French energy company Total said its reviewing its options after rival Exxon made a bid on assets in Papua New Guinea. File photo by Stephen Shaver/UPI | License Photo
PARIS, July 20 (UPI) -- French energy company Total said it was taking note of a competing offer for Papua New Guinea gas partner InterOil made by U.S. rival Exxon Mobil.
Exxon this week made a counter $2.2 billion bid for InterOil, moving ahead of a bid backed by Total from Oil Search. Total in a statement said it was analyzing the competing offer, noting it considered the initial bid by Oil Search represented a fair market value.
Oil Search holds a key stake in Papua New Guinea's liquefied natural gas sector and touted itself as a company with a potential for capital and resource growth.
"It was also clear to Total that a portion of the acquired interests would have to be offered to certain LNG buyers [across the project's gas stream,]" the French company said in a statement.
Papua New Guinea is positioned close enough to expanding Asian companies to capitalize on their growing appetite for natural gas. More than 7 million tons of LNG have been shipped from a project in the country led by Exxon since it opened two years ago.
The facility is expected to produce more than 9 trillion cubic feet of natural gas over its 30-year lifespan. Last year, however, the Asian Development Bank cautioned that Papua New Guinea's growth prospects could dwindle as the boost for LNG exports fades from the country's economy. With energy prices collapsing, the International Energy Agency has warned a "temporary window of opportunity" may be closing on economies looking to capitalize on natural reserves.
In December, Woodside Petroleum, Australia's largest oil and gas company, withdrew an $8.1 billion proposal to acquire Oil Search. Oil Search at the time expressed caution about the outcome of the deal, saying it undervalued the company.
Each side has until Thursday to consider the Exxon proposal.