Total to Pay $401 Million to InterOil in Revised PNG Gas DealJames Paton
Total SA, Europe’s third-largest oil producer, completed a revised agreement to acquire a stake in InterOil Corp.’s natural gas discoveries in the Pacific nation of Papua New Guinea for an initial $401 million.
Total acquired 40.1 percent of the exploration license containing the Elk and Antelope gas fields, InterOil said today in a statement. InterOil will keep 35.5 percent of the project and receive $73 million when an investment decision is made to go ahead with a liquefied natural gas project and $65 million when shipments begin, according to the statement. InterOil also will get payments depending on gas volumes, it said.
The plan to liquefy gas for export to overseas customers would follow Exxon Mobil Corp.’s $19 billion LNG venture in Papua New Guinea, which is proceeding along with seven others in Australia to tap increasing demand in Asia. Exxon’s partner, Oil Search Ltd., agreed last month to purchase 22.8 percent of the Elk and Antelope license for an initial $900 million.
“The agreement clears the way for cooperative joint venturers, who all share the government’s wish to monetize Elk-Antelope as quickly as possible through the fast-growing Asian market,” InterOil Chief Executive Officer Michael Hession said in the statement.
InterOil in an initial agreement in December agreed to sell Total a 61.3 percent stake. Payments to InterOil in that accord included $613 million on its completion. InterOil priced the total deal in December at $1.5 billion to $3.6 billion.