Aussie eyes PNG deal with ExxonMobil

AUSTRALIAN billionaire Clive Palmer has told the Australian Financial Review he is considering a farm-out offer from ExxonMobil for exploration leases his company, Chinampa Exploration, holds in the northern part of the Gulf of Papua.
Palmer said he was first approached by ExxonMobil in 2010 and that he had held further discussions with the world’s biggest oil and gas corporation late last year.
“We do not want to make a hasty decision. But we are either going to develop it, joint venture it or do a deal with the Chinese,” he told the AFR, adding that Chinampa held exploration leases covering more than 48,000sqkm in PNG.
He said Chinampa had already spent A$40 million on exploration but needed significant funding to meet high exploration costs.
Palmer also told the AFR the PNG exploration project “could be bigger than the North West Shelf – it is the most significant thing we are doing at the moment”.
The North West Shelf operations of Woodside Petroleum was Australia’s first LNG project and Australia’s largest such operation to date.
 Palmer noted that ExxonMobil was currently building a US$16 billion LNG project in Papua New Guinea and “our gas (site) is right opposite that”.
ExxonMobil spokeswoman Rebecca Arnold told the AFR it was not the company’s policy to comment on commercial matters.
Palmer said ExxonMobil had made a “standing offer” and his group was thinking about it.
The report said Chinampa had three exploration licences in shallow to deep water close to the planned LNG plant at Port Moresby.
According to the company’s website it held a 100% interest in PPL 379, PPL 380 and PPL 381 in the Gulf area.
The AFR indicated Palmer had good political connections in PNG, having spoken at a fund raising dinner for the United Resources Party in June last year.
Describing PNG as “the promised land”, Palmer said: “If we find gas, we develop it and make billions of dollars out of it. First we are looking at reserves, then the cost of extracting, but it looks very promising.”
He said preliminary work carried out by his company had indicated the area had the potential to contain 22 trillion cubic feet of gas or about double the amount being developed by ExxonMobil in PNG for the country’s first LNG project.