Enter InterOil’s ‘Pandora’s Box” via Wabo

By SUSUVE LAUMAEA*

ONE hour and 45 minutes flying time by Twin Otter aircraft due west of Port Moresby is sleepy Wabo outpost (pictured above).
It’s a place never visited with frequency by the administration of Gulf Province or by the province’s political leaders until election time when political opportunists go looking for votes from the people who live there.
Wabo’s significance to Papua New Guineans and the world at large is it being pointer on the map to the location of Papua New Guinea’s latest and biggest natural gas discovery. Wabo is the entry point to InterOil Corporation, Gulf Province and PNG’s latest “Pandora’s Box” – the massive 382 Million Cubic Feet of Natural Gas per day (MMcfd) Antelope-1 natural gas well with 5,000 barrels of gas condensate per day (BCPD) which translates to 68,700 barrels of oil equivalent per day.
Prime Minister grand Chief Sir Michael Somare and spouse Lady Veronica Bura Somare and their eldest children daughter Betha and son Sana made a rare appearance as PNG’s First Family at the head of bevy of PNG VIPs, national international corporate heavies and a strong media contingent in this Gulf Province backwater on Monday, March 2, 2009 where Sir Michael flowed and flared the awesome Antelope-1 discovery.
It’s a record PNG and Southern Hemisphere vertical find of its kind for the last 20 years in the Asia-Pacific region.
Wabo is a makeshift station in the upper reaches of the Purari River in Gulf Province and is the only inhabited locality.
Further downstream is InterOil’s supplies staging camp and barge ramp which is about one hour away if one motored down the river in a banana boat dinghy powered by a 40 horsepower engine.
Wabo is an important destination for emerging PNG-based energy house InterOil Corporation – the Canada-registered vertically integrated oil and gas Company that calls Papua New Guinea home.
Wabo is also location of the nearest airfield where chartered short take-off and landing (STOL) aircraft land to offload InterOil’s exploration, drill and rig staff and the occasional VIP passengers who then hop onto waiting helicopters for the short but scenic 10 minute shuttle flight to the company’s Elk and Antelope gas fields located 200 metres vertically and anywhere from two to five kilometres horizontally above the banks of the ever meandering Purari River.
The Elk and Antelope gas field wells at Elk-1, Elk-4 and Antelope-1 are actually strutting above geologically pear-shaped and overlapping subterranean reef structures located within a radius of 10 kilometres on a tropical forested knoll above the swampy Purari flood plains.
No traditional villages are located in the immediate locality of the well heads or the respective drill sites.
Baimuru district station is located some 80 kilometres east of Wabo.
In the last 12 months political leaders and administration officials of Gulf Province were only able to make it to Wabo and the drill sites at Elk-1, Elk-4 and Antelope as invited guests who “piggy-bagged on the company.
Even the presence of so-called Port Moresby-based landowner leaders is seen at this remote outpost before, during or after field trips made there by this writer to the area in the last 12 months.
So when relatively junior officers of the Gulf Administration and so-called landowner leaders make public comments about non-inclusiveness in pre-development participatory and benefits sharing checklist in the media from the comfort zones in Port Moresby or Kerema station one has to take their claims, allegation and assertion with not just a grain of salt but with the whole bottle.
What has been discovered at Elk and Antelope is natural gas resource of a magnitude that will transform the economic profile of Gulf Province and Papua New Guinea by 2025. The resource is awesome and it’s mind-bogglingly massive.
It does not require disoriented and misinformed little Gulf Province political, administrative and landowner opportunists to cry foul when nothing beyond exploration and discovery has taken place. InterOil Corporation must be given praise and accolades for taking the risk 10 years ago to go exploring – when no one else including the world’s biggest or Peak Oil companies would not touch PNG even with a 10-foot pole -- for oil and gas in an area many learned geologists and armchair experts wrote off as “dry bed”.
There was nothing to be discovered there, so they all said.
After spending K100 million on seismic surveys and spending up to US$35 million a piece on each of its drills in a persistent “never say die” fashion, InterOil Corporation deserves its massive success at Elk and Antelope.
The Antelope-1 and Elk discoveries initially provide the basis for InterOil to develop a single train natural gas liquefaction plant in Papua New Guinea.
The flaring of Antelope-1 on Monday, March 2, 2009 underpins a first train of 3.5 million tons per annum capacity plant at an estimated cost of US$5 billion.
There is scope for that project to be improved to two, three or more trains from the resources at Elk and Antelope and from adjacent unexplored and undrilled prospects.
Gulf Province people must not feel left out or ignored in this pre-development period. Having discovered the resources to develop a viable Liquefied Natural (LNG) project, InterOil Corporation as the developer needs to complete all its “midstream and downstream” prerequisite plans, preparations, contracts and logistical arrangements in place.
