Seeking Alpha

Oil Search disputes InterOil-Total deal in Papua New Guinea

  • Oil Search (OISHF) is contesting Total’s (TOT) agreement earlier this week to acquire a 40% stake in InterOil’s (IOC) natural gas discoveries in Papua New Guinea, a dispute which could require international arbitration to be resolved.
  • The dispute surrounds stakes in the Elk and Antelope fields, coveted because the gas could be used either for a possible expansion of a $19B liquefied natural gas project that ExxonMobil (XOM) is building with Oil Search, or for a rival project.
  • Analysts say the outcome of the dispute is unclear, but some speculate Oil Search's aim may be to keep the door open to XOM to enter the Elk-Antelope joint venture.
  • Meanwhile, IOC has spudded its third well in as many weeks in Papua New Guinea with up to five more planned over the next year or so.
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