THE proposed Santos Ltd-Oil Search Ltd merger can deliver higher capacity and value to resource projects such as the Papua LNG, Pasca A and Pn’yang, says Prime Minister James Marape.
Marape said the Government was closely monitoring the proposed merger announced on July 21.
“Oil Search Ltd is a prominent PNG company whose activities comprise a significant percentage of PNG’s gross domestic product and provides the livelihood to thousands of Papua New Guineans both directly and indirectly.
“Any proposed merger must satisfy the national interest test,” he said.
Marape said the Government had also noted the recent changes to the board and management of Oil Search.
He said the Government’s priority was to ensure that projects such as the Papua LNG, Pasca A and Pn’yang moved forward as soon as possible.
“The merger of these two important licenced players in the market can deliver higher capacity and value to our projects,” he said.
“It brings a stronger combined balance sheet to the table.
“The merger is a strong positive statement in terms of investor confidence in the operating environment.”
Marape said PNG welcomed the fast-tracking or prioritising of any upstream oil and gas development and downstream LNG export investment, whether by capital raising and investment or as a direct consequence of a merger or an acquisition.
The long-term benefits to PNG include:
- RAPID development of PNG’s world-class proven reserves;
- PRIORITISING of PNG projects including integration wherever possible; and,
- EMPLOYMENT and industry training of PNG citisens/residents;
Marape said while business mergers or takeovers were determined by the parties themselves and their commercial interests, it was important to have meaningful capacity and participation through an extensive and senior management level in-country corporate office and leadership thrust.
“It is important that the merged entity ensures significant local influence on decisions affecting Papua New Guinea assets, jobs and broader community.”
Statement
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