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Papua New Guinea PM sees value in Santos-Oil Search merger

The logo of Australian oil and gas producer Santos Ltd is pictured in Sydney on February 15, 2016. REUTERS / Jason Reed

Aug 5 (Reuters) – Papua New Guinea Prime Minister James Marape said on Thursday that the potential takeover by Australian firm Santos Ltd (STO.AX) of AU $ 8.4 billion (AU $ 6.2 billion) of dollars) from the local Oil Search Company (OSH.AX) could generate high value for the country but should satisfy “the national interest”.

Oil Search, also listed in Papua New Guinea, and Santos have yet to obtain regulatory clearance from the Pacific Island government for the merger.

The combined entity would hold oil and gas assets in Australia, Papua New Guinea and Alaska, with the crown jewel considered to be their combined 42.5% stake in the Papua New Guinea LNG project .

Marape said he wanted the merged entity, which would be one of the world’s top 20 oil and gas companies, to ensure that a significant portion of its business remained in Papua New Guinea and supported local jobs. . Read more

“We don’t want the biggest oil and gas company operating in our country to be just a branch of a foreign company.”

A spokesperson for Oil Search said the company briefed Marape on recent leadership changes and appreciated the continued constructive engagement on his part.

“We recognize the importance of Oil Search to the PNG economy and will maintain our continued commitment to the country and the communities in which we operate,” the company said.

Papua New Guinea derives much of its revenue from the country’s oil and gas fields, where global players like Exxon Mobil (XOM.N) and TotalEnergies SE (TTEF.PA) have invested.

($ 1 = 1.3528 Australian dollars)

Reporting by Harish Sridharan in Bengaluru; Editing by Ramakrishnan M and Uttaresh.V

Our Standards: Thomson Reuters Trust Principles.

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