He's Editor of the PNG Report - August edition. XOM is a Farm-In situation and not solely a gas sales. Is there a PNG discount to transactions in PNG? His comments:
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"While mining industries around the world are cutting back, PNG has an ace up it's sleeve with the petroleum boom likely to continue. Sure, the difficult global lending and investment climates do not help the smaller players, but farm-out opportunities are growing as the PNG LNG joint venture marches towards first exports next year.
What the successful completion of the PNG LNG project will prove to the world's energy giants is that this government can make these huge investments pay off.
The enormity of challenges facing PNG LNG does not go unnoticed iand the next wave of petroleum projects should be less difficult to execute. The commercialisation of InterOil's discoveries in Gulf Province isn't plagued by the incredibly difficult terrain faced by PNG LNG. The same can be said for the condensate and gas plans by the various Western province players, which have included the new entrants Mitsubishi and Osaka Gas over the past 18 months.
The cost-reward potential for Gulf resources to tap into existing PNG LNG infrastructure cannot be understated either. And to build a connecting pipeline almost seems too easy for the PNG LNG JV.
Unlike mining, PNG's petroleum projects have much savfer markets in Asia and there are even some rewarding domestic opportunities because PNG has never fully catered to it's growing electricity and fuel needs.
Perhaps the biggests risks now acome from growing social inequities and whether the government gets poor returns from what could be several years of record spending. The fact that a police unit went rogue by launching it's own armed robbery last month, and in full uniform, isn't the greatest of signs. How serious the government is about iproving living standards will be seen later this year with the progress of the sovereign wealth fund. For PNG's sake, let's hope the framework is completely rot-proof."