Gulf Politicians vs National Significance

[Tree]

Minor political complaints nor dinosaur footprints can stop this IOC/XOM deal.

Only project economics can siderail us and not even VS Consortium will argue that case.

**********

Industry briefs

Blair Price Friday, 19 July 2013 OIL Search clocks up some “good indications” of hydrocarbons at its offshore Hagana-1 well; Explorer Gold Anomaly becomes Crater Gold Mining; and InterOil lines up financing for its oil refinery and receives pressure from Gulf province leaders. Crater Mountain image courtesy of Gold Anomaly. In its drilling report yesterday, Oil Search said two sand packages with good indications of hydrocarbons were penetrated during the week. The well in the Gulf of Papua, which is pursuing its secondary sandstone target, was at a depth of 3283m yesterday. The Papua New Guinea explorer, which became Gold Anomaly after Australia-listed Gold Aura merged with Crater Mountain project owner Anomaly Resources, has changed its name to Crater Gold Mining. The ASX code will change to “CGN” on July 23 – with “CGM” already used by Cougar Metals. Earlier this week, InterOil entered into a $US350 million working capital facility for its oil refinery near Port Moresby. Five banks have provided the pooled finance with BNP Paribas as the lead manager. The new capital facility replaces the existing $240 million with BNP. Meanwhile, three Gulf province parliamentarians have recently made a joint statement criticising the lack of progress on InterOil’s discoveries in the region. The men, Gulf governor Havila Kavo, Labour and Industrial Minister Mark Maipakai and Kerema member Richard Mendani, all support a “no pipeline” policy for the discovered gas, which they want processed in Gulf province. ExxonMobil remains in exclusive negotiations over acquiring at least a 4.6 trillion cubic feet of natural gas slice of InterOil’s Elk-Antelope discoveries to underpin a third train expansion of the PNG LNG. While this approach involves piping a large portion of the Elk-Antelope gas out of the province to PNG LNG infrastructure, it is unclear how much influence the Gulf parliamentarians will have over such a project of national significance.

[Palm]

That last paragraph reflects what we've been saying and what Polye says in his EMTV interview. The National government makes the agreements and approves projects as well as it decides whether to participate or not and at what level. The 2.5% that goes to the "locals" is carried by the National government and they decide which entity will hold that interest. Polye explains how this allows the National government to make decisions which are best for the country and give autonomy and more funding to Provinces as they are ready. Meanwhile the 2.5% ownership provides funding to do local development on a smaller scale until things are ready for more major development.

This all falls under the national planning and funding through the Treasury/SWF which O'Neill's government has been carrying out with great precision so far.

[jft310]

The solution to the Gulf leaders requests is simple and revealed in the initial Exxon Presser. That Presser states IOC has the right to develop their own independent LNG plant. I believe this Gulf leader ruckus is about seeing that IOC does develop an independent LNG in Gulf province and to discourage the selling of more than 1 train of NG to Exxon. Using the EWC module idea maybe with a financially stronger company than EWC in Gulf would make all happy(except Chandler). If the EWC deal was used as proposed that is FID ready then 85% of the LNG revenue comes to IOC vs maybe 20% with Exxon in train 3 deal. Highly profitable for IOC shareholders. The NG that IOC owns at 5 cents per mcf get sold by them for $14 plus. I call that profit.Odds of this are quite high in my mind.