Sunday, October 02, 2011

Duma fires another broadside at InterOil


PETROLEUM and Energy Mi­nister William Duma last Thursday fired another broadside at InterOil Corporation accusing it of misleading major companies interested in the Gulf LNG project.
In what appears to be a tit-for-tat exchange between the go­vernment and the company, the minister accused InterOil of denying major companies access to data about the Gulf LNG project as part of the due diligence.
His comments to Radio New Zealand yesterday followed Inter-Oil's insistence it was still committed to delivering a world-class LNG project in compliance with the 2009 project agreement.
On Tuesday, Duma announ­ced that the National Executive Council on Sept 21 had decided
to terminate the Gulf LNG project because it was pursued by InterOil as a small-scale fragmented project as opposed to the original agreement for a large-scale world-class plant to be operated by an internationally recognised LNG operator.
Cabinet shelved InterOil's plan­ned project after it found the Canadian-based petrol company had deviated from a 2009 project agreement.
But InterOil's chairman Phil Mulacek said he had discussed the government's concerns with Duma and he was still committed.
Duma responded that the agreement stipulated the project involved a "major international LNG operator", something he claimed InterOil was not.
He said InterOil had denied a host of potential operators access to data about the project as part of the due diligence.
"We're not forcing them to go into bed with a particular company. All we're saying is look, these are the options, explore them and do a deal and sell down the equi­ty and develop the project and get on with it,'' he said.
"InterOil for some reason is misleading a lot of people. It's a concern. Papua New Guinea is a small country, we have to be frank with each other."
Meanwhile, Reuters last Thursday reported that InterOil's shares in the New York Stock Exchange sank to nearly a two-year low on Wednesday after it got hammered the previous day.
Shares of the company were trading down 16% at US$38.60 in morning trade on Wednesday on the New York Stock Exchange.
They touched a low of US$38.40 earlier in the session.
MKM Partners analyst Curtis Trimble said the PNG government's decision was likely to have little material impact on the company.
He said he expected plans for the LNG project to remain on track.
"Papua New Guinea government has a direct participation interest in the LNG plant.
"It is a major driver of government re­venues and employment growth.
"It would make little sense for the government to make additional difficulties to build the plant at this point," he said

No comments:

Post a Comment