Western Province: Eaglewood license shows the O'Neill way

[Getitrt2]

This licensing I think shows how O'Neill and NEC see development in the future. Note that the "strategic" designation is very important because it means infrastructure and things like CSPs are to built for use by aggregated resources. This shows how serious they are about maximizing plants/infrastructure to minimize investment and maximize cash flow. IOC's license corridor development likely will have different players owning PRLs but sharing "strategic" licenses. If you look at what Eaglwood says, they have two PRLs (PRL 28 and PRL 21) which have different players (except for Mitsubishi), but they will share a CSP and pipeline under terms to be worked out. It could be that that type of discussion is going on now between IOC, Total, OSH and Exxon with the government holding the "heavy" of strategic licenses over their heads.

I don't think there will be that kind of shared infrastructure involved with PRL 15, and I do not think Exxon is involved in the discussions on it now, just IOC, Total, and the government, and maybe OSH on the periphery, with nothing hanging over their heads, except perhaps unneeded urgings to "get it done".

[Getitrt2]

Using the Englewood deal as a model one of best use of dollars should be gas for train 3 Exxon. The provider of the gas is well treated when allocation of LNG participation are decided using OSH as a model. Could IOC trade its gas ownership for LNG participation??Lots of possibilities.

Perhaps for IOC gas from somewhere else, but not from PRL 15 I don't think.

[Palm]

This licensing I think shows how O'Neill and NEC see development in the future. Note that the "strategic" designation is very important because it means infrastructure and things like CSPs are to built for use by aggregated resources. This shows how serious they are about maximizing plants/infrastructure to minimize investment and maximize cash flow. IOC's license corridor development likely will have different players owning PRLs but sharing "strategic" licenses. If you look at what Eaglwood says, they have two PRLs (PRL 28 and PRL 21) which have different players (except for Mitsubishi), but they will share a CSP and pipeline under terms to be worked out. It could be that that type of discussion is going on now between IOC, Total, OSH and Exxon with the government holding the "heavy" of strategic licenses over their heads.

I don't think there will be that kind of shared infrastructure involved with PRL 15, and I do not think Exxon is involved in the discussions on it now, just IOC, Total, and the government, and maybe OSH on the periphery, with nothing hanging over their heads, except perhaps unneeded urgings to "get it done".

I do, especially with OSH in the picture; that wasn't planned and OSH clearly stated after IOC and Total made their deal that they were still in negotiations.  And if the government wanted to just "get it done", O'Neill would have been singing praises about the deal.  Instead he has said basically nothing.  Duma talked about it and said he wanted it fast-tracked, but O'Neill's only real mention of Total and IOC was after the government buy-in to OSH was figured out and OSH had announced that they were buying the Pac LNG interests.  He said that he "understood" that OSH was talking with IOC and Total.  That's it.  Then he sacks Duma and Polye.  He is in charge and he has NEC support in this consolidation of resources change.  He and NEC granted the "strategic" licenses to Eaglewood contingent on all parties figuring out how the CSP and Pipeline licenses can be shared.  He said he would move projects this way back in December and he has just done it in Western Province and he has full support of NEC and the PNC coalition.  Why would he do any different with IOC on PRL 15 and forward?  How do O'Neill and the NEC explain the exception allowed for IOC/Total to those who are pouring in investment dollars just as IOC/Total have/will?  The thing is, it makes good business sense.

[Palm]

O'Neill did make these great comments about the project:

"The government has embraced this joint venture between these two companies, given their requisite LNG experience, financial strength and market for the product to help implement PNG’s third LNG project,” Prime Minister Hon. Peter O’Neill said. He welcomed the proposal for the gas to be engaged in the domestic market.

“This is good news as it will provide for our energy needs in the country,” the Prime Minister said.

But the project was not the IOC/Total JV.  It was the Horizon and Osaka Gas joint venture to, "explore and develop the substantive acreage and reserves in the Western Province including the Stanley Project."  These statements were made by O'Neill on February 18, 2014.  From December 5th to now O'Neill has not made any statements close to this regarding IOC and Total. The Horizon and Osaka deal also has contingensies before it's final.

[jft310]

Total hails Oil Search as perfect PNG partner

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...6845239307

[ArtM72]

JFT -

Is the last sentence in your post beginning with "Elk and Antelope will be able..." your comment or someone else's? The article link didn't work for me.

Thanks...

[jft310]

Palm was the original poster . It was a lead story that I remembered and reposted it here because many had not read the story or had not remembered it if they did.

I cut and pasted what Palm posted .I added no commentary. The line you ask about has quotes after it and it implies it came from the Total spokesperson.

The link worked on Palms  post. May have been corrupted when cut and pasted.

[Getitrt2]

Palm was the original poster . It was a lead story that I remembered and reposted it here because many had not read the story or had not remembered it if they did.

I cut and pasted what Palm posted .I added no commentary. The line you ask about has quotes after it and it implies it came from the Total spokesperson.

The link worked on Palms  post. May have been corrupted when cut and pasted.

Wrong, I'm afraid.  The quotation mark after that last sentence is the one at the end of the article that partners with the one at the beginning of the article, which stand for the quoting of the entire article.  The next-to-the-last sentence is presented as a quotation from the Total "spokesman", with quotation marks at the beginning and end of it, indicating that the last line is NOT a continuation of the spokesman's statement.  That statement by the Total spokesman actually contradicts the last following sentence, which very clearly appears to be a statement by the reporter who wrote the article, with no indication of where he got it or how he reached such a conclusion!

The original article posting by  Palm is the 3/4/14 thread with the same heading as the article, "Total hails Oil Search as perfect PNG partner".

A good article to read in conjunction with this one is the 3/2/14 article in AFR (Australia Financial Review) posted by Brew Swillis in the 3/2/14 thread, "AFR - Total confirms intent".