By Ross Kelly
SYDNEY--A dispute over the ownership of one of Papua New
Guinea's biggest natural-gas discoveries has been resolved in an
international court, paving the way for Total SA (TOT) to seal its
acquisition of a 40% stake in the assets.
InterOil Corp. (IOC) last year agreed to introduce the French
oil giant as a partner into the Elk and Antelope natural-gas
discoveries, but another party to the joint venture, Oil Search
Ltd. (OSH.AU), disputed the up-to-US$3.6 billion deal.
Oil Search argued it should be able exercise so-called
pre-emptive rights and buy the stake itself at the same price.
On Wednesday, however, Oil Search said the International Court
of Arbitration of the International Chamber of Commerce declined to
issue pre-emptive rights. Analysts had speculated that if Oil
Search had won the dispute, it would have on-sold the stake to
another big oil company, such as its current joint-venture partner
at the nearby PNG LNG project, Exxon Mobil Corp.
"In a complex, non-unanimous, judgement, the ICC decision
declared that Total is a party to the Elk/Antelope joint venture
operating agreement," Oil Search said in a statement. The court
also ruled that Total will have to comply with some transfer
clauses to close the deal.
"Oil Search anticipates that InterOil and Total will attempt to
comply with these terms and the company intends to work
constructively with its joint venture partners to resolve all
outstanding transfer and joint venture management issues," it
said.
Write to Ross Kelly at ross.kelly@wsj.com
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