firms confirms what I have been saying all along, and that is that there was nothing corrupt or improper about firstly, my decision as Minister and secondly, the transaction between these two private companies.”

Minister Duma said his defamation proceedings in the Federal Court of Australia against the AFR is still on foot.

Source: http://www.looppng.com/business/probe-clears-horizon-png-deal-92757

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