Oil Search

In a statement released on Monday, ICCC Commissioner, Paulus Ain says the proposed acquisition may raise competition issues under section 69 of the ICCC Act.

“If the transaction proceeds without a clearance or an authorization from the ICCC, we reserve our rights to institute legal action in Court to challenge the acquisition, if we ultimately form a concluded view that the acquisition would have some serious negative implications on competition,”

This follows notification on 18 July from InterOil that it had received a ‘Superior Proposal’ from Exxon Mobil Corporation (ExxonMobil) and that the InterOil Board intended to change its recommendation and enter into an Arrangement Agreement with ExxonMobil.

The sharp fall is believe to be the low point in the LNG contract pricing cycle, and lower sales volumes.

During the period, the Company paid US$145 million (K443.29m) in scheduled semi-annual principal and US$83 million (K253.75) in interest under the PNG LNG Project finance facility, as well as US$39.1 million (K119.54m) on capital expenditures.

Managing Director Peter Botten said despite funding these disbursements, net debt declined slightly, from US$3,315 million to US$3,304 million, highlighting the strong cash flows generated from operations.

Oil Search in May announced it was buying rival InterOil Corp for $US2.2 billion ($A3 billion). At the same time, Oil Search took some of the risk out of the deal by signing an exclusive memorandum of understanding with French group Total to take equity positions in the InterOil assets.

However, today Oil Search says it’s been notified by InterOil that it has received a better offer from Exxon Mobil, Oil Search’s co-venturer in the PNG LNG Project.

The certification process commenced on 13 March 2016, in line with the agreement between Oil Search and PAC sellers relating to the Company’s acquisition of its interest in PRL 15 in early 2014.

Oil Search Managing Director Peter Botten, said the agreement is an important milestone that enhances Oil Search confidence in the Elk-Antelope resource and confirms their view of the potential for at least two more LNG trains in PNG.

The hospital ran out of water late last year creating an emergency situation that seriously affected its capacity to care for patients and staff.

The competition will be held on Friday, August 12, at the Royal Port Moresby Golf Club.

The event, organised by the Papua New Guinea Cancer Foundation, was launched yesterday in Port Moresby as registration opens to corporate companies and individual groups.

The launching saw major sponsor Oil Search continuing its support with K25, 000 towards the event.

Oil Search has been involved with the Daffodil Corporate Golf Challenge for more than 10 years.

Oil Search had made a bid of US$2.2 billion (K7 billion) and the decision of the offer will be known next month when Inter Oil convenes its annual general meeting next month.  

Oil Search is a joint venture partner in the PNG LNG Project with the interest of 29 percent.

It also has a stake of 22 percent in the Papua LNG Project.

Given Oil Search as these interests, the ICCC is concerned that this proposed acquisition may substantially lessen competition in the gas markets in PNG.

He said the deal will deliver tangible benefits for Papua New Guinea.

O’Neill also highlighted the benefit of the execution of a MoU between Oil Search and Total for a back-to-back sale of Oil Search’s interest acquired to Total following the completion of the InterOil acquisition.

“This acquisition will provide cost savings and efficiencies for our nation’s greatest growth opportunities, which will directly benefit the people of Papua New Guinea,” he said.

Managing Director Peter Botten in a statement said announcement of the acquisition will place the company in an even better position to advance the Company’s PNG growth opportunities.

He said Oil Search has also today executed a Memorandum of Understanding (MoU) with Total, for a back-to-back farmout of some of the InterOil interest acquired, strengthening the Company’s existing partnership with Total and ensuring the Company’s efforts on the Papua LNG Project remain aligned.