These arrangements also include completing social mapping, landowner identification and integrated landowner groups registered, getting the environmental impact study approved and certified and completing a schedule of preliminary developmental and benefits identification consultations with Gulf Provincial Government and resource and project area landowners.
InterOil’s primary goal is to establish a “win-win” peaceful and value-added development and benefits sharing partnership and understanding with all stakeholders right from the beginning.
There is enough resource there for Gulf Province, PNG through its State-owned company Petromin Limited and InterOil to share, develop and prosper together for a long, long time after the first 35-year operations of the LNG plant.
There is scope for primary aspects of the natural gas conversion and gas condensate preparations to take place within the Purari area prior to being piped to natural gas liquefaction plant adjacent to InterOil’s oil refinery in Port Moresby.
Such development promises a minimum life-span of 35 years on a single train operation and scope gets bigger and the life-span increase two-fold or three-fold as additional trains are added to the LNG plant.
And so the majority of Gulf Province people -- including landowners, provincial government, provincial politicians and potential politicians, little officers at the dysfunctional Gulf Province administration and Port Moresby-based pseudo-landowners, skeptics and cynics – must remain cool, calm and collected.
They must listen to the voice of reason and wisdom from wherever that comes from – National Government, InterOil Corporation, the Gulf Provincial Government or from Gulf’s learned sons and daughters – and accordingly to maximise their benefits, ownership and inclusiveness.
There are massive spin-off and sub-contractual works to come out of this project for Gulf Province people and provincial government to ride on to realise the province’s future development and prosperity aspirations.
The last thing Gulf people want to do is talk down their opportunity, speculate on issues that are neither here nor there, deny their chance of inclusiveness in benefits to share and to parochialise this awesome economic and social development chance with divisive and partisan politics or creating conflicts through doubtful and questionable land ownership claims.
The economic and social opportunities and potential for the future development and prosperity creation of Gulf Province overall is massive. This opportunity requires the absolute support and cooperation of every man, woman and child of Gulf Province.
The facts are clear. InterOil Corporation went out of their way to explore for oil and gas initially to find feedstock for their oil refinery in Port Moresby because they could not access Kutubu light crude directly.
InterOil has had to compete with international competitors on the open market overseas to buy Kutubu crude at the going international premium price to refine at its Napa Napa oil refinery. InterOil applied for exploration license from the Government of PNG to go exploring.
InterOil also spent its money generously to persist with the exploration when others preferred to stay away because of the nation’s economic meltdown commencing from around 1995 and finally easing off around 2005.
Opportunists that have emerged from the closets need to be mindful about the damage they can do to all the goodwill that InterOil is prepared to share to ensure a win-win success of its LNG project development.
Probing questions pertinent to intent and motive have to be asked when approaches are made secretively to the Prime Minister to grant a certain so-called landowner development association from the Baimuru District legitimacy as being representative of all the landowners and K5 million mobilization funds without the knowledge of immediate drill-head landowners.
No one will dispute traditional ownership of land or immigration of people with traditional land ownership to and fro within the Purari delta region and its remote head waters from the time of Adam and Eve.
Obviously there are people who have migrated west and spread along the way as far as the eastern bank of the Fly River and east as far as Mapenairu at the mouth of the Purari River and the western most villages and hinterlands of Ihu District.
From a low flying helicopter one can appreciate the sweeping vastness of the mangrove and nipa palm swamps that one over flies for 35 minutes to the coast from Wabo or for 35 minutes of the 45 minutes flight to Kerema airstrip.
There are landowner groups emerging overnight like mushrooms after one of those Gulf of Papua rainfalls.
Nearly all the opportunist landowner groups are new and therefore unknown to the company’s community affairs field workers who are permanently operating in the Baimuru District.
Ends.

*Susuve Laumaea is an award-winning veteran PNG journalist. He works for InterOil Corporation as the company’s Senior PNG Manager for Media Relations & Public Affairs. He also writes a weekly Public Affairs column for the Port Moresby-based weekly Sunday Chronicle newspaper.