latest AFR update. If you go to the blog link in the story you will also find allegations against former gas and petroleum minister Pok. You might also consider this in relation to the current dispute with Stanley and why this previous matter has been possibly raised, food for thought, what’s that old saying fool me once ............
PNG department silenced over Horizon licence
Departmental staff who spoke out against a controversial petroleum licence issued to Horizon Oil in Papua New Guinea were threatened with suspension or demotion, according to an employee at the time.
The former staffer, who asked not to be named, said there were many "odd" aspects to how the licence was issued in 2011 by the Department of Petroleum and Energy (DPE) and its then minister, William Duma.
Simon Ketan is the key player in the corruption allegations around Horizon Oil. "Almost all those in the DPE who know of these facts have been sanctioned ... by demotion, suspension, or other efforts to cause them to desist into any further enquiry [sic] of these matters," the former staffer said in an email at the time.
The licence known as PRL21 is now the subject of a corruption investigation by the current PNG Minister for Petroleum and Energy, Kerenga Kua, and an independent board investigation at the ASX-listed Horizon.
A cache of documents obtained by The Australian Financial Review is being examined by the Australian Federal Police, which says it takes matters of foreign bribery "very seriously".
The documents show Horizon repeatedly ignored corruption warnings in buying out a politically connected shell company, Elevala Energy, for $US10.3 million in May 2011.On Wednesday,
Horizon suspended its chief executive Michael Sheridan, who was company secretary and chief financial officer during the buyout.
The former departmental staffer noted Elevala was granted a 10 per cent stake in the licence even though it was not a party to the earlier licence and did not apply for it when Mr Duma opened a new tender process.
Sitting PNG minister William Duma is under investigation by his former department.
The person noted the licence was issued as part of an out of court settlement between Horizon and Mr Duma.
This followed Mr Duma revoking Horizon's previous licence over the same area, which was known as PRL5.
Personal, business links revealed Documents that emerged on Wednesday revealed the sole director and shareholder of Elevala, Simon Ketan, had close personal and business links to Mr Duma.
The documents, published by investigative blog site PNGi, show Mr Ketan acted as Mr Duma's personal lawyer during a Supreme Court dispute in 2007, four years before the licence was issued.
Despite this documented link, which would typically raise concerns in a country like PNG, Horizon's lawyers at top-tier firm Ashurst did not raise concerns about Elevala's involvement.Mr Duma and Mr Ketan also attended law school together, worked together at the Port Moresby office of Blake Dawson (now Ashurst) and are part of the same "wantok network” (a social grouping).
Mr Duma, who is now PNG's Minister for Commerce and Industry, has denied any wrongdoing and said suggestions he acted improperly "amounts to political witch-hunting with malicious intent to make me look bad".
“That I may know Mr Ketan does not necessarily mean that processes set out in the Oil and Gas Act were breached just to grant favours for Mr Ketan,” he said via email.
Bribing a foreign public official carries a maximum jail sentence of 10 years for individuals in Australia and fines up to $18 million for a company, although it is notoriously difficult to prosecute.
The AFP has spent the past two years investigating a $US10.5 million payment made by mining giant Rio Tinto to a middleman in Guinea, after damaging emails about the deal leaked online.
Horizon has producing oil and gas fields in China and New Zealand, which helped the company generate an underlying profit of $US37.3 million ($55.5 million) last financial year.
Its shares have fallen 30 per cent this week to close on Thursday at 8.5
HZN Price at posting:
8.1¢ Sentiment: None Disclosure: Held
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