"We declare our first goal to be for every person to be dynamically involved in the process of freeing himself or herself from every form of domination or oppression so that each man or woman will have the opportunity to develop as a whole person in relationship with others".

- Papua New Guinea National Goals and Directive Principles

Tuesday, 16 August 2016

Protesting PNG landowners close to turning off tap for LNG Project

12:35 pm on 12 August 2016
RNZI / Johnny Blades

A government delegation is due in Papua New Guinea's Hela province today to respond to disgruntled Highlands landowners threatening a shutdown of the country's major LNG (Liquefied Natural Gas) project.
The project's gas conditioning plant in the hides area of this highlands province remains locked by landowners protesting that the government owes five years worth of project commitments worth hundreds of millions of dollars.
The project developer ExxonMobil said its facilities were continuing to operate and that it was monitoring the peaceful protest in Hela.
A deployment of extra police to Hela from the capital in recent days is a sign that the government is concerned about the landowner threat.
However, the government's initial response to the current protest did not satisfy the landowners.
Stanley Mamu from LNG Watch said a government delegation made a brief trip to Hela on Wednesday to talk with the landowners, and are expected back in Hela today with an ultimate response to their grievances.

"If the government cannot satisfy their petition, they will forcefully go inside and close down wellheads B, C and D... it's the well tap that supplies the gas."
Overnight, it emerged that more landowner groups from LNG Project areas in neighbouring Southern Highlands province have joined the Hela landowners in their protest.
Moran and Gobe landowners have also launched their own conditional demand for the government to make outstanding payments of royalties they claim are owed to them.
They have signed a demand paper giving a 21 day-ultimatum as of 10th August for the government to honour its outstanding commitments of around 14 million US dollars.
It's not the first time that landowners in this Highlands region have obstructed the project over their grievances over commitments or royalties owed however, this time the landowners appear less willing to accept the government response.
250 LNG shipments have reportedly been made since the project started exports two years ago, but landowners in four petroleum development license areas of Hela say they are yet to be paid as the founding project agreement.
"This sort of gate closure, we've never experienced that, from the beginning (of the LNG Project) until now," said Stanley Mamu.
He said the proliferation of firearms among some Hela landowners was a concern, especially with PNG security forces looming as a response to the Hides protest.
On Tuesday, the Minister of Petroleum and Energy Nixon Duban said delays in payments to the landowners in the Hela LNG area were due to complications over identifying genuine landowners.
He said paying royalties to the wrong people would have consequences which the government wanted to avoid.
In parliament yesterday, the prime minister Peter O'Neill said that all outstanding payments will be made to the landowners, but didn't give a time frame.
Exxon meanwhile said it respected the right of individuals to peacefully protest, but also encouraged "continued dialogue between landowners and the government to resolve their outstanding issues promptly".

Landowner blockade still in force at PNG LNG project

12:55 pm on 15 August 2016 

Reports from Papua New Guinea's Hela province say landowners continue to block access to a key site in the ExxonMobil-operated LNG gas project.
The project's gas conditioning plant at Hides remains locked by landowners protesting that the government owes five years of outstanding project commitments worth hundreds of millions of dollars.
They had threatened to shut down the entire LNG project this month if government didn't respond adequately with payments.
Speaking in parliament last week, the prime minister Peter O'Neill said all outstanding payments would be made in due course, while a government delegation travelled to Hela last Wednesday for discussions with the landowners.
This delegation, including members of the state-owned Mineral Resources Development Company, sought to assure landowners that payments will be made, pending the outcome of ongoing clan vetting processes to establish the legitimate landowners.
Furthermore, landowner representatives met with the MRDC in Port Moresby at the weekend to discuss the petition outlining their grievances.
However landowners indicated the government response was unsatisfactory and they are expecting to receive another government delegation today or tomorrow for further talks.
The project developer ExxonMobil said last week its facilities were continuing to operate and that it was monitoring "the peaceful protest in Hela".
However, reports from Port Moresby suggest the latest export shipment from the LNG Project had only half as much gas as usual, due to obstruction in the flow of LNG because of the Hela landowners' actions.
Meanwhile, landowners from LNG Project areas in neighbouring Southern Highlands province have indicated they wish to join the Hela landowners' protest as they too claim to be owed significant amounts of benefits.
An extra contingent of PNG police was deployed to Hela last week amid fears that landowner grievances could spill over into violence.

