Oil Search Ltd., Papua New Guinea’s biggest oil and gas producer, rose the most in more than two months after signing an accord with Total SA to explore for natural gas in the Gulf of Papua.
The stock climbed 3.2 percent to A$7.78 at the close in Sydney, its biggest gain since July 19. The benchmark index added 0.5 percent.
Oil Search, partner in a $15.7 billion liquefied natural gas venture in Papua New Guinea led by Exxon Mobil Corp., is looking to develop fields that may underpin a second LNG project in the Pacific nation. The deal is the first foray by Total, Europe’s third-largest oil company, into exploration and production in Papua New Guinea, Oil Search said in a statement today.
The two companies will hold equal stakes in five licenses in the gulf and form a partnership to look at other licenses in the Pacific nation, excluding the Highlands region. An offshore drilling program is expected to start in the first quarter of 2013, according to Oil Search’s statement.
Total would develop and operate the downstream plants should drilling lead to the approval of an LNG project, Oil Search said. The agreement depends on conditions including approval from Papua New Guinea’s minister for petroleum and energy.