1 Dec 2014

PNG leader says vested interests behind loan allegations

3:16 pm on 1 December 2014

Papua New Guinea's Prime Minister says he is concerned that officials and politicians with vested interests continue to try and undermine his government.

Peter O'Neill was speaking about his referral to a leadership tribunal over allegations about a state loan of 1.1 billion US dollars from the Swiss bank UBS.

Mr O'Neill denies allegations that he didn't follow the normal administrative process for securing the loan.

He adds the loan was imperative in order to buy shares in Oil Search, after the state was unable to meet the price that the International Petroleum Investment Company was demanding for the buy-back of shares exchanged in 2009 in order for PNG to get equity in the LNG Project.

Papua New Guinea Prime Minister Peter O'Neill.

Papua New Guinea Prime Minister Peter O'Neill. Photo: Supplied

"It has taken months and months of negotiations with the Arabs, months and months of negotiations with Oil Search, to try and secure our interest in that company. All senior government officials were participants in the advice to myself and to cabinet, endorsed this particular transaction and cabinet formalised it."

Peter O'Neill says controversy over the loan has been created by his political opponents.