OIL Search Ltd is finalising the terms to sell 3.5% of its total 34% stake in the PNG liquefied natural gas (LNG) project.
When finalised, this would leave the oil explorer and operator of most operating oil fields in the country with 30.5% equity in the project.
The 3.5% stake lies within Petroleum Development Licence 2 (PDL 2) at Kutubu field in Southern Highlands province.
The sale has been proposed to Abu Dhabi’s International Petroleum Investment Corp (IPIC).
Oil Search managing director Peter Botten said in a statement the terms of the transaction were mostly agreed but details would be released later upon approvals by the boards of both Oil Search and IPIC.
Mr Botten said funds received from the sale would help finance Oil Search’s share of capital costs in the PNG LNG project.
The funds would also be used to progress a range of growth initiatives, primarily designed to lay the foundations for further expansions and growth in LNG and other gas-based industries in the country.
Meanwhile, Oil Search recorded a 73% decline in profit for the first half of this year compared to the same period last year.
The company said the plunge – after seven years of strong growth – was due to weaker oil prices stemming from global financial crisis recording US$35.6 million (K97.8 million) compared to US$133.3 million (K366.2 million) same period last year.
Total oil and gas production in first half was 3.81 million barrels of oil equivalent (mmboe), a 12% lower than same period last year.
By end June, Oil Search had a cash position of US$410.5 million (about K1,127.7 million) and was debt-free throughout the period.