InterOil Corp. (IOC:US), the explorer in
talks with
Exxon Mobil Corp. (XOM:US) to develop natural gas discoveries
in Papua New Guinea, said negotiations are progressing with the
world’s largest energy company by market value.
“It’s moving along nicely,” said Michael Hession, the
former Woodside Petroleum Ltd. (WPL) executive named yesterday as
InterOil’s chief executive officer. “I’m not disturbed in any
way, shape or form. I’d emphasize that Exxon and this
negotiation are going to be my number one priority.”
InterOil said in May that it started exclusive discussions
with Exxon to develop the gas fields in Papua New Guinea. Exxon
is interested in the assets because they may help expand the oil
producer’s $19 billion liquefied natural gas project in the
country, Mark Nolan, vice president for the Middle East and
Australia, told reporters in Brisbane in May.
Hession, who brought PetroChina Co., Mitsubishi Corp. (8058) and
Mitsui & Co. into Woodside’s Browse LNG project in Australia in
agreements reached last year, said he carried out extensive
research into InterOil before joining the company.
“I’ve been in discussions with InterOil for some months,
since before I left Woodside,” he said. “It has been a careful
and measured courtship.”
InterOil has been searching for international partners to
help fund a Papua New Guinea natural gas project since 2009,
when
Bank of America Corp. (BAC:US)’s Merrill Lynch sold its 35 percent
stake in the venture. Phil Mulacek, who founded the company,
retired as chief executive officer in April.
Partnership proposals
InterOil said in 2011 that it hired Morgan Stanley, UBS AG
and Macquarie Group Ltd. to evaluate partnership proposals.
Mulacek said in an October 2011 interview that he expected to
sign a partner by the end of that year.
Included in the discussions with Exxon is the potential
sale of a stake in a license that comprises the Elk and Antelope
fields, InterOil said. Hession declined to provide more
information about the talks or say when he expected the
negotiations to be completed.
Hession left his position overseeing Woodside’s Browse
venture in May after Australia’s second-biggest oil and gas
producer scrapped a plan to build the project at an onshore site
in Western Australia because it was too expensive. Woodside now
is considering using floating LNG technology to develop the
Browse project.
InterOil is incorporated in Canada’s Yukon, has offices in
Cairns, Australia and Singapore, and is traded in New York. Elk
and Antelope hold an estimated 9 trillion cubic feet of
recoverable gas, InterOil said in its 2012 annual report.