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+--- Thread: New Upstreamonline article on IOC’s deal with XOM (/showthread.php?tid=4182)
RE: New Upstreamonline article on IOC’s deal with XOM - sydbod - 07-17-2013
'jft310' pid='25817' datel Wrote:....,Exxon states 2 T's at P'nyang which is not enough NG for a new 3 rd train .........
Thanks for that correction. 
I have been trying on several occasions to crosscheck OSH data with Exxon data, but have never managed to find where this sort of information is available from Exxon. (could never find any usefull information from their investor area)
Could you possibly direct me to where this sort of information is available from Exxon please, it would be greatly appreciated.
RE: New Upstreamonline article on IOC’s deal with XOM - jft310 - 07-17-2013
All Interoil presses are approved by Exxon as regards the deal. Heres the latest story
Wednesday, 17 July 2013
RECENTLY appointed InterOil chief executive officer Michael Hession reportedly says negotiations with PNG LNG project operator ExxonMobil are “moving along nicely”.
The PNG LNG joint venture's logo
“I’m not disturbed in any way, shape or form,” Hession said in an interview with Bloomberg.
“I’d emphasise that Exxon and this negotiation are going to be my number one priority.”
ExxonMobil remains in exclusive negotiations over acquiring at least a 4.6 trillion cubic feet of natural gas slice of InterOil’s Elk-Antelope discoveries to underpin a****** third train expansion of the PNG LNG.*****
It’s not yet clear what development path InterOil and the PNG government will pursue with the rest of the field in licence PRL 15 – with GLJ Petroleum Consultant’s best-case estimate given at 9.07Tcf of initial recoverable sales gas.
ExxonMobil was selected as the preferred bidder over other supermajors and its 60-day exclusive period of negotiations with InterOil expires next week, providing it is not extended.
RE: New Upstreamonline article on IOC’s deal with XOM - jft310 - 07-17-2013
sydbod
Slide 14 of the new Oil Search slides
PRL 3 JV (OSH 38.5%, ExxonMobil 49.0%, JX Nippon 12.5%) concept selection studies expected to
be finalised in 2013
*****Oil Search estimates total 2C gas resources in P’nyang field of 2.5 – 3.0 tcf*****
Additional seismic in PRL 3 underway, to support potential development
To maintain PRL 3, produc
Even Oil Search admits they are estimating the quantity of NG at P'nyang. See above. Their NG is not certified nor in sufficient quantity for an Exxon third train.Exxon is negotiating with IOC for the third train because IOC has certified NG assets from 3 resource estimating firms vs a possible 2 T's with OSH. Again Exxon will not send billions for possible NG .They will send billions for Certified NG that IOC has proven out.
RE: New Upstreamonline article on IOC’s deal with XOM - sydbod - 07-18-2013
Thanks for that jft310.
I keep looking through various OSH PDFs and they keep suggesting that they would be the source for train3 with a 50% feed from P'nyang (2.5tcf of gas required) and the other 50% from Hides with comments like (taken from last Annual Report)
"In addition to the P’nyang resource,
potential gas upside exists within the
existing Project gas fields. This may be
unlocked through the drilling of Project
development wells. In particular, the
Hides produced water disposal well will
help in better defining the gas-water
contact in the field. Recent modelling of
the gas which exists within the oil fields
has also identified further gas resource
potential in these fields."
It appears the maximum boundaries of Hides has not yet been established fully.
But you are correct, they are not 1P reserves.
RE: New Upstreamonline article on IOC’s deal with XOM - Tree - 07-18-2013
'sydbod' pid='25845' datel Wrote:Thanks for that jft310. I keep looking through various OSH PDFs and they keep suggesting that they would be the source for train3 with a 50% feed from P'nyang (2.5tcf of gas required) and the other 50% from Hides with comments like (taken from last Annual Report) "In addition to the P’nyang resource, potential gas upside exists within the existing Project gas fields. This may be unlocked through the drilling of Project development wells. In particular, the Hides produced water disposal well will help in better defining the gas-water contact in the field. Recent modelling of the gas which exists within the oil fields has also identified further gas resource potential in these fields." It appears the maximum boundaries of Hides has not yet been established fully. But you are correct, they are not 1P reserves.
syd, this is not difficult.
At the time of the annual report, XOM was a bidder for E/A gas they intended on using for PNG LNG expansion. Why? Because E/A gas, as we have highlighted for years, was 1/11 the cost of XOM's own gas from Hides. Also, further drilling is needed for Hides and P'nyang delineation. Note word 'potential'.
Now XOM is tying up at least 4.6Ts from IOC and that will be for their expansion. Maybe someday more gas from Hides will be used, but not now. It costs too much today.
RE: New Upstreamonline article on IOC’s deal with XOM - sydbod - 07-18-2013
Tree, I appreciate what you are saying.
I was just highlighting how there is so much confusing information out there and even what we can glean from the web is not always that relevant.
You have to remember, my background has been over 2 decades as a share holder in OSH (when they were around 25c) and only very very recently a new shareholder in IOC.
