Oil Search, InterOil merger facing PNG watchdog scrutiny

Oil Search’s proposed acquisition of InterOil valued at US$2.2 billion could run into problems if the deal does not clear the anti-competition regulatory hurdle.

Papua New Guinea Independent Consumer and Competition Commission’s Paulus Ain told Reuters that the two companies have not yet engaged with the commission to acquire the regulatory approvals.

He noted that blocking the transaction is among the options for ICCC, however, he called on the two companies to seek relevant approvals and an independent assessment of the proposal.

ICCC’s reaction comes following the comments made by an ex InterOil CEO claiming the deal undervalues InteOil.

A spokesperson for Oil Search told Reuters the two companies plan on starting discussions with the PNG watchdog to discuss the issue.

For a reminder, Oil Search last week signed a deal to acquire all of the outstanding shares in InterOil. Under the agreement, InterOil shareholders would receive 8.05 Oil Search shares plus a contingent value right for each InterOil share.

LNG World News Staff