PNG court approves Santos, Oil Search merge

PNG National Court has considered the merger after twice delaying the scheduled first hearing for the deal.

The scheme meeting will take place on December 7, as per the orders from the National Court of Papua New Guinea.

The PNG government had previously raised concerns about the $8 billion acquisition by Santos, saying it would harm national interests as it could result in a foreign firm holding too much of domestic oil and gas resources.

In a joint statement, Oil Search and Santos said and independent expert had found the merger was in the best interests of Oil Search shareholders in the absence of a higher offer.

If a deal comes through, Santos will become the largest shareholder in the country’s biggest resource project, the PNG LNG project, operated by U.S. oil company Exxon Mobil Corp.

PNG National Court considered the merger after twice delaying the scheduled first hearing for the deal, most recently from Wednesday.

Oil Search’s board reiterated its unanimous recommendation that shareholders vote in favour of the deal, which was announced in September.

“The merger brings together two highly complementary businesses and creates an oil and gas company of significant size with a portfolio of geographically and product diversified long-life and low-cost assets,” Oil Search chairman Rick Lee said.

The merger will create a top-20 global oil and gas producer, with production in Australia and Papua New Guinea and with a promising oil project in Alaska, although Santos is widely expected to review ownership of that venture for a potential sale.

For more information visit Santos.

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