So it is Hession's fault.
He put the skids on Byker's undervalued deal with XOM for 4.6 T gas sale and then Hession has the gonads to up the ante to XOM for an equity stake and more $. Take your time Dr. Hession, get it right. December will be fine if that is how long it takes. I don't know if it's comforting or scary that it appears Russell does his DD on SHU.
**********
ExxonMobil runs rule over InterOil gas proposals
By RUSSELL SEARANCKE Wellington
25 October 2013 00:00 GMT
Talks between ExxonMobil and InterOil over feedstock gas supplies into the Papua New Guinea liquefied natural gas project have slowed while the US supermajor takes stock of changes proposed by InterOil.
The pair agreed on major terms five months ago for ExxonMobil to purchase 4.6 trillion cubic feet of gas from InterOil’s Elk-Antelope field in Block PRL 15 to be used as feedstock for an additional train at the ExxonMobil-operated PNG LNG project.
The talks ebbed and flowed for the first couple of months, but the dynamics of the situation changed in July when InterOil made several management changes, including the appointment of a new chief executive.
Since then, InterOil has invited other interested parties to bid for Elk-Antelope gas while continuing to try to finalise a deal with ExxonMobil.
Neither ExxonMobil nor InterOil are commenting on the process.
Well-placed sources said the latest twist is that InterOil has made new proposals to ExxonMobil that the US player is taking its time to absorb and respond to.
In effect, InterOil’s new management would like to receive more in exchange for their 4.6 Tcf of gas from Elk-Antelope than originally envisaged.
It is understood the initial terms were based on a sales and purchase agreement of the gas, but InterOil now favours a traditional farm-in type scenario, and that an equity stake in any subsequent LNG train would also be desirable.
PNG-based sources said that, despite the apparent impasse, there is cautious optimism that a deal can be concluded before December.
The consensus is that InterOil is in a strong position, for several reasons.
InterOil has, evidently, a significant gas resource and the financial returns on an expansion train at PNG LNG are lucrative.
Other LNG majors including Shell and Total are understood to be waiting in the wings for Elk-Antelope gas, and the government is anxious for a deal to be finalised.
If ExxonMobil is successful in securing Elk-Antelope gas, it looks likely that those reserves will underpin the third train at PNG LNG following recent revelations by project co-owner Oil Search that resources such as P’nyang and Juha North and the Hides field expansion are still two years away from being ready for a final investment decision.
Oil Search managing director Peter Botten said this week that his company is keeping a close eye on the InterOil bidding process “for a majority share in PRL 15”.
“We are following the sale process closely and are engaged with key players on potential development options for the gas, “ he said.
“The Elk-Antelope resource could potentially be a source of gas for LNG expansion or could underpin a new LNG development.”
“We continue to believe that being an owner of core gas and liquids infrastructure in PNG places Oil Search in a strong position, as new developments take place in the country.”
In August, InterOil chief executive Michael Hession said his company’s focus is on furthering a non-operated liquefied natural gas project in PNG.
“We will not be operating an LNG project in the immediate future,” said Hession.
“We are all about working with an appropriate partner on a non-operated LNG project going forward, and that’s evidenced by our negotiations (with ExxonMobil).”