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

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Energy Shares

Why is the Beach Energy share price racing higher on Thursday?

This energy producer delivered some big news this afternoon.

Read more »

A person is weighed down by a huge stack of coins, they have received a big dividend payout.
Energy Shares

Own Ampol shares? Get ready for your monster dividend payment

Ampol investors are about to enjoy their largest-ever dividend.

Read more »

A man sees some good news on his phone and gives a little cheer.
Energy Shares

Buy Woodside shares for a 20% gain and 4.5% dividend yield

Morgans thinks investors could get big returns from this energy giant.

Read more »

Woman holding $50 notes and smiling.
Dividend Investing

A 36% yield from this ASX dividend share? Here's how these forward-looking investors made it happen

Some savvy passive income investors are earning a 36% yield from this ASX dividend star.

Read more »

A Paladin Energy miner wearing a hard hat and protective gear stands in front of a large mining truck and smiles to the camera.
Energy Shares

Uranium is set to boom, and this is the 'premium' ASX stock to buy

Shaw and Partners' Jed Richards reckons these are the shares to buy for the nuclear energy theme.

Read more »

Happy coal miner.
Energy Shares

How these ASX 200 energy shares could unexpectedly burn brighter

ASX 200 energy shares are facing rising global demand for their products.

Read more »

Worker inspecting oil and gas pipeline.
Energy Shares

ASX energy shares losing charge amid fresh warnings of gas supply shortfalls

Many energy commodity prices fell overnight and this is hitting ASX energy shares today.

Read more »

A miner stands in front oh an excavator at a mine site
Energy Shares

'We have reached a bottom': 5 ASX uranium shares leaping higher this week

ASX uranium stocks have enjoyed explosive share price growth over the past year.

Read more »