ExxonMobil has made a bid worth at least US$2.2bn for InterOil and its stake in a large gas field in Papua New Guinea. InterOil had already received an offer by Papua New Guinea's oil and gas exploration and development company Oil Search.
Oil Search owns stakes in the existing 6.9 Mt/year PNG LNG project (29% Oil Search, 33.2% ExxonMobil, 16.6% government and 13.5% Santos) and in the proposed 6.8 Mt/year Papua LNG project (23.4% Oil Search, 40.1% Total and 36.5% InterOil), that would tap gas resources from the large undeveloped Elk-Antelope gas field. Oil Search is seeking to tie the two LNG projects together to cut costs and accelerate the development of the new gas field. In May 2016, the group signed an exclusive Memorandum of Understanding (MoU) with Total, under the terms of which Oil Search would sell down 60% of InterOil’s interests in PRL 15 and 62% of InterOil’s interests in its other exploration assets to Total following the successful completion of Oil Search’s acquisition of InterOil. Following the sell-down to Total, Oil Search expects to have an equity interest in PRL 15 of up to 37.4% (or 29.0% post government back-in), with Total holding an equity interest in PRL 15 of up to 62.1% (or 48.1% post government back-in). This equates to Oil Search selling down 60% of InterOil’s 36.5% (28.3% post government back-in) PRL15 interest to Total.
If ExxonMobil's bid is successful, the group would be the majority shareholder of the existing LNG plant and would have a stake in Papua LNG. Oil Search has until 21 July 2016 to submit a revised offer and is consulting Total on raising its bid.