06-01-2016, 12:47 PM
Deal will make Oil Search 'very, very competitive'
ALICIA BARRY: You're throwing a lot of money at this deal. How do you justify it with oil prices where they are?
PETER BOTTEN: Well I suppose certainly this low commodity period - low commodity price cycle - is a time when you have to be extremely careful about where you do and how you spend your money.
And I suppose what we're doing with the acquisitions that we announced today and the sell down to Total is basically looking at ways to optimise our future LNG business in Papua New Guinea primarily.
The synergies between InterOil and Oil Search are very substantial, and with those synergies, together with the influence that a merger brings, delivers us a real opportunity to drive synergy and co-operation between PNG LNG, which we're a substantial player already and obviously it's on production.
The development, Papua LNG, and cooperation between those two projects can deliver substantial further value and be very, very competitive in what is a challenging LNG market over the next three to five years.
That's what we deliver through this deal, enhanced by the fact that the deal's underwritten by Total and who has again committed to cooperate and a platform for cooperation between the two projects.
Deal has been on Oil Search's mind for over six months
ALICIA BARRY: You told Ticky Fullerton on this program back in February that you would look for opportunities that make sense timing and price-wise in PNG.
Has this deal been on your mind for some time?
PETER BOTTEN: Look, I think it's certainly been around in our minds strategically for probably six-plus months.
It's all about timing, it's all about process and pricing.
And I suppose we've got to a comfort level in discussions with InterOil that this is a good time to do it.
We can significantly influence the next phase of LNG growth in PNG and be a significant player in that rather than being to a degree a passenger with the big boys.
ALICIA BARRY: InterOil's board has had a colourful couple of years to say the least with the board battling with its former founder.
PETER BOTTEN: Yes, it has. I mean, clearly I'm mindful of the press and the various sites that have been out there talking about this.
ALICIA BARRY: Did those problems make it an easy target?
PETER BOTTEN: Look, I think they were irrelevant to our position. Our position was very much driven by what value we saw in it for Oil Search and what strategic importance and what influence we can play in the next phase of growth and position ourselves for that.
ALICIA BARRY: You're throwing a lot of money at this deal. How do you justify it with oil prices where they are?
PETER BOTTEN: Well I suppose certainly this low commodity period - low commodity price cycle - is a time when you have to be extremely careful about where you do and how you spend your money.
And I suppose what we're doing with the acquisitions that we announced today and the sell down to Total is basically looking at ways to optimise our future LNG business in Papua New Guinea primarily.
The synergies between InterOil and Oil Search are very substantial, and with those synergies, together with the influence that a merger brings, delivers us a real opportunity to drive synergy and co-operation between PNG LNG, which we're a substantial player already and obviously it's on production.
The development, Papua LNG, and cooperation between those two projects can deliver substantial further value and be very, very competitive in what is a challenging LNG market over the next three to five years.
That's what we deliver through this deal, enhanced by the fact that the deal's underwritten by Total and who has again committed to cooperate and a platform for cooperation between the two projects.
Deal has been on Oil Search's mind for over six months
ALICIA BARRY: You told Ticky Fullerton on this program back in February that you would look for opportunities that make sense timing and price-wise in PNG.
Has this deal been on your mind for some time?
PETER BOTTEN: Look, I think it's certainly been around in our minds strategically for probably six-plus months.
It's all about timing, it's all about process and pricing.
And I suppose we've got to a comfort level in discussions with InterOil that this is a good time to do it.
We can significantly influence the next phase of LNG growth in PNG and be a significant player in that rather than being to a degree a passenger with the big boys.
ALICIA BARRY: InterOil's board has had a colourful couple of years to say the least with the board battling with its former founder.
PETER BOTTEN: Yes, it has. I mean, clearly I'm mindful of the press and the various sites that have been out there talking about this.
ALICIA BARRY: Did those problems make it an easy target?
PETER BOTTEN: Look, I think they were irrelevant to our position. Our position was very much driven by what value we saw in it for Oil Search and what strategic importance and what influence we can play in the next phase of growth and position ourselves for that.