Oil Search Ltd, Papua New Guinea's largest company, has said it will divest part of its stake in ExxonMobil Corp led PNG LNG liquefied natural gas terminal in Papua New Guinea to Abu Dhabi-based International Petroleum Investment Co to help fund the massive project.
The company has also reported a sharp downturn in the first half profit on lower oil prices and asset sales in the previous corresponding period although the fall was less than what analysts had forecast. Net profit for the six months period upto 30 June dropped to $35.6 million from $264.4 million in first half of 2008 when it had booked a one-off gain with the sale of its Middle Eastern and North African assets.
The company has said it is in advanced stage talks to sell a 3.5-per cent stake in PNG LNG with full details such as price to be announced once the deal is secured.
The part sale of the project has been on the list of options suggested by analysts for strengthening the funding capacity, but some investors are concerned the company would have to conduct and equity listing and the proposed stake sale announced would cool those concerns for the moment.
J P Morgan estimated in May that Oil Search could raise $500 million for a 3 per cent interest in PNG LNG which is held to the extent of 34 per cent.
Underlying profit was also $35.6 million, which was down from $133.3 million and higher than the consensus forecast according to UBS and Macquarie of $28.7 million.
Oil Search declared an interim dividend of 2 cents a share which was down from 4 cents in 2008.