Tuesday, March 17, 2009

Abu Dhabi snaps up Oil Search stake

The Abu Dhabi government has completed its US$1.1 billion purchase of the government of Papua New Guinea's equity in Oil Search, the country's leading oil and gas operator.

International Petroleum Investment Corporation (IPIC), an investment vehicle for the Abu Dhabi government, said it bought a five-year exchangeable bond issued by the PNG government. Upon conversion of the bond, IPIC will acquire PNG’s entire 17.6% equity stake in Oil Search thus becoming the largest shareholder in Oil Search. The PNG government will use the funds for its equity share of capital costs in the ExxonMobil-led PNG liquefied natural gas project. IPIC’s managing director Khadem Al Qubaisi said: “This is only the second acquisition in which IPIC has used a convertible instrument, and we envisage wider use of such mechanisms in future IPIC investments. We are excited about working with Oil Search, which IPIC considers to be a dynamic and innovative partner; we are very pleased to be participating in the PNG LNG project, which promises to deliver 30 years of clean energy supply to the growing Asia-Pacific market; and we are happy to have forged constructive links with the PNG government, which we hope will provide a platform for further Abu Dhabi investments in PNG."
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