Oil Search fights sale of PNG gas field stake to France's Total

MELBOURNE Thu Mar 27, 2014 8:12pm EDT

The logo of French oil company Total is pictured during the company's 2012 annual result presentation in Paris February 13, 2013. REUTERS/Philippe Wojazer

The logo of French oil company Total is pictured during the company's 2012 annual result presentation in Paris February 13, 2013.

Credit: Reuters/Philippe Wojazer

MELBOURNE (Reuters) - Oil Search Ltd launched a legal fight on Friday contesting French oil giant Total SA's purchase of a 40 percent stake in Papua New Guinea's biggest undeveloped gas field.

Oil Search recently bought a 23 percent stake in the Elk and Antelope fields, controlled by another PNG company, InterOil Corp, which this week signed a final agreement selling down its stake to Total.

Oil Search said on Friday it had filed a notice of dispute to InterOil regarding Total's acquisition. The company's investor relations head was not immediately available to comment on the grounds for the dispute.

After buying into the fields, Oil Search had expected to have pre-emptive rights over the stake being sold to Total. The PNG oil and gas producer is hoping to hold sway over how the fields are developed.

Oil Search wants the Elk-Antelope gas to supply an expansion of the $19 billion PNG LNG project, led by ExxonMobil Corp, while InterOil and Total want to build a competing standalone LNG project.

Oil Search is a 29 percent stakeholder in the PNG LNG project, which is due to start exporting around July.

(Reporting by Sonali Paul; Editing by Stephen Coates)