Papua New Guinea LNG project enters into Heads of Agreement with Sinopec

Project will provide long-term supply to Unipec

Port Moresby, Papua New Guinea, November 4, 2009 – Esso Highlands Limited, a subsidiary of Exxon Mobil Corporation and operator of the PNG LNG project, today announced that the project participants entered into a Heads of Agreement with Unipec Asia Co., Ltd., a subsidiary of China Petroleum & Chemical Corporation (Sinopec) for the long-term supply of 2 million tonnes per annum of liquefied natural gas (LNG).

The PNG LNG project participants are working with Sinopec to finalise a binding sale and purchase agreement.

A final investment decision on the project is planned for later this year.

Documents commemorating the agreement were signed in Port Moresby.

“We are pleased to have reached this important milestone with Sinopec,” said Ron Billings, vice-president of ExxonMobil Gas and Power Marketing.

 “With this agreement in place, the PNG LNG project is now conducting exclusive discussions with major Asian LNG customers for binding sale and purchase agreements covering the full project capacity.”

“We are pleased to have signed this significant Heads of Agreement with the PNG LNG project, which is led by our partner ExxonMobil.

“This LNG resource will be supplied to a LNG receiving terminal that Sinopec will build in China,” said Wang Zhigang, senior vice-president of Sinopec.

 "We hope that the working teams from both parties continue to work closely together to finalise the sale and purchase agreement as soon as possible."

The PNG LNG project is an integrated development which includes gas production and processing facilities, onshore and offshore pipelines and LNG plant facilities.

Participating interests are ExxonMobil (Esso Highlands Limited as Operator) 41.5%, Oil Search 34.0%, Santos 17.7%, Nippon Oil 5.4%, Minerals Resources Development Company 1.2%, and Eda Oil Limited 0.2%. (Participation will change when PNG State nominees join as equity participants at a later date.)

Media Contact: Miles Shaw

Phone: (675) 322-2133

Email: miles.j.shaw@exxonmobil.com

Happy Birthday, Malum Nalu Jr!

Happy  Birthday Malum Nalu Jr, who turns nine today.        
                                                                                                                                                                                                  That's you with late Mummy, Hula, and Dad after your birth in Goroka on November 4, 2000.       

Hope you have a wonderful day in Lae today with the family.                                                                                                                                                                                         
Never-ending love from Dad, Gedi, Moasing and baby Keith, and most importantly, Mum.

InterOil’s LNG project - early benefits and revenue transparency

PORT MORESBY, Tuesday November 3, 2009: INTEROIL Corporation believes that its proposed LNG project would provide attractive revenue streams to Papua New Guinea before 2014.

InterOil discussed the nature of these revenue streams in the company’s presentation at the PNG Chamber of Mines and Petroleum conference held at the Crown Plaza Hotel in Port Moresby, Papua New Guinea between October 27 and 30.

In the presentation, InterOil described its upstream oil and gas production business segment and its separate proposed midstream LNG tolling plant business segment which form a non-integrated project structure.

The Company believes that such a structure, with its clear lines of demarcation between upstream and midstream segments, provides revenues to the country on a transparent basis while also potentially providing those revenues earlier to PNG’s various levels of government and to landowners.

“InterOil is aiming to bring on stream a liquids stripping plant, to be located in Gulf Province, on stream in late 2011/2012 while the LNG plant is still being built,” the company presentation by CEO Phil Mulacek said.

 “The plant will extract the liquid condensate from the gas, reinject the gas back into the reservoir, and transport the liquids to its refinery or for sale in the open market.

“The advantage for landowners, provincial governments and the PNG state is taxes and royalties would start flowing earlier into their respective coffers,” Mulacek said.

“All upstream stakeholders benefit from the early condensate/oil production through direct 20.5% government ownership and 2% landowner royalty payments.

“Additional revenue is generated by the PNG government through the 30% company tax rate.

“When the LNG plant begins its operations in late 2014/2015, all upstream stakeholders will benefit from increased condensate production, natural gas production and associated profits taxes as it occurs due to InterOil’s non-integrated project structure.

“Additionally, LNG plant stakeholders would benefit from a separate stream of revenue and profit tax from the midstream LNG plant.

“The separate revenue streams provide increased transparency when compared with an integrated project structure.

“Based on current forecasts of production and commodity prices, 94% of the total revenues from InterOil’s project to the PNG government will be derived from the production of oil and gas during the first ten years. 

“Production from the Elk/Antelope field provides revenue security to PNG and early cash flows for the State, provincial governments and landowners potentially beginning in 2011/2012 from early liquids production.

