Grabbing a tighter hold over license areas off the coast of Papua New Guinea means a better stake in liquefied natural gas, Oil Search Ltd. said Monday.
The company said it agreed to acquire a 40 percent stake in two license areas off the coast of Papua New Guinea from a subsidiary of CNOOC Ltd., China's largest producer of offshore crude oil and natural gas, for an undisclosed sum.
"Entering these licenses is consistent with the company's strategy to focus on areas that have the potential to support the company's expanding LNG portfolio," Oil Search Managing Director Peter Botten said in a statement.
Oil Search holds a key stake in Papua New Guinea's liquefied natural gas sector and touted itself as a company with a potential for capital and resource growth. In July, however, it declined to make a counter offer for rival player InterOil following a bidding war with Exxon Mobil by saying it was out of step with its shareholders' best interests.
Exxon offered a set payment for each trillion cubic-foot equivalent of resources in the Elk-Antelope basin in Papua New Guinea, subject to a cap of 10 trillion cubic feet equivalent. A liquefied natural gas project in Papua New Guinea, led by Exxon, marked a milestone with its 100th delivery last year.
On its deal with the CNOOC subsidiary, Oil Search said Exxon, which also acquired a 40 percent stake in the area in question, will take over as the operator of the license areas in the deep waters off the coast of Papua New Guinea.
"We are delighted to be partnering with ExxonMobil, which has significant experience in exploration and production in deep water, and we also welcome the opportunity to work with CNOOC Limited for the first time," Botten said.
