It has emerged the country's public prosecutor asked the chief justice to set up a leadership tribunal to investigate the prime minister's conduct in relation to the loan with Swiss investment bank UBS.
Oil Search funded its acquisition of a 22.8% interest in InterOil's Elk-Antelope discovery in PNG through the placement of 149.9 million shares to the PNG government, giving the Australian company a strategic interest in the country's largest undeveloped gas-condensate resource.
Responding to the announcement, O'Neill said he welcomed the notification from the public prosecutor but said sources behind the allegations were "somewhat dubious and driven by people with political motivation".
In a statement, O'Neill said he would use the opportunity to provide clarity on the investment by the state into the national resources sector.
"The Public Prosecutor's referral is noted, and we welcome this decision," O'Neill said.
"It gives us an opportunity to go before the independent tribunal and the courts to determine the outcomes of these decisions based on real evidence that will be presented to the tribunal and can be cross-examined.
"Our actions have been to ensure that the state continues to have some ownership of Oil Search which it has been doing since its inception.
"We have acted in the best interests of our country, in the best interest of our people, and it is important that we continue to be participants in resource development in our country.
"The only way to effectively participate in these resource developments is by making sure that we have ownership of some of the shares in those companies.
"Otherwise we will continue to be bystanders while other people come and continue to develop our resources."
O'Neill said the share deal was "not a one-man decision" but was made and endorsed by the government's National Executive Council.
"We have a Supreme Court reference that is currently before the courts seeking reference to the decision on the judicial review on some of the questions raised about this particular transaction," he added.
"We will ask the courts for determination on these issues.
"The only concern I have is the individuals that have political interests seem to have access to decisions and processes before this information is officially released.
"That is a serious concern and we will be asking the appropriate authorities to carry out independent investigations.
"These people have inappropriate access to information even before the persons affected."