Oil Search Ltd has sold a package of its Middle Eastern and North African assets for $US200 million to focus on the development of a Papua New Guinea liquefied natural gas project.
The oil and gas producer sold eight of its assets, three of which are in Egypt and five in Yemen to Kuwait Energy Company KSC. The completion of the transaction is expected to take place around mid 2008.
“The likely sale of some of our Middle East/North Africa assets was signalled to the market in March, following the completion of our major strategic review,” managing director Peter Botten said.
“One of the main conclusions of the review was that, while the company had successfully built a valuable, diversified portfolio of assets in the Middle East/North Africa (MENA) region, a number of the licences were not material in the context of our growing gas portfolio.”
Oil Search said the sale of these assets will provide cash and reduce near term capital requirements. This will free up funds to facilitate the delivery of Oil Search’s share of the PNG LNG project.
In addition, it will enable the company to refocus its organic growth programme on areas of greater materiality going forward.
The company has retained a number of assets in Yemen, Libya, Tunisia and Kurdistan, Iraq.
Oil Search shares fell 22 cents to $4.99.