“The InterOil LNG project would provide direct and indirect benefits to PNG. 

“The InterOil LNG project is not in direct competition with the PNG LNG project but rather adds additional revenue security to PNG.

“Delay of the LNG Project Agreement will risk the revenue diversity to PNG citizens and the momentum for a stronger LNG industry in Papua New Guinea,” Mulacek said.

 For further information please contact

 Susuve Laumaea

Senior Manager (Media Relations)

InterOil Corporation

Ph: (675) 321 7040

Mobile: 675-76845168 or 675-72013870

Email:susuve.laumaea@interoil.com ; slaumaea@digicelpacific.blackberry.com

InterOil replies to Sydney Morning Herald article

In today’s Page 5 of the Sydney Morning Herald Business Day reporter Clancy Yeates report on Resources under the headline “Doubt cast on Canadians’ ambitious PNG plan” mistruths were rampant throughout the article. InterOil sees it quite strange why a Sydney newspaper with Oil Search shareholding would write about InterOil without contacting senior management of InterOil about the real facts. InterOil’s responses to each paragraph of the article is hereby highlighted in red.  – Susuve Laumaea.

AN OIL refiner hoping to exploit the region's gas boom, Canada's InterOil, faces a wave of scepticism over its plans to export liquefied natural gas from Papua New Guinea.

There is no wave of skepticism. The only skeptics are Oil Search investors that are losing money and have been misled by false information provided by Oil Search. The false information regarding the productivity and resource estimates resulting from our wells has turned out to be not true.

InterOil, which has its regional base in Cairns and RBS Australia as adviser, aims to build a second LNG plant in PNG alongside ExxonMobil's $US12.5 billion ($13.6 billion) venture with Oil Search.

The Exxon led PNG LNG project is now a $15 billion dollar project. InterOil does not intend to build alongside Exxon. InterOil tends to build on government owned land on which it has a 99 year lease alongside its 100% owned oil refinery, where it has a jetty system and harbor rights to the only deep water protected port on the coastline.

The company has lofty ambitions to build a similar sized plant to export 8 million tonnes of gas a year through two production units, or trains, for just $US6 billion. It aims to sell its first shipment as soon as 2014.

Not lofty at all, look at the Hunt Project in Peru, built for $5 billion.

However, some Australian industry insiders and analysts are doubtful whether InterOil has enough gas. The group has no certified reserves, but it has detected gas flow rates at the Elk/Antelope field that it says are the strongest recorded in PNG.

We have certified resources that can not be called proven reserves until we reach FID (final investment decision). Industry insiders and analysts understand this, it is the same for all companies.

In the highest-case scenario from an independent evaluator, InterOil hopes to find reserves of 4.73 trillion cubic feet (tcf), but analysts contacted by BusinessDay said this looked marginal for one train, let alone two.

Our most up to date resource estimate, which includes the results from Antelope-1 is 6.1Tcf of gas and 100 MMbbls of condensate (or 6.7 Tcfe) plenty enough for one train by any standard and well on the way for a two train project.

In comparison, Woodside's Pluto 2 project off Western Australia will require up to 5.1 tcf of gas for one train and 10.2 tcf for two.

The market is also edgy because the geology around InterOil's oil and gas assets is different from the area where Exxon and 34 per cent partner Oil Search are planning their LNG plant.

The market is not edgy at all!! InterOil shares have been one of the best performing stocks on the New York Stock Exchange in 2009. Morgan Stanley recently recommended the shares as a buy. Our reservoir is many fold better that the higher cost and lower productivity wells being drilled in the highlands.

''It's a new area and it does not have the production history of the Southern Highlands, where Oil Search is,'' said an analyst who asked not to be named.

Who is this analyst that hides behind anonymity? Just because a resource is new does not make it inferior. Simply comparing InterOil’s well productivity and the proximity to the proposed plant, would lead any competent industry insider or analyst to conclude InterOil has the superior project.

A website, InterNoOil.com has sprung up attacking the company's claims.

This website was created by a convicted felon who admits to being short InterOil shares. The website made these claims months ago and the market has seen through the ill intent of a stock manipulator.

An InterOil spokesman rejected the criticism and said the company was on track to deliver LNG, adding that scepticism appeared to have come from its competitors.

''We have no reason to believe that we won't have sufficient [gas] to underpin a minimum of one and possibly two trains,'' the spokesman said.

