As per the deal, Oil Search will offer $40.25 for each InterOil share to acquire its assets in Papua New Guinea.
Additionally, Oil Search has signed a memorandum of understanding (MoU) with Total to divest 60% stake acquired from InterOil in PRL 15 and 62% of InterOil’s exploration assets.
Under the terms of the MoU, Oil Search and Total aim to maximize the value of the .9 million tons per annum (MTPA) Papua LNG project by reducing capital and operating cost with optimal resource utilization.
Oil Search said that the MoU will enhance its liquidity while driving long term alignment between the JV parties to deliver value for all stakeholders.
Oil Search managing director Peter Botten said: "This MoU, along with our proposed acquisition of InterOil, is a tangible step forward to optimising cooperation between PNG’s two world-class LNG projects, where we now have complementary significant interests.
"This has the potential to deliver capital efficient, high returning investments which is especially important in periods of low oil and gas prices."
The MoU, which is supported by the PNG Government, is subject to closing the InterOil acquisition.
In addition to focusing on development of Papua LNG Project, Oil Search and Total will pursue cooperation and/or integration opportunities with LNG Project.
Total chairman and CEO Patrick Pouyanné said: "In line with our strategy to hold significant interest when we are operator, we will increase our operated interest to a more material level to drive the future development of the Papua LNG project, a low cost onshore LNG project close to Asian markets.
"This aligned partnership paves the way to jointly working towards optimizing the monetization of these resources, including by actively seeking opportunities for collaboration and/or integration with the existing PNG LNG Project, for the benefit of all stakeholders."
