Hession's Task

[Tree]

Hession will need to earn his money.

It's clear that XOM wants more than 4.6 Tcf from IOC and that IOC intends to have a Gulf LNG project.

It's also clear that the safest quickest route to fill the PNG Treasury is to maximize PNG LNG expansion with multiple trains and there is the rub, Gulf Province and landownders were promised an LNG Project and PNG LNG seeks full expansion first.   That rub is agitated by the other SM LNG hopefulls.  Would appear a commitment to Gulf LNG after further appraisal work in PRL15/T-2 would keep all happy.

**********

PNG Cabinet Approves InterOil’s Gulf LNG Project

November 16, 2012

Port Moresby and Houston, TX — InterOil Corporation (NYSE: IOC) (POMSoX: IOC) (“InterOil” or the “Company&rdquo is pleased to have been notified by the Prime Minister Hon. Peter O’Neill that the National Executive Council (NEC) of Papua New Guinea has approved InterOil’s LNG development project in the Gulf Province. The decision clears the way to proceed with our plans for an LNG plant in the Gulf Province with initial output of a minimum of 3.8 million tonnes per annum. As the Prime Minister has announced, the decision also approves the acquisition by the State of an additional 27.5% equity interest in the Elk/Antelope gas fields, over and above the 22.5% interest to which it is entitled under the Oil & Gas Act, on terms to be negotiated with InterOil........

May 24, 2013

Port Moresby and Houston, TX — InterOil Corporation (NYSE: IOC) (POMSoX: IOC) (“InterOil” or the “Company&rdquo and its joint venture partner, Pacific LNG Group, have entered into exclusive negotiations with ExxonMobil Papua New Guinea Ltd., a subsidiary of ExxonMobil (NYSE: XOM), on the development of Petroleum Retention License 15 (PRL 15), which comprises the Elk and Antelope fields in the Gulf Province of Papua New Guinea. The transaction has been discussed with the Government of PNG and any future agreement will be subject to their final approval.

Items under consideration include:

• InterOil and Pacific LNG selling ExxonMobil Papua New Guinea Ltd. an interest in PRL 15 that is sufficient to supply gas to develop an additional LNG train at ExxonMobil Papua New Guinea Ltd.’s Konebada site. There will be staged payments before and after production commences.
• InterOil and Pacific LNG will be funded to drill additional delineation wells in the Elk and Antelope fields, which will be followed by recertification of the resource.
• InterOil and Pacific LNG will have the optionality to either independently develop a second LNG project in the Gulf Province that may also use gas from PRL 15 and potentially other discoveries, such as Triceratops, or pursue further development with ExxonMobil Papua New Guinea Ltd.

"SYDNEY--InterOil Corp. ( IOC  said Thursday it wants to keep open the option of building a new gas-export plant in Papua New Guinea, potentially putting it at odds with Exxon Mobil Corp.'s ( XOM  plan to expand an existing project there."

"I'm coming onboard to build InterOil into a true LNG player. So it's not my intention that we do a sale without carrying forward any interest in this project," Michael Hession, who was appointed InterOil's chief executive on Thursday, said in a joint interview with InterOil Chairman Gaylen Byker."







Read more: http://www.nasdaq.com/article/interoil-may-pursue-new-gas-export-project-in-png-20130711-00108#ixzz2aoLMF9iy

By Russell Searancke Wellington    19 July 2013 00:00 GMT Duma adds a twist to gas supply talks Papua New Guinea’s Petroleum & Energy Minister William Duma has added a twist to the negotiations between InterOil and ExxonMobil over gas supplies into the US giant’s PNG liquefied natural gas project. Duma said the government is respectful of the commercial negotiations that are ongoing between the two energy companies, but emphasised that whatever agreement is reached must be within the parameters and project specifications contained in the 2009 Project Agreement between InterOil and the government. The focus of the discussions between InterOil and ExxonMobil is the acquisition by ExxonMobil of an equity stake in the permit that contains the Elk-Antelope gas discoveries operated by InterOil. The proposed deal would see ExxonMobil buy an interest in Block PRL-15 that would give it access to 4.6 trillion cubic feet of gas in order to build an additional train at PNG LNG. There is no suggestion of a new standalone LNG facility, which was the basis of the 2009 Project Agreement, and of the November 2012 Gulf LNG proposal which evidently was approved by the government. However, highly-placed sources said there is no certainty over the legal status of the 2009 agreement, and questioned Duma’s motives. Duma reiterated that the government intends to take up its ­legal entitlement of a 22.5% equity share in Block PRL-15. “At this stage, we do not know when the current negotiations ­apparently being conducted between InterOil and Exxon will be concluded. However, any final agreement must meet the project specifications contained in the 2009 Project Agreement,” said Duma. The 2009 agreement stipulated a two-train LNG facility, with each train capable of producing about 4 million tonnes per annum of LNG, based on feedstock from Elk-Antelope. Over subsequent years InterOil took the project through various guises without progressing to a final investment decision, and in 2012 the government insisted InterOil return to the original 2009 proposal. Last November, the government apparently endorsed a revised development model called the Gulf LNG Project and, in a surprise move, decided it wanted half the gas resources from the Elk-Antelope field for its domestic market. InterOil believes a tie-up with ExxonMobil will benefit PNG “in a number of ways” including the use of PNG LNG infrastructure to create strong synergies and cost savings, and allowing for early development of the Elk-Antelope fields. “InterOil believes that the economic benefits to the existing project partners and the country of Papua New Guinea are compelling.” Most market watchers are supportive of a tie-up between the two companies. The Elk-Antelope fields are understood to contain best case contingent resources of 9.45 trillion cubic feet of wet gas. Assuming the ExxonMobil deal is completed, InterOil will still have the option of either developing its own LNG project using the remaining gas from PRL-15 plus other discoveries including the recent Triceratops find, or it could pursue further co-operation with ExxonMobil. ExxonMobil is already progressing with plans to develop its own P’nyang gas field as a supply source for a third train at PNG LNG. It is understood that any agreement for Elk-Antelope gas would be the stimulus for a fourth train.

