Platts-

April 24, 2013

The sudden retirement of InterOil CEO Phil Mulacek is expected to accelerate the company's securing of a major joint venture partner for its Gulf LNG project in Papua New Guinea, analysts said Wednesday.



US-listed InterOil announced overnight that Mulacek, its founding CEO, would retire effective April 30 but would continue as a director, providing advisory services to the company. InterOil Chairman Gaylen Byker will assume Mulacek's duties from May 1 until a new CEO is appointed.



"While Mulacek's entrepreneurial drive succeeded in building a $4 billion energy company, he has been a sharply polarizing figure," Raymond James Equity Research analyst Pavel Molchanov said in a note. "We are of the view that at least some investors (and, presumably, prospective partners) have come to perceive him as an obstacle to a successful LNG partnership deal ... we look at the news as a positive development, a catalyst for an accelerated timeline towards a partnership announcement."



InterOil has an agreement with the PNG government to develop its Elk and Antelope gas fields to supply the proposed Gulf LNG project. The government approved InterOil's plans to develop the 3.8 million mt/year Gulf LNG project in November but has required that the company bring in a partner with a track record operating similar projects, both upstream and downstream.



Earlier this month InterOil said confidential negotiations with more than one bidder were ongoing. The interested parties are understood to be ExxonMobil, Shell and France's Total.



"We have made it clear in the past that there are at least two major oil companies involved in this process, and that was a true statement and remains true," InterOil Vice President Capital Markets Wayne Andrews said April 15, according to a transcript of an investor briefing. "This process is moving forward as planned.



"Now the PNG government is involved in the negotiations, and that should help us move forward and achieve FID [final investment decision]. These negotiations are complex and of such fundamental importance to InterOil and our future, that it is appropriate to conclude these in a methodical and thorough manner, and that is exactly what we are doing," Andrews added.



There are obvious synergies for ExxonMobil in securing a stake in InterOil's gas resources as the US major is currently constructing the $19 billion PNG LNG project near Port Moresby. The PNG LNG foundation project will comprise two trains with capacity to produce 6.9 million mt/year, but ExxonMobil is looking for additional gas to feed a third and possibly fourth train at the site. 



Meanwhile, Shell has been actively pursuing LNG opportunities through its Port Moresby office, opened in February 2012, and has a strategic alliance with PNG's state-owned Petromin, signed in August 2011. Under the terms of the Gulf LNG project approval, the state will eventually take a 50% stake in the Elk and Antelope fields.



Total has non-operating stakes in liquefaction plants in Qatar, the United Arab Emirates, Oman, Nigeria, Norway and Yemen. The French major is also a minority shareholder in the Ichthys and Gladstone LNG projects currently under construction in Australia.

'Tree' pid='21386' datel Wrote:

"Now the PNG government is involved in the negotiations, and that should help us move forward and achieve FID [final investment decision]. These negotiations are complex and of such fundamental importance to InterOil and our future, that it is appropriate to conclude these in a methodical and thorough manner, and that is exactly what we are doing," Andrews added.

Wonder if XOM and Shell were in the waiting room while TOT was greasing O'Neill's palm?