Oil Search boss Peter Botten has defended the company’s decision to contest a Papua New Guinea gas deal between French major Total and US-listed InterOil, saying original agreements should be honoured.
“We believe people should stick by the joint operating rule book,” Botten said.
Oil Search has embarked on a dispute process over InterOil’s sale of a stake in Elk and Antelope to Total, and whether Oil Search had pre-emptive rights, which involves arbitration proceedings in London and injunctive relief through PNG courts.
Elk and Antelope, which may contain up to nine trillion cubic feet of gas, or enough for a two-train LNG project, are a major prize because their gas has a simple, cost-effective way to market through expansion of the nearby $US19bn ($20.24bn) PNG LNG plant owned by Exxon, Oil Search and Santos.
Botten yesterday said that the parties were in discussions in an effort to find a commercial resolution to the dispute.
“The arbitration remains on process, and frankly, there is a lot of value to Oil Search and others,” he said.
The Oil Search managing director said at the Macquarie Group conference in Sydney yesterday that he remained unperturbed by any suggestion that the company was a takeover target of large players such as Woodside Petroleum.
“At the end of the day, it will happen or not happen, it is up to them,” he said.
“If shareholders get a good offer and they want to sell, good on them; if not, we will just keep doing what we’ve done reasonably well over the last 20 odd years.”
Botten played down concerns about additional gas supply undermining PNG projects, saying that supply would increase, but so would demand.