In March, InterOil opened its data room and retained RBS and BNP Paribas to sell a project stake of up to 25 per cent, but it has yet to sign up a big partner.

In March InterOil hired RBS and BNP Paribas, in June InterOil opened its data room. InterOil is planning to test the condensate levels at the base of the gas column and the potential for a commercial oil discovery following the oil recovery in the Antelope-1 well. InterOil will not sell any interest until it has completed the testing in the Antelope-2 well which has been designed to capture this most important valuation information. The Antelope-2 well has already confirmed the extension of the dolomitized reef 2.3 miles from Antelope-1 and encountered the limestone 345 feet higher than estimated further increasing the size of the discovery. The condensate and oil potential will be determined over the next few weeks.

The refiner, listed on the New York stock exchange, has seen its market value almost quadruple this year after discoveries in PNG.Despite local scepticism, US analysts have said booking reserves was not essential for making a final investment decision on an LNG project, as the rival Exxon project had booked only minimal reserves.

 

 

University of Goroka addressing Outcome Based Education through workshops

Caption: Curriculum & Instruction staff from UOG participating in a group work session with volunteer staff member and workshop co-facilitator Mr Don Herron at the workshop held last Friday (30th October 2009).-Picture by KATE GUNN

 

By KATE GUNN of University of Goroka

The University of Goroka (UOG) is on track to addressing the government’s plan for Outcomes Based Education (OBE) in Papua New Guinea.

 In a series of workshops conducted by the Curriculum and Teaching Department of the Education Faculty, academic staff are actively producing a roadmap to guide and improve teacher training at the UOG, based on the OBE approach to education.

Curriculum and Instruction lecturers at UOG have participated in two workshops so far aimed at producing “competent, knowledgeable and quality teacher graduates” as stated by the Vision of the University. 

This is ultimately aimed at the development of a common curriculum to be taught to UOG students so that they may reflect the OBE approach when teaching out in the field. 

This will be comprised of the planning, organisation, programming and assessment on curriculum in all subjects in schools. 

This will be achieved through specific outcomes-based units and topics, along with assessment and teaching also being outcomes-based.

Teaching skills and methods such as peer group teaching, micro teaching and teaching practice will also influence the desired outcomes. 

This is ultimately to build skills and knowledge through experience before teaching OBE to students of UOG. 

Sessions of the first workshop held on Friday 23rd October 2009 covered topics such as what is outcome based education; international perspectives of OBE; planning with outcomes; assessing with outcomes in a comprehensive introduction for curriculum and instruction lecturers to acquaint them with the OBE approach to education.

 In opening the workshop the Vice Chancellor of the University of Goroka Dr Gairo Onagi stated: “UOG is passionate about curriculum and instruction…and teaching students to teach well.”

  Dr Onagi also encouraged staff to lift their game and not relegate curriculum and instruction duties to junior staff, for the best delivery to UOG students.

In the second consecutive workshop held on Friday 30th October 2009, UOG staff worked to identify common areas to teach students via different strands for the common curriculum.

 Staff also examined and discussed the teaching skills and methods which factor in OBE as a scaffold to classroom practice. 

This was to “make sure there’s integration and connection” said Mr Teng Waninga Head of Department and lecturer in the Curriculum and Teaching Department of UOG and co-facilitator of the workshops with volunteer staff member Mr Don Herron also of the same department of the Education Faculty. 

The workshop also included staff doing group work where they had discussions to identify the qualities and outcomes of UOG graduates taught the OBE approach.

The third and final workshop is planned for the near future. 

Fiji AG self -destructs on media freedom: PFF

Fiji's Attorney General Aiyaz Sayed-Khaiyum has erased his own credibility with 'delusional' notions that Fiji has a free media, says regional media watchdog the Pacific Freedom Forum.

According to media reports, Khaiyum told a regional journalism seminar at the University of the South Pacific on Friday 31st October Fiji's media were free to report on any issue, asking  “Is there a

restriction? Are journalists being locked up? Are journalists being told what to write? No!"

But in the same presentation on the Public Emergency Regulations (PER) introduced in April 2009, he admitted the "fundamental issue as far as the media control at the moment is concerned is that you do not have politicians being reported."

"The fact that his monologue went unchallenged by his audience only proves that self-censorship is thriving under the PER. An AG who claims journalists have not been restricted, locked up, or told what

to write is clearly deluded and out of touch with reality," says PFF Chair Susuve Lauamaea of PNG.

The latest global media freedom index compiled by global watchdog Reporters Sans Frontiers has Fiji ranked 152 out of 175 nations. In 2008, Fiji ranked 79th.

