The revised sales and purchase agreement will see Total take a 40.1% gross operated interest in PRL 15, down from the original deal revealed in December which would have seen the French company take up to a 60.1% stake.
The terms of the original deal were affected when Papua New Guinea’s largest oil producer Oil Search acquired Pacific LNG’s interest in the licence in a $900 million deal.
The original agreement between InterOil and Total was conditional on one or both acquiring Pacific LNG.
Under the revised agreement, InterOil will receive an immediate payment of $401 million from Total, followed by a further $73 million payment on a final investment decision for the Elk-Antelope liquefied natural gas project and another $65 million payment once the first LNG cargo is shipped from the project.
Under the original deal, Total would have paid $613 million upon completion of the transaction, $112 million on a final investment decision for a new LNG plant and $100 million at first LNG cargo in exchange for a larger stake in the project.
InterOil said on Wednesday that all fixed and variable payments that were agreed in December would continue to apply pro-rated according to the new equity split, including those for exploration, appraisal and resource certification.
The variable payments are dependent on the size of the resources in PRL15 and, once the reserves are understood in about 2015 following appraisal drilling, will come in a series of staged payments.
“The agreement clears the way for co-operative joint venturers, who all share the government’s wish to monetise Elk-Antelope as quickly as possible, through the fast-growing Asian market,” InterOil chief executive Michael Hession said.
“InterOil now has a solid partnership where Total can use its considerable LNG expertise to develop Papua New Guinea’s second LNG project.”
Total has previously indicated that, depending on the results of drilling, there could be a final investment decision by 2016 for a field development at Elk-Antelope and the construction of a new onshore LNG plant.
Total will hold a 40.1% operated stake in the project, InterOil sees its gross interest in PRL 15 reduced from 75.6% to 35.5%, while Oil Search will continue to hold a 22.8% interest in the licence. The remaining 1.6% equity is held by through indirect participating interests.