I don't have all the background dealing with IOC yet and probably wont have for some significant time.
By the way, I hope you meant to say " Because E/A gas, as we have highlighted for years, was 1/11 the cost to IOC compared to the cost of XOM's own gas from Hides"
RE: New Upstreamonline article on IOC’s deal with XOM - Tree - 07-18-2013
'sydbod' pid='25848' datel Wrote:Tree, I appreciate what you are saying. I was just highlighting how there is so much confusing information out there and even what we can glean from the web is not always that relevant. You have to remember, my background has been over 2 decades as a share holder in OSH (when they were around 25c) and only very very recently a new shareholder in IOC. I don't have all the background dealing with IOC yet and probably wont have for some significant time. By the way, I hope you meant to say " Because E/A gas, as we have highlighted for years, was 1/11 the cost to IOC compared to the cost of XOM's own gas from Hides"
syd - confusing is the standard, does not need highlight. Hope people don't mind attempts by the volunteers here in keeping facts straight. Makes sense if XOM didn't need IOC gas then they would not have bid and certainly would not have been the highest bidder!
I meant what I wrote and you re-wrote it saying the same thing, so we agree on that. Read the SHU archives, there is much to learn there.
RE: New Upstreamonline article on IOC’s deal with XOM - Getitrt2 - 07-18-2013
The cost of additional gas from OSH is a definite factor. However, it is also important to realize, as jft alludes to, that additional potential gas from Hides, and all the gas from P'nyang, is estimates for existing and future wells from OSH. NONE of it is certified estimates from third party resource engineers. There is apparently very low certainty at this point of their even having enough gas for a third train in time or at all. It would be more economical and profitable for XOM to build trains 3 and 4 together if things go well enough for OSH, in which case whether it's for 3 or 4 I guess could be regarded as semantics; but with PRL 15 gas secured, at least XOM could be sure of being able to proceed with train 3, and could possibly access PRL 15 and/or other IOC prospects as an alternative for train 4. Back on May 24 with the PR on the XOM negotiations, Morgan Stanley referred to "the sale of gas that will underpin a 3rd train at XOM's...", although that detail was not in IOC's PR, and I think IOC is looking at it that way.
RE: New Upstreamonline article on IOC’s deal with XOM - Tree - 07-18-2013
'Getitrt2' pid='25853' datel Wrote:The cost of additional gas from OSH is a definite factor. However, it is also important to realize, as jft alludes to, that additional potential gas from Hides, and all the gas from P'nyang, is estimates for existing and future wells from OSH. NONE of it is certified estimates from third party resource engineers. There is apparently very low certainty at this point of their even having enough gas for a third train in time or at all. It would be more economical and profitable for XOM to build trains 3 and 4 together if things go well enough for OSH, in which case whether it's for 3 or 4 I guess could be regarded as semantics; but with PRL 15 gas secured, at least XOM could be sure of being able to proceed with train 3, and could possibly access PRL 15 and/or other IOC prospects as an alternative for train 4. Back on May 24 with the PR on the XOM negotiations, Morgan Stanley referred to "the sale of gas that will underpin a 3rd train at XOM's...", although that detail was not in IOC's PR, and I think IOC is looking at it that way.
Wood Mackenzie wasn't ambiguous about XOM's feed options and plans. $100 million/well drilling in Hides?
|
* FEED studies for PNG LNG expansion trains were expected to begin in late 2013, though the source of expansion feedgas is still to be determined. The potential inclusion of E/A gas to the project may change the scope of these provisions. * The lowest cost and simplest option for expansion trains is Hides field, part of PNG LNG project......BUT, (Hides) needs further appraisal to confirm reserves upside. * An alternative is the remote and higher-cost P'nyang field, which is NOT part of the PNG LNG project and needs a gas sales or unitisation agreement between partners * An IOC/XOM tie up would introduce a third supply option for train#3, or allow an accelerated timetable for train#4 * Economics of scale could be achieved by buiding trains #3 and #4 concurrently, while E/A deal would delay the need for further high cost exploration to find gas for those trains. * Exploration wells in the highlands of PNG are amongst the most expensive onshore wells in the world at upwards of $100 million. * XOM has a number of options to bring E/A gas into PNG LNG, these include: 1) Revised unitisation agreement with XOM increasing it's interest in the project 2) Existing unitisation extended to cover E/A, with the partners reimbursing XOM 3) Tolling agreement, where XOM pays a fee to liquefy E/A gas through PNG LNG * These options would allow all partners to benefit from expanding the existing project. However, the level of reward available may depend on each partner's ability to commit to the sizeable investment required to expand the project. * PNG LNG expansion appears to be XOM highest LNG priority. Perhaps more than Gorgon expansion, Scarborough FLNG, NA shale plays, far eastern Russia and East Africa |
RE: New Upstreamonline article on IOC’s deal with XOM - ArtM72 - 07-18-2013
This entire argument becomes somewhat more constrained if you accept at face value Jasper's comment the pipeline can handle three units and a second pipeline will be necessary for four. To me that makes EA the third train source with the decision on 4th and beyond pending the results of future drilling.