Report: Total could bolster grip on Asian gas market by acquiring InterOil

By KELLY GILBLOM
Bloomberg

Total, Europe’s third-biggest oil company, would expand its foothold in Asia’s liquefied natural gas (LNG) market by acquiring InterOil Corp., according to a report by Bloomberg Intelligence.

Total would almost double its 40% state in Papua New Guinea’s Elk-Antelope gas fields, which may emerge as the world’s lowest cost exporter to Asia, with a takeover of Singapore-based InterOil, Lu Wang and Philipp Chladek, analysts with BI, said in a note Tuesday. Oil Search has a 23% stake in the gas field. InterOil hasn’t ruled out a takeover.

Oil giants have turned to LNG as easy-to-find crude disappears and prices tumble. Royal Dutch Shell’s $70 billion bid for BG Group Plc is seen as a push for gas dominance and an effort to rebound from its worst production performance in 17 years.

Evgeniya Mazalova, a Total spokeswoman, said in an e-mail that the company doesn’t comment on market rumors. Its former senior vice president of Asia-Pacific exploration and production, Jean-Marie Guillermou, said last year the company’s 2014, $401 million purchase of a stake in the project “provides an ideal opportunity to grow our business in the Asia-Pacific region.”

Damaris Minikula, a spokesman for InterOil in Papua New Guinea, didn’t immediately respond to an e-mail seeking comment.

The Courbevoie, France-based producer has not capitalized on the US shale boom, which has led to record-high natural gas production. It will cut spending and jobs, and curtail exploration this year after Brent crude, the benchmark blend for more than half the world’s oil, slumped by half amid a supply glut, the company said in an earnings statement.

Exxon Mobil Corp., which also operates a $19 billion LNG project in Papua New Guinea, started producing gas for buyers in Asia last year. The Irving, Texas-based company said it expects the project will produce 9 trillion cubic feet of natural gas over 30 years.

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