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Papua New Guinea prime minister quits after weeks of turmoil


By Alison Bevege

SYDNEY (Reuters) - Papua New Guinea Prime Minister Peter O'Neill announced his resignation on Sunday after seven years in the top job following weeks of high-level defections from the ruling party.

"I am announcing today that I am stepping down as the Prime Minister of the Independent State of Papua New Guinea," O'Neill said in an emailed statement.

O'Neill, who handed the reins of power to former prime minister Sir Julius Chan, said the change of leadership will allow the country to "continue the reform agenda that we have been delivering."

Political instability is something of a fixture in the resource-rich but poverty-stricken South Pacific nation and O'Neill, who has been leader since 2011, has seen off previous attempts to topple him.

O’Neill had resisted calls to resign for weeks but his opponents said on Friday they had mustered enough support in parliament to oust him over a range of grievances including a gas deal with France's Total, which critics have questioned.

Defections from the ruling coalition have been going on for weeks and on Friday at least nine members switched sides, according to two ministers who were among them.

O'Neill's opponents needed to rally 62 members of PNG's 111-seat parliament to vote him out.

Opposition politicians said on Friday they would push for investigations in Australia and Switzerland into a A$1.2 billion ($830.76 million) loan arranged by finance group UBS if there was a change of government, the Australian Financial Review reported.

A report by the Ombudsman Commission of PNG into the 2014 deal that allowed the country to borrow from UBS to buy a 10 per cent stake in Australian Stock Exchange-listed energy firm Oil Search is scheduled to be tabled in parliament next week.

Oil Search in turn used the money to buy into the Elk Antelope gas field being developed by France's Total .

PNG is estimated to have lost 1 billion kina ($287 million) on the deal after being forced to sell the shares when the price fell in 2017.

Australian Prime Minister Scott Morrison thanked O'Neill for his friendship on Sunday. "I will look forward to working with the new prime minister of PNG in the same way I have enjoyed such a strong friendship and relationship with Peter O'Neill," he told reporters in Canberra.

(Reporting by Alison Bevege; Additional reporting by Tom Westbrook; Editing by Nick Macfie & Shri Navaratnam)


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