China's oil corp joins InterOil in hunt for a strategic partner

Petromin committed to discuss commercial terms

 

CHINA’s National Offshore Oil Corporation (CNOOC) will now join discussions and the process in bringing a strategic partner to the InterOil Corporation-led liquefied natural gas project, The National reports.

Importantly, it will discuss terms on which it will provide a carry for Petromin PNG Holdings Ltd in respect to the financing of the State’s equity in the project.

This comes after Petromin and InterOil signed a heads of agreement (HoA) on Wednesday in Beijing, China, that was witnessed by Prime Minister Sir Michael Somare and Chinese premiere Wen Jiabao.

The HoA is for commercial cooperation with CNOOC, following official talks between Mr Wen and Sir Michael.

The occasion was viewed as one of the major achievements of Sir Michael’s visit to China.

Petromin, in a statement, said both InterOil and itself had started discussions with a number of major oil and gas companies to bring in a strategic partner to the InterOil project that would underwrite the project.

“The HoA now allows CNOOC to participate in that process,” the statement said.

“More significantly, the HoA provides for CNOOC to discuss the terms on which it will provide a carry for Petromin in respect of the financing of the State’s equity in the project.”

Petromin managing director Joshua Kalinoe said the parties were committed to quickly agree on the commercial terms for this financing and to enter into binding arrangements as soon as possible.

Mr Kalinoe said he was excited about the progress to date on the financing arrangements.

He thanked the National Government, in particular Sir Michael, for the support and the political leadership provided for the InterOil-led project in his capacity as minister responsible for Petromin.

“For Petromin and the people of Papua New Guinea, this is a major project where the benefits will flow throughout the national economy. Petromin, as the national petroleum and mining company will hold equity in the gas field and the LNG plant for the benefit of all Papua New Guineans.”

He added that CNOOC and InterOil had given undertakings to work with Petromin to assist it to build capacity and experience in all facets of the project and to create jobs, skills training and long-term economic benefits for as many Papua New Guineans.

“As an example, Petromin has the option of co-marketing the State’s share of the LNG. This will develop marketing expertise which will have on-going relevance as new oil and gas resources are located and developed.”