Hevehe Petroleum Ltd to acquire 50 percent interest in Pasca A Project from Twinza PNG
The Independent Consumer and Competition Commission (“ICCC”) has given Clearance to Hevehe Petroleum Limited (“Hevehe”) to proceed with its proposal to acquire a 50 percent (50%) interest in the Pasca A Project from Twinza Oil (PNG) Limited (“Twinza PNG”).
“Based on the ICCC assessment and consideration of Hevehe’s Clearance Application as required under Section 81 of the ICCC Act, the proposed acquisition of a 50% interest in Pasca A Project by Hevehe would not have, or would not be likely to have, the effect of substantially lessening competition in any market (s) in PNG,” ICCC Commissioner and Chief Executive Officer, Mr. Paulus Ain said.
“The proposed acquisition would be a mere investment into the Pasca A Project by Hevehe despite its proposed equal ownership with Twinza PNG; and Twinza PNG would maintain its operatorship post-acquisition. The acquisition would not give Hevehe or MRDC any control in any markets in the oil and gas exploration, extraction, and production in PNG.”
Therefore, the level of competition in any markets in the oil and gas sector in PNG would not be significantly affected by the proposed acquisition.
“Additionally, the ICCC understands from available information that the exploration, development, and production of hydrocarbons is a capital-intensive exercise that requires expensive equipment and high skilled labour, advanced technical and technological capabilities, and compliance with environmental regulations, all of which involves high sunk costs and creates high barriers to entry,” Mr. Ain said.
“The ICCC, however, considers this to be a common nature of petroleum companies engaging in joint venture partnerships to minimize cost and achieve commercial productivity, thereby having no intention of impeding competition in any market(s) in PNG.”
Mr. Ain further added that in the long term, when the Pasca A Project begins production, it is highly likely to increase foreign exchange reserves due to the potential exports of LPG, LNG, and condensate from the project. This, in turn, would benefit domestic businesses and increase revenue for PNG.
The ICCC, therefore, has given clearance for the proposed acquisition to proceed.