State banks on ExxonMobil

Main Stories

By GYNNIE KERO

THE Government is confident that ExxonMobil will deliver a significant impact on resource development, third party access, pipeline, liquefaction plants, plus the shipping and regasification terminal.
Petroleum and Energy Minister Nixon Duban, pictured, said this yesterday while congratulating ExxonMobil for finally concluding the acquisition of InterOil in a K7.9 billion (US$2.5 billion) deal.
He said the Supreme Court of Yukon’s decision would now enable ExxonMobil to create value for the shareholders of both companies and the people of Papua New Guinea by increasing its position in the liquefied natural gas business through a diverse asset base and strong dividend stream.
“Although there may be certain issues raised on competition (currently being investigated by the Independent Consumer and Competition Commission), I am sure our Government sits in a very comfortable position to exercise its participating equity of 22.5 per cent under the Oil and Gas Act,” Duban said.
“From experience, we are very sure that the bulk of the gas will be exported through a forward contract and we have already announced the operator of Papua LNG (French oil and gas company Total SA).
“This will mean that before we sign any new agreement, the State will have to carefully look into the issues of domestic market obligation and local content.
“As the Government, we will also push for the Gas Template Agreement to be properly concluded with more focus on the fiscal terms.”
Duban noted that the upcoming inaugural Petroleum and Energy Summit in Port Moresby would be a benchmark for policy review and a comprehensive audit of Papua New Guinea’s involvement in the industry.
“I call on the Chamber of Mining and Petroleum to work with the department to immediately start the transformation of the department to an authority as the key step,” he said.
“As the Government, we have no issues over independent commercial transactions that are geared towards cushioning current market conditions and associated trends.
“Acquisitions, mergers and amalgamations are normal business practices and we stand ready as the Government to work with all our investment partners.”