"We can only stand in solidarity and sympathy for those who organised the debate, and offer our input and engagement to help build

understanding amongst the regime leadership that the right to freedom of expression and speech has specific universal indicators which can't be mucked around with."

"The Pacific Freedom Forum and our networks warmly congratulate Fiji Times, for their  award winning free speech campaign as announced on Friday night in Australia," says co-chair Monica Miller of American Samoa.

"The irony for us all is that only a few hours before this cause for celebration, the regime AG in Fiji went public saying the media is free to report anything - so long as they don't report on the leadership. In saying that, he proved so powerfully why Fiji Times deserve the award, and our continued support."

 

Papua New Guinea are the champions

Papua New Guinea today gave a rugby league lesson to Cook Islands and qualified for next year’s Four Nation’s Cup with a 42-14 trouncing in the SP Brewery Pacific Cup grand final at the Lloyd Robson Oval in Port Moresby.

Watched by a fullhouse patriotic crowd, which included Prime Minister Sir Michael Somare as well as Governor General Sir Paulias Matane, the Kumuls showed all and sundry that their bid for the Australian NRL competition was no joke with an eight tries to three romp.

Fullback David Mead, later named man-of-the-match, capped off a five-star performance with a three-try haul.

A dazzling 60^th minute try by the scintillating 20-year-old showed his sheer class as he had the Cook Islands in sixes and sevens all over the paddock.

“Everything went well today,” he said before before swamped by hundreds of adoring fans, in scenes that resembled Beatlemania

“We’ve been training very hard for the last three to four weeks.”

The Kumuls, fired up after their 44-14 thrashing of Tonga last Sunday, had too much all-round strength and was supported by an expected sellout patriotic crowd.

They were led capably by their UK-based contingent of Menzie Yere, Jason Chan and John Wilshere.

The class of PNG shone all over the paddock through the UK trio,  Mead, halves Dion Aye and Keith Peter, props Rodney Pora and James Nightingale, “white shark” hooker Jay Aston, utility Charlie Wabo, and backrowers Chan and Siegfried Gande.

Cooks Islands came in with all guns firing and, from the outset, looked set to cause another David v Goliath epic as they had so convincingly done over the last two weeks against Samoa in Australia and then Fiji in their Pacific Cup game last weekend.

The Kumuls drew first blood in the 11^th minute with a try to winger Richard Kambo, off a brilliant offload from Mead, and with the extras from Wilshere, were flying high 6-0.

A 15^th minute touchdown from Mead brought PNG ahead to 10-0, however, Cook Islands’ fighting spirit was epitomised after that with quick tries to halfback Daniel Fepuleai in the 24^th minute and another three minutes later to centre Keith Ualia to tie the scores at 10-10 and set the stage for a thrilling showdown.

Centre Anthon Kui, however, had other ideas as he scored in the 32^nd minute to put the Kumuls ahead, and with another from Mead, the home side led 20-10 at the break.

At resumption, it was basically all one-way traffic as PNG piled on with tries to centre Yere (49 min), Mead (56 min), Kambo (62 min) and Yere (71 min) for an unassailable 42-10 lead.

Cook Islands allowed agro to creep into their game, and this cost them dearly in the last 10 minutes, although they had some consolation with a high-flying try to winger Domique Peyroux.

Cook Islands’ captain, Tere Glassie, shed tears after the game, while coach, Australian David Fairleigh, remarked: “Congratulations to PNG.

“We wish you all the best in the Four Nation’s.

“We have no NRL experience.

“Hopefully, this will give us something to build on.”

But while it was tears in the Cook camp, all celebrations for PNG, as hundreds of fans – in unforgettable scenes - swamped on to the field and carried their heroes, posed for photographs, as well as asked for autographs.

“Thank you for all your support this afternoon,” said captain Wilshere, who, apart from the hundreds, had his own legion of fans from his Butibam village in Lae.

“Rugby league’s our sport and we love it.

“The Four Nation’s will be a tremendous boost for our country.”

Coach Adrian gave a vote-of-thanks to the PNG crowd for their unwavering support over the years.

“We’re improving year by year,” he said.

“Young players are coming in all the time.

“Mi hamamas long yupela sapotim mipela long last tu wiks (I’m happy with your support over the last two weeks).”

PNG 42 (Mead 3, Kambo 2, Yere 2, Kui tries; Wilshere 6 goals) bt Cook Islands 14 (Fepuleai, Lulia, Peryoux tries; Ben Taia goa).