 

By Russell Searancke Wellington

 

 19 July 2013 00:00 GMT

Duma adds a twist to gas supply talks

Papua New Guinea’s Petroleum & Energy Minister William Duma has added a twist to the negotiations between InterOil and ExxonMobil over gas supplies into the US giant’s PNG liquefied natural gas project.

Duma said the government is respectful of the commercial negotiations that are ongoing between the two energy companies, but emphasised that whatever agreement is reached must be within the parameters and project specifications contained in the 2009 Project Agreement between InterOil and the government.

The focus of the discussions between InterOil and ExxonMobil is the acquisition by ExxonMobil of an equity stake in the permit that contains the Elk-Antelope gas discoveries operated by InterOil.

The proposed deal would see ExxonMobil buy an interest in Block PRL-15 that would give it access to 4.6 trillion cubic feet of gas in order to build an additional train at PNG LNG.

There is no suggestion of a new standalone LNG facility, which was the basis of the 2009 Project Agreement, and of the November 2012 Gulf LNG proposal which evidently was approved by the government. However, highly-placed sources said there is no certainty over the legal status of the 2009 agreement, and questioned Duma’s motives.

Duma reiterated that the government intends to take up its ­legal entitlement of a 22.5% equity share in Block PRL-15.

“At this stage, we do not know when the current negotiations ­apparently being conducted between InterOil and Exxon will be concluded. However, any final agreement must meet the project specifications contained in the 2009 Project Agreement,” said Duma.

The 2009 agreement stipulated a two-train LNG facility, with each train capable of producing about 4 million tonnes per annum of LNG, based on feedstock from Elk-Antelope.

Over subsequent years InterOil took the project through various guises without progressing to a final investment decision, and in 2012 the government insisted InterOil return to the original 2009 proposal.

Last November, the government apparently endorsed a revised development model called the Gulf LNG Project and, in a surprise move, decided it wanted half the gas resources from the Elk-Antelope field for its domestic market.

InterOil believes a tie-up with ExxonMobil will benefit PNG “in a number of ways” including the use of PNG LNG infrastructure to create strong synergies and cost savings, and allowing for early development of the Elk-Antelope fields.

“InterOil believes that the economic benefits to the existing project partners and the country of Papua New Guinea are compelling.” Most market watchers are supportive of a tie-up between the two companies.

The Elk-Antelope fields are understood to contain best case contingent resources of 9.45 trillion cubic feet of wet gas.

Assuming the ExxonMobil deal is completed, InterOil will still have the option of either developing its own LNG project using the remaining gas from PRL-15 plus other discoveries including the recent Triceratops find, or it could pursue further co-operation with ExxonMobil.

ExxonMobil is already progressing with plans to develop its own P’nyang gas field as a supply source for a third train at PNG LNG.

It is understood that any agreement for Elk-Antelope gas would be the stimulus for a fourth train.

[Dr. Wu]

or to keep things orderly, XOM could just buy IOC and control their own destiny..

[Palm]

Hession is the right guy for sure and he knows how this stuff goes. I'd guess the first couple of meetings with him the PNG government has seen a big difference. Duma also knows his goose is pretty well cooked and trying to align himself with Kavo is a last desperate act. I'll be surprised at this point if XOM makes a play for IOC. Could come from elsewhere though.

[Tree]

Confucius now say: '50/50 chance XOM buy all PRL15 rice paddy, IOC get large PNG LNG train stakes and on EZ street to develop 236 as Hession build LNG plant at napnap.'

[ArtM72]

LNG at Napanap stick in the eye of host

[Spartina]

There is a reasonable chance we could hear news by this Monday.
I can't believe anybody is selling today.

[davidhmtk]

There is a reasonable chance we could hear news by this Monday. I can't believe anybody is selling today.

OilSearch can't let XOM buy IOC.

[TxPm]

Spartina,

Care to elaborate?

[Getitrt2]

There is a reasonable chance we could hear news by this Monday. I can't believe anybody is selling today.

OilSearch can't let XOM buy IOC.

If XOM wanted to do that, I don't think OSH could stop them.

[Palm]

Thanks Spartina; confirms other chit chat. Might see a little poppie to close the day.