- Oil Search's (OTCPK:OISHF) deal to buy up and divide with Total (NYSE:TOT) the assets held by their Papua New Guinea partner InterOil (NYSE:IOC) may knock as much as $3B off the costs of the country’s two liquefied natural gas projects and speed up development if they cooperate, OISHF managing director Peter Botten says.
- “This deal allows us to influence how Papua LNG and PNG LNG can cooperate,” Botten says. “There are substantial capital cost reductions and schedule optimization that can be done with cooperation."
- Taking over IOC will make it easier for OISHF and TOT to integrate their LNG plant with Exxon Mobil's (NYSE:XOM) $19B PNG LNG project, says Bernstein analyst Neil Beveridge.
- "Oil Search has always been keen on the two projects seeking ways to collaborate or combine to reduce costs, so the deal increases the possibility of the two developments integrating,” says Wood Mackenzie's director of Asia-Pacific upstream research.