PERTH, Australia, Sept. 8 (UPI) — Australian energy company Woodside said Tuesday it made an offer for regional counterpart Oil Search to tap deeper into the Papua New Guinea gas market.
“Woodside confirms that it provided Oil Search a confidential and non-binding proposal to merge through a scheme of arrangement under the Papua New Guinea Companies Act,” the company said in a statement. “There is no certainty that these discussions will result in a transaction.”
Woodside is Australia’s largest oil and gas company, serving as the operator of the giant Pluto liquefied natural gas project in the country. Papua New Guinea, meanwhile, is positioned as a key energy hub, helping to meet Asia-Pacific demands for LNG.
The Asian Development Bank estimates Pacific economies will grow by an average rate of 9.9 percent this year, with Papua New Guinea helping to boost short-term overall growth with LNG.
The deal for Oil Search would be valued at around $8.1 billion and comes at a time when most energy companies are spending less to conserve capital in the weak oil economy. Oil Search expressed caution about the outcome of the deal.
“The company wishes to emphasize that there is no guarantee that a binding proposal can be agreed between the parties,” it said.
Oil Search holds a key stake in Papua New Guinea’s LNG sector and touted itself as a company with a potential for capital and resource growth.
“Clearly, Oil Search shareholders are entitled to an offer which adequately reflects this value potential,” it said.
Woodside in April closed on a $2.1 billion deal to acquire Canadian interests from rival Apache Corp.
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