Oil Search Ltd. said it wouldn't counter an offer made for a rival tied to liquefied natural gas assets in Papua New Guinea following a bidding war.

"Given the decision by Exxon Mobil to make an offer for InterOil on the terms it has announced, we do not believe it is in the best interests of our shareholders for Oil Search to submit a revised offer to acquire InterOil," Oil Search Managing Director Peter Botten said in a statement.

Exxon countered a bid from Oil Search, backed by French energy company Total, with a $2.2 billion offer for InterOil. Total this week said it would analyze the competing offer, noting it viewed the initial bid by Oil Search as fair.

Exxon offered a set payment for each trillion cubic foot equivalent of resources in the Elk-Antelope basin in Papua New Guinea, subject to a cap of 10 trillion cubic feet equivalent. A liquefied natural gas project in Papua New Guinea, led by Exxon Mobil, marked a milestone with its 100th delivery last year. More than 7 million tons of LNG have been shipped from the facility since it opened two years ago.

Oil Search holds a key stake in Papua New Guinea's liquefied natural gas sector and touted itself as a company with a potential for capital and resource growth.

"Considerable work remains to be done by all stakeholders to realize these opportunities, but the entry of ExxonMobil into Papua LNG would be a material step forward," Botten said

Total had said it was clear some level of sector coordination was needed to move the LNG effort forward.

The offer from Exxon comes as energy companies re-evaluate their strategies with crude oil prices holding in the upper $40 per barrel range. Rivals from Royal Dutch Shell to Schlumberger have acquired smaller rivals in an effort to streamline capital in the weakened oil economy.