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 female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles as the Whitehaven Coal share price rises today
Share Gainers

The Coronado Global share price just surged to a 114% weekly gain. Here's why

Investors have sent the ASX coal stock flying higher in June. But why?

Read more »

Worker inspecting oil and gas pipeline.
Dividend Investing

Should I buy Woodside shares today for their 8% dividend yield?

With an 8% dividend yield and a resurgent share price, should I buy Woodside shares right now?

Read more »

Happy coal miner.
Share Gainers

Up 75% this week, why is this ASX All Ords stock rocketing again today?

Investors are piling into this ASX 300 stock on Wednesday. But why?

Read more »

Man pointing at a blue rising share price graph.
Share Gainers

Guess which ASX 300 stock just rocketed 43% on big news!

Investors are piling into this ASX 300 stock on Wednesday. But why?

Read more »

A male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plant
Energy Shares

4 reasons to buy Santos shares right now

A leading expert forecasts Santos shares and dividends are set to grow. But why?

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX 200 stock has rocketed 86% since April?

This sky rocketing ASX 200 stock continues to defy short sellers. But how?

Read more »

A miner in visibility gear and hard hat looks seriously at an iPad device in a field where oil mining equipment is visible in the background.
Energy Shares

4 ASX 200 energy shares making big moves today as OPEC's oil production set to surge

ASX energy shares, including Woodside and Santos, are making big moves today. But not all in the same direction.

Read more »

Worker on a laptop at an oil and gas pipeline.
Energy Shares

Woodside share price charging higher on North West Shelf approval

Woodside has been working more than six years to gain an extension for its North West Shelf gas project.

Read more »