12 Feb 2015

Total clear for PNG project after dispute resolved

3:09 pm on 12 February 2015

A dispute over ownership of one of Papua New Guinea's largest natural-gas discoveries has been resolved in an international court.

InterOil last year agreed to introduce the French oil giant Total as a partner in development of the Elk and Antelope gas fields in Gulf province, but junior joint venture partner, Oil Search, disputed the deal, which is worth up to US$3.6 billion.

However, the Wall Street Journal reports that this week, a ruling by the International Court of Arbitration of the International Chamber of Commerce, has paved the way for Total to seal its acquisition of a 40% stake.

The court declined Oil Search's application that it should have been able to exercise so-called pre-emptive rights and buy the stake itself at the same price.

Analysts speculated that if Oil Search had won the dispute, it would have on-sold the stake to its current joint-venture partner at the nearby PNG LNG project, Exxon Mobil.

InterOil Refinery, Napa Napa, Papua New Guinea.

InterOil Refinery, Napa Napa, Papua New Guinea. Photo: RNZI / Johnny Blades