Oil Search 1st Half Profit More Than Doubles; Says PNG LNG On Track

Oil Search Ltd. (OSH.AU) on Tuesday said first half profit more than doubled due to higher oil prices and it moved to address concerns that regime change in Papau New Guinea will affect its US$15 billion gas export joint venture with ExxonMobil Corp. (XOM).

Net profit for the six months to June 30 rose to US$114.5 million from US$52.9 million a year earlier.

Oil Search shares have recently come under pressure amid concerns the new PNG government could give more power over the country's energy and mineral resources to landowners.

"Dialogue between the government and project developers about improving the system, transparency and governance for benefits distribution (to landowners) has always been constructive and we are confident that these discussions, on improving the efficiency of benefits delivery, will continue with the new government in PNG, led by Prime Minister Peter O'Neill," Oil Search said.

O'Neill became Prime Minister earlier this month, replacing Michael Somare, who had ruled PNG on and off for decades.

Oil Search said Exxon has indicated that PNG LNG remains on track to ship its first cargo in 2014.

Revenue rose to US$371.1 million, from US$276.6 million in the previous first half. The interim dividend was unchanged at 2 cents a share.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com

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