Exxon in talks with InterOil

Main Stories, National

The National, Monday 27th May 2013

 THE developer of PNG LNG, ExxonMobil, is in exclusive talks with InterOil as a potential partner to develop its Elk and Antelope gas reservoirs in Gulf.

Should the negotiations bear fruit, Gulf gas will be provide additional trains to the PNG LNG project, expand the Port Moresby processing plant and extend the project life from current 30 years to beyond 50 years.

Prime Minister Peter O’Neill last Friday announced to Parliament the decision by InterOil to start talks with ExxonMobil.

 “This is an important announcement for the development of these assets, and I’m certain all stakeholders will welcome this,” O’Neill said in a statement yesterday.

“As a stakeholder, the government is pleased that InterOil and its partners are taking the next significant step towards the development of our vast natural gas resource.

“When the full potential of the gas reservoirs in the Gulf province are realised, PNG will have in place a stable revenue flow from these resources for the next 30 to 50 years,” O’Neill said.

InterOil announced last Friday that it had entered into an “exclusive negotiations” with ExxonMobil to develop the Elk and Antelope fields.

O’Neill told Parliament the exclusive negotiations would run for 60 days after which a decision was expected on whether or not a deal was reached would be announced.

InterOil advised the prime minister of the steps it was taking before it advised the market (stock exchange) last Friday (PNG time).

The prime minister told a gathering last Friday evening that the potential entry of ExxonMobil to those assets in Gulf could significantly lift production at the PNG LNG processing facility outside Port Moresby.

“At the moment we are building two trains (or processing units) at the processing site for gas from the Hela and Southern Highlands provinces. The revenue from the export of LNG from these two trains would double the size of our economy (GDP).

“If the talks are successful and ExxonMobil gains access to gas from Elk and Antelope, we will certainly add one, possible two, more trains, and our GDP would triple in size.

“This means PNG will have a stable revenue flow from its gas resources for the next 50 years or so.”

 He said with global LNG demand estimated by market experts to rise to 500 tonnes a year by 2025, his government had worked hard to ensure PNG benefits fully by promoting PNG as a stable supplier of natural gas in a stable political environment with a robustly growing economy.

He recently travelled to China and Japan, where PNG gas’ big buyers are located, to meet heads of governments there and held talks with investors seeking to enter and develop PNG’s vast natural resources potential.

He is planning to travel to Indonesia next month and later to South Korea, Malaysia and Singapore.

“I’m pleased that oil and gas global majors like ExxonMobil and Total see PNG as a stable supplier of energy (gas) to the world market.

“ Their long term investment here is proof of that.

“As a government, we will continue to provide a stable political climate, a fair tax regime, and sound development policies so that our people fully benefit from the development of these resources,” he said.