InterOil from the PNG press

Interesting stuff…

Shell gets PNG vote

Tuesday, 4 October 2011

THE Papua New Guinea government has fingered Shell – a strategic partner of state resources company Petromin – as a potential partner for InterOil’s planned LNG project.

In a statement about the PNG National Executive Council’s decision on the development of the Elk-Antelope field, Department of Petroleum and Energy acting secretary Rendle Rimua said the NEC had endorsed Minister for Petroleum and Energy William Duma’s official position that Shell was its preferred LNG operator to develop the fields.

Rimua said the government had no issues with the location for the Liquid Niugini Gas project and acknowledged that the Gulf Province could provide the best possible location for an LNG project for the sake of spreading or decentralising major resource project development.

However, he said the Gulf LNG proposals for a mid-scale modular LNG project with Energy World Corporation and a floating LNG facility with Flex LNG did not fit into the project described in the original project agreement.

InterOil had earlier this month confirmed it was searching for an experienced LNG operator to join its LNGL joint venture.


From The National
Govt prefers Shell in Gulf
The National – Wednesday 05th October, 2011

IT is official. Royal Dutch Shell Plc is the government’s preferred operator for the InterOil discovered Elk and Antelope gas fields in Gulf.
This was categorically stated yesterday following recent exchanges in the media between InterOil and Petroleum Minister William Duma over the size of the second LNG project, its location and who should develop it.
InterOil was pursuing a small-scale fragmented pro­ject as opposed to its original agreement with the state for a large LNG plant to be developed by an internationally recognised operator.
Acting Petroleum and Energy secretary Rendle Rimua said in a statement that Shell was in a strategic partnership with the state-owned Petromin PNG Holdings Ltd “and is the state’s preferred operator”.
He said a National Executive Council submission acknowledged that “Shell is a strategic partner with the state’s nominee, Petromin”.
Rimua said his minister, Duma, had taken this position which had been endorsed by the NEC and “it remains the government’s official position in relation to the development of the gas located in the Elk/Antelope gas fields”.
Petromin spokesman Babani Maraga said yesterday Petromin had an “alliance agreement with Shell for joint upstream exploration opportunities”.
Petromin is an equity holder in the Elk/Antelope projects.
“Shell is the world’s number one LNG operator, as well as one of the internationally-recognised major upstream and midstream players in the hydrocarbon business. Shell is a world leader in floating LNG technology,” Maraga said. 
“The partnership with Petromin is in the best interest of PNG, especially in building capacity and transfer of technology in the manner we are now experiencing with the PNG LNG project, which is being operated by another world class LNG operator.”
He said Petromin would work with any world class LNG operator the state wished to bring into the country, including Shell, to develop the gas resources, which were owned by the state and people of Papua New Guinea.
Shell is in partnership with Petromin looking at preliminary exploration results of  the off-shore New Ireland basin oil and gas prospect.


From Radio New Zealand
PNG minister unable to confirm Shell’s bid to enter Gulf gas project

Posted at 03:15 on 30 September, 2011 UTC

Papua New Guinea’s Minister for Petroleum says he’s in no position to confirm a report that Shell is trying to displace Interoil as the license holder for the Elk/Antelope gas resource.

This comes after the government suspended InterOil’s Gulf LNG Project amid claims by William Duma that the Canadian company has deviated from the plan in its 2009 agreement with PNG.

Johnny Blades reports

    “PNG’s Sunday Chronicle has reported that Shell is trying to induce the government to shake InterOil loose of its resource, or become its LNG operator. William Duma says he’s only a regulator and that this is a matter for InterOil and PNG’s state company Petromin. The Minister’s been vocal in criticising InterOil for not engaging a major operator for the project as stipulated in the agreement. He says InterOil is proposing a small scale, fragmented project, far from being a world class venture. However Mr Duma’s criticism represents a stark turnaround from February when he hailed InterOil’s success in securing reputable international companies to develop the project.”


