Oil Search (ASX:OSH) share price sliding amid fresh merger concerns

We take a look at what the PNG government has to say about the proposed merger with Santos.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Oil Search Ltd (ASX: OSH) share price is sliding, down 1.3% in afternoon trade to $3.93 per share.

This comes as news breaks that Papua New Guinea may yet derail the company's proposed $21 billion merger with ASX energy heavyweight Santos Ltd (ASX: STO).

As the Australian Financial Review reports, PNG's Prime Minister James Marape has said that any merger would have to be in his nation's best interests.

A fly in the merger ointment

PNG-based Oil Search needs the agreement of the Marape Government for its merger with Santos to move forward.

According to Marape:

Oil Search Limited is a prominent PNG company whose activities comprise a significant percentage of PNG's GDP and provide the livelihood to thousands of Papua New Guineans both directly and indirectly. Any proposed merger must satisfy the national interest test…

We do not wish for the largest oil and gas company operating in our country to simply be a branch office of a foreign company. It is important that while maintaining a strictly commercial focus, the interests of all employees, contractors and service providers are given the highest priority.

In a sign that the PNG government could be manoeuvring for a better outcome for itself and the nation's domestic oil and gas projects, Marape said, "I strongly recognise that the merger of these two important license players in the market can deliver higher capacity and value to our projects".

Investors will be keeping a keen eye on the Oil Search share price as this plays out over the coming weeks.

Oil Search share price snapshot

The Oil Search share price has gained 28% over the past 12 months. This surpasses the 24% gains posted by the S&P/ASX 200 Index (ASX: XJO).

Year-to-date, the Oil Search share price has underperformed the benchmark, up 4.25% in 2021.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Energy Shares

Crude oil barrels rocketing.
Energy Shares

The Santos share price is in the spotlight this week. Here's why

Here's why everyone is buying into Santos shares at the moment.

Read more »

Two IT professionals walk along a wall of mainframes in a data centre discussing various things
Energy Shares

Gas producer or data centre company? Why is this ASX energy share up 16%

This company has made an interesting move into technology.

Read more »

Rocket going up above mountains, symbolising a record high.
Energy Shares

Up 1,511% in a year, guess which ASX uranium share is storming higher again on Wednesday

Investors are piling into this surging ASX uranium stock again today. But why?

Read more »

Oil worker using a smartphone in front of an oil rig.
Energy Shares

Beach Energy posts steady Q4 production and a resilient outlook

The energy producer has released its eagerly anticipated quarterly update.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Energy Shares

Paladin Energy sets FY2027 Langer Heinrich uranium guidance

The uranium producer has revealed its expectations for FY 2027.

Read more »

Lakes in the form of footsteps among the green trees, indicating steps towards a healthier planet.
Energy Shares

Mercury NZ trading margin jumps 33% as renewables drive Q4 result

Mercury NZ delivered a strong Q4 with trading margin up 33% and progress in renewable energy projects.

Read more »

A service station attendant crosses his arms and smiles towards the camera with a backdrop of petrol bowsers and a drive-through facility.
Energy Shares

Ampol shares rallied 40% to hit fresh 2-year high. Buy, sell or hold?

The fuel distributor and retailer's shares have stormed higher over the past year.

Read more »

A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles.
Broker Notes

Up 20%, are Yancoal shares still a good buy right now?

A leading analyst provides his forecast for Yancoal’s outperforming shares.

Read more »