Wednesday, 3 August 2016

UBS Cuts Price Target on ExxonMobil (XOM) to $86; Remains Neutral

UBS maintained a Neutral rating on ExxonMobil (NYSE: XOM), and cut the price target to $86.00 (from $90.00), following the company's 2Q earnings report and conference call.
Analyst William Featherston commented, "1) reiterated 2016 capex guidance of $23.2bn (down 25% YoY) but inferred spending would likely come in below budget due to market savings, efficiency gains, & commencing projects on time & on budget; 2) made no change to its 2016 production growth range of ~4.0-4.2 MMBoed (flat YoY); 3) initial seismic images of Skipjack point to comparable resource potential as its Liza discovery (0.8-1.4 BBoe) offshore Guyana; 4) noted there is a "strong case" that the gas from the recent InterOil acquisition in Papua New Guinea will ultimately go to its existing facility at PNG LNG (rather than a separate LNG project); & 5) we lowered 2016-17E EPS from $2.79/$3.77 to $2.38/$3.59 on lower Upstream earnings for 2016 & Downstream earnings for 2017."

Thursday, 28 July 2016

Oil Search said in a statement it’s talking with Total about its options and that it’s entitled to a $60 million break-up fee, with 20 percent going to Total, if the deal doesn’t go through after InterOil changed its recommendation.

“InterOil has advised that it intends to make a change in its recommendation and enter into an Arrangement Agreement with ExxonMobil,” Oil Search said in a statement.
Exxon is targeting gas fields that hold enough reserves to supply the U.K. for three years. The company already operates the existing $19 billion PNG LNG gas-liquefaction plant in Papua New Guinea. InterOil and its partners have planned the nation’s second export project, Papua LNG. Oil Search is a shareholder in both ventures and has encouraged a tie-up to lower development costs.

Lower Cost

“ExxonMobil has submitted an offer to acquire InterOil Corporation, which we believe represents a superior proposal,” Exxon said in a statement.
Oil Search rose as much as 4.2% to A$7.27 in Sydney before trading at A$7.22 at 3:43 p.m. local time.
Papua New Guinea has lower costs than rival LNG sources, making it a more-attractive place to invest in an oversupplied market for the seaborne fuel. A deal for InterOil could speed up a boom in fuel sales from the nation, which began exporting LNG in 2014.
InterOil’s gas fields are closer to the coastal site of its proposed LNG plant and the pipeline that would feed it cuts through a less densely populated region than Exxon’s, which pipes its supply down from the country’s highlands, according to a presentation published on InterOil’s website.

Project Partners

“PNG’s lower costs are largely driven by the downstream. The cost of constructing the LNG facility is lower because labor is cheaper and site preparation is easier,” Matt Howell, a Perth, Australia-based research analyst for energy consultant Wood Mackenzie Ltd., said by e-mail. “In the case of Elk-Antelope, the fields are also nearer to the LNG facilities and the conditions in that area are a lot kinder, which lowers midstream and upstream costs.”
Oil Search is already a partner in both Exxon’s PNG LNG venture as well as Papua LNG. The Oil Search deal may save the country’s two projects as much as $3 billion and speed up development if they cooperate, according to Managing Director Peter Botten. After buying InterOil, Oil Search planned to sell 60 percent of the assets to Total.

InterOil’s appraisal of the fields found 10.2 trillion cubic feet of likely reserves at the end of 2015. Oil Search released results Friday of a separate analysis of those fields that estimated likely reserves at 6.4 trillion cubic feet. Oil Search said it would do a different analysis if it were to purchase InterOil that would include gas condensate volumes and another appraisal well that could unlock an additional 1 trillion to 2 trillion cubic feet of gas.

Exxon has pursued InterOil’s assets in the past. In May 2013, the energy explorer entered into exclusive talks to acquire a stake in InterOil’s Papua New Guinea discoveries, estimated at the time to hold the equivalent of 9 trillion cubic feet of recoverable gas. The talks collapsed later that year for undisclosed reasons.