Papua New Guinea centric Oil Search Ltd was given last minute competition Friday in its proposed takeover of U.S. listed InterOil Corporation after the target received an unsolicited bid overnight.

Oil Search's interest in InterOil's proposed project would increase to 29 percent with Total the major shareholder, equal to its stake in PNG's second major LNG project led by ExxonMobil, PNG LNG, which came online late last year.

That improves the chances of an amalgamation between the two projects, preventing a wastage of money the way Australia's east coast producers have done, potentially cutting costs by at least 10 percent.

The deal originally concerned PNG's consumer and competition watchdog who flagged they may block the takeover on anti-competition grounds after learning about it during media reports. Oil Search was forced to clarify its position with PNG's Independent Consumer and Competition Commission (ICCC).

InterOil said it is taking all necessary steps under the existing binding agreement with Oil Search to engage in "further discussions and negotiations with the third party."

"There can be no assurance that any transaction will result from the unsolicited proposal or that the third party will ultimately enter into a definitive agreement to acquire InterOil," the company said.

"InterOil's Board of Directors does not intend to comment further on the unsolicited proposal until a transaction is negotiated with the third party or the unsolicited proposal is withdrawn."

Oil Search's shares were up 10 Australian cents, or 1.50 percent at 6.77 Australian dollars by 10:24 local time (AEST).
Source:XINHUA