Papua New Guinea (PNG) company Kumul has advised Santos that is has extended its $US55 million ($84.74 million) offer for a 5 per cent project interest in the company’s PNG LNG project until April.
In September 2022, Santos received a binding conditional offer from Kumul, PNG’s national oil and gas company, which involves an asset value of US$1.4 billion, including a proportionate share of project finance debt that stands at an estimated $US0.3 billion.
The offer is conditional on Kumul obtaining waivers of certain pre-emptive rights by each other PNG LNG project participant under the project operating agreement to allow the transaction to proceed.
The offer is expressed to be irrevocable, except in limited circumstances, and was open for acceptance until 31 December 2022. However, the offer will remain open until 30 April 2023. Santos has agreed to deal with Kumul during this period regarding the sale of equity in PNG LNG.
The offer forms part of the PNG government’s goal to secure a greater equity interest in the development of the state’s natural resources. When accepted it will increase PNG’s equity interest to 22 per cent, leaving Santos with a substantial 37.5 per cent interest.
Managing director and CEO of Santos Kevin Gallagher said that the offer represents an opportunity for alignment in future development strategies, indicating the potential for PNG LNG infrastructure.
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