The merger of Santos Ltd. and the Papuan New Guinea-listed Oil Search is feared to hurt PNG’s national interest by giving a foreign entity too much access.
On Thursday, PNG’s Deputy PM Samuel Basil said, “If the merger will result in the weakening of any Papua New Guinean shareholders or shareholder interests, reduction in market liquidity, the potential for job losses, potential delisting from PNGX, and loss of local ownership of the company assets to a foreign interest, it is not in PNG’s national interest.”
Previously in August, PM James Marape had also expressed similar concerns.
If Santos did not list the merged group in PNG, local shareholders would be forced to hold Australian shares, hitting the PNG exchange’s listing fee income and portfolio fees for local fund administrators. PNG people will be denied access to direct investment into significant domestic projects of national importance, like the ExxonMobil PNG LNG and Total Papua LNG, Basil elaborated.
Other than that, Santos would be the largest stakeholder in the country’s biggest resource project, the PNG LNG project, operated by Exxon Mobil Corp, by increasing Santos’ stake to 42.5%.
Oil Search has agreed to a proposed takeover by Santos at AUD8.4 billion (USD6.2 billion) in August. The finalization of terms will commence on September 13.
