The share price of Oil Search Limited (ASX: OSH) dropped 7% after the news about the P'nyang update.
The Prime Minister of Papua New Guinea announced on 31 January 2020 that negotiations on the P'nyang Gas Agreement have stopped at this stage to allow the Government to concentrate on developments already in the pipeline.
A series of negotiations have taken place over the last seven months, but it wasn't possible to find the appropriate balance of value and benefits for the project to be "investable and bankable" for the joint venture partners. Oil Search said that the project returns under the State's proposed terms were approximately the same as its cost of capital, on an unrisked basis.
Oil Search will continue the dialogue on the P'nyang field to try to find the right balance, but the company will be focusing on developing the Papua LNG Porject as well as the exploration and development of its Alaskan assets.
