Oil Search-InterOil war

INTEROIL Corporation said it will strongly defend the recent deal it signed with French oil company Total SA involving a rich gas deposit.
The company was reacting to a move by Oil Search seeking to set aside a transaction it reached with Total SA announced last month, giving the French oil concern a 40.1% interest in petroleum retention licence (PRL) 15 which covers the Elk/Antelope project area.
Last Friday, Oil Search issued a notice of dispute, saying it will question the recently-signed InterOil-Total SA agreement.
The notice was signed by managing director Peter Botten.
InterOil last week announced that it had closed a revised sales and purchase agreement covering the Elk-Antelope gas field under PRL 15.
Under this deal, InterOil will retain 35.5% of the licence and immediately will receive US$401 million (K971 million) for closing the transaction.
Further, it will receive US$73 million (K176.75 million) on a  final investment decision for an Elk-Antelope LNG project and US$65 million (K157 million) on the first LNG cargo.
The oil company will also receive payments for certified gas volumes following appraisal of Elk-Antelope.
All fixed and variable payments that were agreed last December continue to apply pro-rated according to the new equity split, including those for exploration, appraisal and resource certification, InterOil said.
InterOil chief executive Dr Michael Hession said the agreement “enabled InterOil to maintain a material interest in PRL 15”, which covers one of Asia’s largest gas discoveries of the past 20 years.
He said: “The agreement clears the way for co-operative joint venturers, who all share the government’s wish to monetise Elk-Antelope as quickly as possible, through the fast-growing Asian market,” Dr Hession said.