Issue with gas deal

THE Independent Consumer and Competition Commission has expressed concern that there may be significant competition issues with Oil Search proposal to acquire a 19.3% stake in PRL 15 – the Elk and Antelope gas field development project – from Total SA.
Oil Search has a 29% interest in the PNG LNG project and the Oil Search plan would make it a significant stakeholder in both natural gas projects in PNG.
Commissioner and chief executive Dr Billy Manoka  (pictured) said: “The commission would require a proper opportunity to analyse the proposal, which can occur if the parties apply to the commission for either a clearance or an authorisation.
“The parties to the proposed transaction have not approached the commission with any information about the proposal.”
Manoka said: “Should Oil Search and Total SA go ahead with the arrangement, without applying for clearance or authorisation, the commission reserves all its rights in the matter, including instituting legal action in court to challenge the acquisition, if it forms a concluded view that it would, or would be likely, to substantially lessen competition.” 
In the meantime, the commission would monitor developments in the gas sector closely,  he said.
The commission was concerned that this proposed involvement of Oil Search in PRL 15 may substantially lessen competition. 
Natural gas is a significantly cheaper fuel than diesel for electricity generation, and lower generation costs can drive economic growth. 
More broadly, gas had many industrial uses and a competitive gas market can widen the industrial base, create jobs, improve living standards and reduce poverty.