Santos secures $1.1bn bid for 5% stake in PNG LNG from state-owned Kumul – Reuters

The logo of Australian oil and gas producer Santos Ltd is pictured at its office in Sydney February 15, 2016. REUTERS/Jason Reed/File Photo

Sep 27 (Reuters) – Santos Ltd (STO.AX) has received a $1.1 billion firm offer from Papua New Guinea state-owned Kumul Petroleum for a 5% stake in the gas project Liquefied Natural PNG (PNG LNG), the nation’s largest resource project.

Australian Santos became PNG LNG’s largest shareholder with the takeover of Oil Search last year and even with this sale will remain the largest shareholder in a project considered one of the cheapest LNG producers in the world.

If the deal goes through, Kumul’s stake in PNG LNG will increase to 22.8%, which, according to the company’s managing director, Wapu Sonk, “will bring enormous economic and social benefits to the nation”.

“This is a massive investment for us, costing approximately $1.1 billion,” Sonk said in a statement.

He was unavailable on Tuesday to comment on how Kumul will pay for participation.

PNG has sought greater control of its oil, gas and mineral resources since Prime Minister James Marape took office in 2019. He returned as the country’s prime minister in August this year after a national election, promising to “getting more out of our resources” without scaring away investors. Read more

Kumul’s offer is conditional on obtaining waivers of pre-emptive rights from the other partners in the project, which are Exxon Mobil Corp (XOM.N), the operator holding 33.2% of the capital, a unit of Japanese JX Holdings Inc and the State of PNG. owned by Mineral Resources Development Co.

Exxon and JX Nippon Oil & Gas Exploration were not immediately available for comment.

Santos said it had agreed to deal exclusively with Kumul until Dec. 31 regarding the sale of the stake in PNG LNG.

If the sale goes through, Santos will own 37.5% of the project.

Santos said in August that he expected to collect proceeds from the sale of a 5% stake in PNG LNG “in line with market consensus valuation,” which was around $1.5 billion.

The company aimed to raise up to $3 billion through asset sales this year, but failed to find a buyer for its stake in the Pikka oil project in Alaska and postponed the sale. a stake in the Dorado oil and gas project off Western Australia as it reviews the development. plans.

Reporting by Harish Sridharan in Bengaluru; Additional reporting by Sonali Paul in Melbourne; Editing by Shailesh Kuber and Stephen Coates

Our standards: The Thomson Reuters Trust Principles.