IPIC buys $1.1bn stake in Oil Search

STAKE PURCHASED: IPIC has bought 17.6 percent of Oil Search. (Getty Images)

Abu Dhabi's International Petroleum Investment Co. (IPIC) has purchased a 17.6 percent stake, worth A$1.68 billion ($1.07 billion) in Oil Search, the company said on Tuesday.

IPIC and the Papua New Guinea government, through its nominee, Independent Public Business Corp. (IPBC) have signed the agreement with Oil Search, an IPIC statement said.

The acquisition is structured by way of a five-year exchangeable bond issue, the statement said.

"This strategic investment provides IPIC with material exposure to a significant near-term LNG project in Asia-Pacific, the PNG LNG Project operated by ExxonMobil," the statement said.

Oil Search operates all of the oil and gas producing fields in Papua New Guinea and has a 34 percent interest in the PNG LNG Project.

The PNG LNG Project is currently undertaking the front-end engineering design, securing LNG sales and project financing.

The preliminary schedule indicates a final investment decision in late 2009 with a target to supply the first LNG cargo sometime between 2013 to 2014.

IPIC holds equity stakes in South Korea's Hyundai Oilbank, Gulf Energy Maritime in Dubai, CEPSA in Spain, Borealis and OMV in Austria, Oman Polypropylene in the sultanate of Oman, PARCO Refinery in Pakistan, SUMED Co. in Egypt, Energia De Portugal in Portugal and COSMO Oil in Japan. (Reuters)

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