Total has announced the signature of a farm-in agreement with InterOil Corporation that gives it a 61.3% interest in Petroleum Retention License (PRL) 15 in Papua New Guinea. Two of the biggest discoveries in the Asia-Pacific region in recent years, The Elk and Antelope gas fields, were found in the licence in 2006 and 2009 respectively.
Total and InterOil Corporation retain the flexibility to farm-down an aggregate of up to a 19.3% interest (before any election by the government to exercise its option to join the project with a 22.5% interest) to a strategic partner.
Total, who will operate the project, and InterOil aim to complete the delineation of the two discoveries and to continue to explore for new resources in the license area. Depending on the results, this could lead to a final investment decision (FID) by 2016 for the development of the fields and the construction of a liquefaction plant located onshore on the Gulf of Papua.
In addition, Total has an option to take an interest in Petroleum Prospecting Licenses PPL 236, PPL 237 and PPL 238 in the same area.
Yves-Louis Darricarrère, President Upstream at Total, said: “Following Total’s entry into exploration in Papua New Guinea in 2012, this new acquisition of an interest in significant discovered resources is an exciting opportunity for Total to develop a new gas production and liquefaction hub in the Asia-Pacific region, where gas demand is very dynamic. Total will leverage its technology and experience in major LNG projects to reinforce its long-term production post-2020.”
Total will pay US$ 470 million for a 42% interest (32.5% if the government executes its option to join the project) with a contingent payment estimated by Total at approximately US$ 590 million. The transaction remains subject to the approval of the Papua New Guinea government.
Adapted from press release by Ted Monroe
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