Business | Oil & Gas
Oil Search plans to sell Middle East assets
Oil Search Ltd., Papua New Guinea's biggest oil producer, plans to sell interests in the Middle East and North Africa to help fin-ance a liquefied natural gas project in the Pacific nation.
- Bloomberg
- Published: 00:38 March 20, 2008
Sydney: Oil Search Ltd., Papua New Guinea's biggest oil producer, plans to sell interests in the Middle East and North Africa to help fin-ance a liquefied natural gas project in the Pacific nation.
The company's share of capital investment for the proposed ExxonMobil Corp.-led project is about $3 billion, including equity of as much as $1.3 billion, it said yesterday in a presentation to investors. The total investment in the first phase of the project is as much as $11 billion, Oil Search said.
Exxon and its partners, which include Santos Ltd., said on March 14 they signed an operating agreement for the project and are waiting to resolve fiscal terms with the government before starting engineering work.
Schedule
The partners may approve the project for development in the fourth quarter of 2009, with first deliveries targeted for the end of 2013, Oil Search said.
"Gas will progressively be delivered over the next few years," Peter Botten, managing director of the Port Moresby-based company, said yesterday in a conference call on the outcome of a strategic review. "LNG is the first phase of growth."
Oil Search gained as much as 25 cents, or 5.4 per cent, to A$4.90 in Sydney trading on the Australian Stock Exchange.
The project will require total debt funding of about $9.9 billion, of which Oil Search's share is about $2.9 billion, Oil Search said in the presentation, which was lodged with the exchange. Potential funding sources include export credit agreement loans, bank debt and debt capital markets, it said. Future phases of the project will take the total cost beyond $11 billion, Bob Marcellus, executive general manager, gas, said.
Assets to be sold will probably include exploration and production interests in Yemen and Egypt, exploration acreage in Tunisia and possibly exploration interests in Libya, Oil Search said.
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