PETROMIN NEWS

Petromin and InterOil Corporation sign HoA with China National Offshore Oil Corporation

Petromin PNG Holdings Limited and InterOil Corporation have signed a Heads of Agreement (HoA) for commercial cooperation with China's national company, China National Offshore Oil Corporation (CNOOC). The HoA was executed on Wednesday in Beijing following the official talks between the Chinese Premier, Wen Jiabao and Papua New Guinea's Prime Minister Grand Chief Sir Michael Somare. Both Mr. Wen and Prime Minister Somare witnessed the signing which is viewed as one of the major achievements of the Prime Minister's official visit to China.

Both InterOil and Petromin have commenced discussions with a number of major oil and gas companies to bring in a strategic partner to the InterOil project who will underwrite the project. The HoA now allows CNOOC to participate in that process.

More significantly, the HoA provides for CNOOC to discuss the terms on which it will provide a carry for Petromin in respect of the financing of the State’s equity in the project.

Petromin's Managing Director, Joshua Kalinoe said the parties have committed to quickly agreeing the commercial terms for this financing and to entering into binding arrangements as soon as possible.

Mr. Kalinoe said he was excited about the progress to date on the financing arrangements and thanked the Government, in particular the Prime Minister Grand Chief Sir Michael Somare, for the support and political leadership that he has provided for the InterOil led project to date, in his capacity as Minister responsible for Petromin.

Mr. Kalinoe observed; “For Petromin and the people of Papua New Guinea, this is a major project where the benefits will flow throughout the national economy. Petromin, as the national petroleum and mining company will hold equity in the gas field and the LNG plant for the benefit of all the people of Papua New Guinea”.

He added that CNOOC and InterOil have given undertakings to work with Petromin to assist Petromin to build capacity and experience in all facets of the project and to create jobs, skills training and long term economic benefits for as many Papua New Guineans as possible. As an example Petromin has the option of co-marketing the State’s share of the LNG. This will develop marketing expertise which will have on-going relevance as new oil and gas resources are located and developed.