The PNG petroleum minister has stated the government intends to honour the existing Papua LNG gas agreement.
This follows a letter provided by operator Total which agrees to meet the government on a number of conditions such as a national content plan and open access of the Papua LNG pipeline for third-party gas.
In the short term Citi believes Oil Search can outperform on de-risking of LNG expansion but remains cautious about LNG exposure. Neutral rating and $6.97 target maintained.
Target price is $6.97.Current Price is $6.68. Difference: $0.29 – (brackets indicate current price is over target). If OSH meets the Citi target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).