Former PNG explorer calls for respect of InterOil
By Online Editor
4:29 pm GMT+12, 05/10/2011, Papua New Guinea

A senior geologist-turned-civil engineer Sigl Dorugl has called on the government to respect InterOil Corp, especially PNG Petroleum and Energy Minister William Duma.

Dorugl, who spent 28 years in exploration and engineering work, said Duma’s attacks on InterOil was “of bad taste and does not recognise the enormous contribution of the company to the PNG economy”.

The recent National Executive Council decision to put on hold Interoil’s development of its recently discovered Elk/Antelope gas fields is of “very bad taste”, according to Dorugl.

“The executive arm of government, on making this decision appears to focus on the old differences of ministers in the former regime.”

Dorugl accused Duma of being an indecisive minister in the former government where he sat on many applications for explorations and retention licences.

“The hard facts are in favour of InterOil and all other players do not have any tangible on-ground demonstration of confidence in Papua New Guinea,” he claimed.

“InterOil built the first commercial refinery in PNG without owning an oil or gas field.

“This action is a product of great foresightedness that needs commendation and admiration,” he said.

“Shell and Mobil have been in the country much longer then InterOil but do not have a refinery.”

Dorugl said Oil Search, after years of exporting PNG oil did not have a refinery.

“InterOil, therefore, had clear confidence in PNG,” he said.

The other players just did not have extended confidence in PNG. Dorugl said InterOil deserved all the support in all its ventures in PNG from every citizen, starting with the minister and NEC, Dorugl, who had also worked in India and the Himalayas, said.

“InterOil’s competitors have no fixed infrastructural development to show for their extended stay in PNG.

“Oil Search had nothing to show for sucking out of PNG for twenty years.

“Chevron milked the cream of oil and left … Mobil has nothing to show … Shell sold all its retail and commercial outlets to InterOil, packed up and left – an act of gross no confidence. Why entertain Shell now?” Dorugl asked.


Flex Denies Reports That PNG Government Has Shelved Gulf LNG Project

by Tom Grieder   Global Insight

Flex LNG, a provider of floating liquefaction units, has denied a media report claiming that the Papua New Guinean government has shelved the Gulf LNG project and stated that project partners are continuing to work hard to achieve a final investment decision (FID) on the project by the end of 2011.

Flex LNG stated that the company had invested USD500 million in equity in construction contracts for the project with Samsung Heavy Industries (SHI), with a substantial portion of this to be allocated to Gulf LNG. Flex LNG also said it had received confirmation from project partner InterOil that it remains focused on developing the LNG project in line with the project agreement signed in 2009 and that Flex LNG will continue to be part of these plans. Flex LNG did state that a world-class operator would be brought into the project, however, and that Flex LNG and InterOil are working hard to attract such an operator.

Significance:Flex LNG’s comments mark an attempt to reassure investors that the Gulf LNG project is on track following PNG minister of petroleum and resources William Duma’s branding of the project as “fragmented” and in breach of the original project specification.

Duma’s opposition to the nature of the revised project–which now comprises an onshore modular LNG plant and a floating LNG (FLNG) facility–appears to be being ignored by InterOil and Mitsui, which are now preparing to select winning bidders for contracts to construct the condensate stripping plant. Instead, InterOil seems to be responding to Duma’s concerns to attract a major international oil company (IOC) into the project and might look to Shell, which already evidenced its interest in PNG through the signing of a strategic alliance agreement with Petromin PNG Holdings Ltd last month. Nevertheless, IOC participation would not make the project equal in size to the ExxonMobil-led PNG LNG facility, unless Shell was interested in farming into Oil Search’s offshore acreage in the Papuan Basin and linking potential reserves to the modular LNG plant, which could then be scaled up.

In any case, Shell’s interest is not assured and the IOC might potentially want to deploy its own FLNG technology as a condition for participation in the project. Thus reaching an operator deal that satisfies Duma, the existing project partners and a potential IOC could be difficult before the end-2011 FID deadline.