ALEXIS FLYNN | Dow Jones Newswires

ROYAL DUTCH SHELL is in talks with liquefied natural gas producer InterOil Corp that could lead to the Anglo-Dutch energy giant buying into Papua New Guinea exploration license areas.

"We have been in talks with InterOil and other interested parties, but we can't say where [they are] going," said chief financial officer Simon Henry.

InterOil holds three prospecting licenses in PNG, where early appraisal drilling has revealed vast natural gas reservoirs are located.

InterOil also plans to build a 9 million metric ton a year LNG terminal but will need partners to help cover some of the estimated $6 billion required.

It is currently soliciting interest in the sale of a 25% stake in the LNG project.

Shell Chief Executive Peter Voser skirted a question on whether Shell was preparing a takeover bid for InterOil.

"It's an interesting play there," said Mr. Voser. "We have talked to the government, we are looking at it.”

"At the end, it will be profitability driven. It will be: Can we do a project in a safe and reliable way, and will it deliver the performance? I think to answer that question, it is too early for that," said Mr. Voser.