Papua New Guinea’s Independent Consumer and Competition Commission is set for a busy few months, as the country looks set for a higher-than-usual level of mergers-and-acquisitions activity. Beyond M&A, there are other developments for investors to look forward to as well.

The PNG LNG project: one of the jewels “in the crown” of Santos’ portfolio, according to its Chairman, Keith Spence. Credit: Santos

This is a busy period for Papua New Guinea’s Independent Consumer and Competition Commission (ICCC), which is currently considering all the submissions made to it in regards to state-owned Ok Tedi Mining Limited’s (OTML’s) acquisition of Kingston Resource’s Misima gold project in Milne Bay Province.

OTML’s majority shareholder, Kumul Minerals Holdings, has also been open about plans to buy into other mining projects, and recently signed a Memorandum of Understanding to purchase 20 per cent of St Barbara’s Simberi gold mine.

And then there’s the pursuit of Santos by a consortium led by Abu Dhabi National Oil Company subsidiary XRG P.J.S.C. (which also includes the Abu Dhabi Development Holding Company and private equity investment firm Carlyle).

The XRG Consortium’s attractive US$18.7 billion bid (or “non-binding indicative proposal”) for Santos, received on 13 June, has already been welcomed enthusiastically by Santos’ board, which “intends to unanimously recommend that Santos shareholders vote in favour of the potential transaction” unless a better offer is received.

This bid has implications for PNG. Santos’ PNG assets were described by Chairman Keith Spence at its April annual general meeting as “the jewel in the crown of the Santos portfolio.”

It currently owns 39.9 per cent of PNG’s only productive gas project, PNG LNG, and has plans to connect its own Agogo gas field to the project in coming years. It is also a 22.83 per cent venture partner in the TotalEnergies-led Papua LNG project, which is set for a final investment decision by year-end.

Whether XRG also views these as jewels is not known, nor has it specified publicly any plans for Santos’ PNG assets should its bid be successful.

What is clear is that PNG’s ICCC will have play a role in determining the success of XRG’s bid should Santos’ shareholders accept it, and it will also play its legislated role in considering the others above.

Notably, the ICCC has some recent form and experience in resources M&As, having approved both Newmont Corporation’s acquisition of Newcrest Mining and Kumul Petroleum Holdings’ purchase of a 2.6 per cent stake in the PNG LNG project from Santos, both in 2023, as well as the 2021 merger of Santos and Oil Search Limited.

What’s driving this activity?

XRG’s move is relatively straightforward to understand. With LNG seen as the key transition fuel as the world economy moves away from oil and coal and towards renewable energy by the middle of the century, the cashed-up XRG – which already has an asset portfolio worth around US$80 billion – has a stated aim of becoming one of the world’s top five gas and LNG producers by 2035.

Its acquisition of Santos, should it occur, will clearly expand its gas portfolio substantially.

Closer to home, Kumul Minerals’ moves can be seen as part of its strategy to both increase national participation in PNG’s existing mining projects and also to play a role in encouraging the development of new projects. (Notably, for all the exploration leases issued in PNG, the last new greenfield mine to open in PNG was Metallurgical Corporation of China’s Ramu nickel and cobalt mine in 2012.)

Local listings

Santos is also, of course, currently listed on PNG’s stock exchange, PNGX, and many Papua New Guineans own Santos shares, as a legacy of its merger with Oil Search Limited in 2021. Therefore, PNG’s Securities Commission is also likely to be involved in reviewing any transaction. A Santos de-listing would have a major impact on the total market capitalisation of the local bourse.

While this is a potential risk to PNG’s capital markets, we are also hearing more positive rumours of opportunities for investors around the listing of some of PNG’s state-owned enterprises (SOEs), and the issuance of PNG’s first green bond.

These and related topics will be high on the agenda at the 2025 Business Advantage PNG Investment Conference, taking place in Brisbane on 11 and 12 August.

Participants will include the ICCC’s Commissioner Paulus Ain, Securities Commissioner James Joshua and the Managing Director of Kumul Consolidated Holdings, Professor David Kavanamur, who is responsible for PNG’s SOEs. We’ll also be hearing about Kumul Minerals’ expansion plans from its MD, Sarimu Kanu.

You’re invited to be in the room when the discussions start. Registrations are now open for PNG’s premier investment promotion event, now in its 13th year, at https://pnginvestmentconference.com/.