Nice

"Total hails Oil Search as perfect PNG partner

FRENCH oil giant Total has welcomed Oil Search's involvement in Papua New Guinea's Elk and Antelope gas fields as bringing in "the strategic partner we were looking for".

Total has not ruled out processing the gas at ExxonMobil's $US19 billion ($21.24bn) PNG LNG plant, in which Oil Search has a stake, after having previously said it was targeting a stand-alone plant.

Oil Search last week grabbed itself a strong negotiating position in PNG's biggest undeveloped gas resource by edging out Elk and Antelope operator InterOil in a $US900 million deal to buy out minority stakeholders.

In doing so, managing director Peter Botten has breached a condition in a deal Total had to acquire a 61 per cent stake in the field from InterOil, reduced InterOil's desired stake and acquired pre-emptive rights to purchase Total's stake.

Total welcomed Oil Search's entry into the project.

As revealed in The Australian on Saturday, Oil Search had been working on a side deal to acquire some of Total's stake in another deal that would have seen InterOil buy out the minority stakeholders, a Swiss-based group of companies known as Pac LNG.

But when InterOil's deal with Pac LNG fell over, Oil Search changed tack and grabbed a 23 per cent stake in the project to give it a lot more power at the bargaining table.

"Oil Search is the strategic partner we were looking for," a Paris-based Total spokesman said. "We know them well and have other partnerships with them in PNG."

In December, when Total struck the deal with InterOil, it said it would "retain the flexibility to farm-down an aggregate of up to a 19.3 per cent interest to a strategic partner".

Total said its deal with InterOil was continuing.

Still, there has been no announcement declaring the deal unconditional, indicating the future of Elk and Antelope needs to be sorted out in coming weeks through talks that will involve Oil Search.

They also may involve Exxon Mobil, the operator of PNG LNG that last year held unsuccessful talks with InterOil to buy into Elk and Antelope.

Total would not comment on whether it was open to processing the gas at PNG LNG.

"Our acquisition of those significant discovered resources is an opportunity to develop a new gas production and liquefaction hub in the Asia-Pacific region, where gas demand is very dynamic," the spokesman said.

Elk and Antelope will be able to be developed faster and more economically if decent terms can be negotiated to do it through the PNG LNG plant, which is 300km away and which would substantially reduce the required infrastructure spend."

http://www.theaustralian.com.au/business/mining-energy/total-hails-oil-search-as-perfect-png-partner/story-e6frg9df-1226845239307#

'Palm' pid='38662' datel Wrote:Good to see Total come out publicly like this and to confirm that all options are definitely on the table as to what happens with the gas. That last sentence says it as most have understood what is likely going on; the gas will be processed the "fastest and more economically" which includes sending it to PNG LNG for expansion.

'Palm"--Is it ok now to say....."the plot thickens" ? All very 'in-ter-rest-ing!

The government is the common owner and  rainmaker that will bring all together and the gas down to PNG LNG.

'Dr. Wu' pid='38665' dateline='<a href="tel:1393947 Wrote:

The government is the common owner and  rainmaker that will bring all together and the gas down to PNG LNG.

Maybe when that happens they will have a joint announcement celebration and Oneill, Hession, Botten, The Walrus and Rex will each have a stack of Kina and "make it rain" in the swimming pool for all to see!

'Getitrt2' pid='38670' datel Wrote:Palm, ALL of this is obviously of great interest, but it does not seem appropriate to me to be underlining the last unattributed statement by the author of the article, with the resulting de-emphasis of the actual statements and quote from Total: 'Total would not comment on whether it was open to processing the gas at PNG LNG. "Our acquisition of those significant discovered resources is an opportunity to develop a new gas production and liquefaction hub in the Asia-Pacific region, where gas demand is very dynamic," the spokesman said.' We have indication from elsewhere that Hession and Total have expressed an intent to appropriately modify the SPA and proceed as previously planned with respect to PRL 15. What concrete reason is there to believe that they are likely to change direction and sell that gas to PNG LNG? Why would the PNG government not want to have Total proceed to build a second LNG project as soon as possible, with potential for expansion of TWO projects from additional PNG gas?

Getirt2, remind yourself of recent events, ownership structures, timelines  -  and please think long and hard before asking these kinds of questions..