By Ross Verne
TOTAL Asia Pacific vice president Jean-Marie Guillermou could not resist taking a gentle swipe at Oil Search following the completion of arbitration hearings between the two companies in November.
Mr Guillermou was outlining progress on the proposed Elk-Antelope LNG project when he used a rugby metaphor to criticise Oil Search’s contestation of Total’s purchase of a stake in the fields.
Total bought a 40.1% stake in the fields from InterOil in March, causing Oil Search to challenge the legitimacy of the deal, claiming it had pre-emptive rights to purchase the share.
Arbitration to determine the legitimacy of the deal was carried out in November and a decision is expected in early 2015.
“When you are on a rugby field with your team mates you can regret not playing football and not playing with other partners,” Mr Guillermou told the 13th PNG Mining and Petroleum Investment Conference.
“You can also even go to arbitration to try and change them and play another game.”
Mr Guillermou implored Oil Search to “quickly join the scrum and push in the same direction as all the others”.
“But partnership does not mean disorder – there is a time for challenge, there is a time for action,” he said.
“After a while what is important is the match.
“I know that Total has a supporter of the government of PNG in this respect and I wish to thank them publicly for their stance.”
Oil Search managing director Peter Botten said the company sought to have the deal cancelled because it believed the terms were invalid.
“Our view is that the transfer of interest from InterOil to Total did not abide by the joint operating agreement and we’ve gone to arbitration to establish whether we’re right or not.”
When asked about suggestions from analysts from Hong Kong-based Bernstein Research that Oil Search wanted to replace Total with PNG LNG partner ExxonMobil in the project, Mr Botten did not give much away.
“When you go into a 20-year relationship you want to go in with a well-established rule book and that you’re working harmoniously in a proper joint venture,” he said.
Guillermou said the project would only be feasilble “with Total in the driver’s seat”.
“The future of the partnership is in Total’s DNA, first to share risk but also to be challenged in order to make robust choices and the best possible decisions,” he said.
When asked if the arbitration would damage the companies’ ability to work together on future projects, Mr Botten said partnerships would continue to be important.
“In this sort of market… it also requires us to work smarter by sharing facilities, sharing contracts, sharing core infrastructure,” he said.
“The reality of life is we actually have to work together to make sure were efficient and were not wasting capital.”
Mr Guillermou was more sceptical about opportunities for cooperation between the two parties, making a barely-veiled reference to the arbitration proceedings.
“Synergy is like dancing the tango – you need to be two, each one deciding what you can share or not, what they are ready to share or not,” he said.
“What is the mutual interest you want to make or not and what is your mutual interest in working together?
“Many people are talking about synergies and I want to let you know that Total has nothing against synergy.
“We love synergy but before talking about synergy you need to define exactly what you want and what you are ready to share.”