InterOil delays FID to push Elk/Antelope plan
The National,Friday23 December 2011
INTEROIL Corp last night decided to delay its financial investment decision (FID) to develop the Elk/Antelope gas fields prompting doubts on whether it was still keen on the project.
InterOil’s agreement with Flex LNG Ltd and Samsung Heavy Industries for the construction and operation of a floating LNG plant also lapsed and it is not certain if it will ever be salvaged.
The company promised on numerous occasions this year that it would reach FID by the year’s end, however last night it dashed those hopes and one senior government official commented that, “it may not even deliver a project.”
“We have a lot of doubt on whether InterOil will ever deliver a project. To start with, InterOil has no money to develop the project alone. It was supposed to come up with a major LNG company as a partner, it hasn’t done that yet as demanded by the government,” the official said.
InterOil said however, that it extended the dates by which certain conditions were to be met and FID made in LNG project agreements with Mitsui and Energy World Corp, until March 31 next year.
The terms of the project funding and construction agreement (PFCA) and shareholder agreement entered into last February with Energy World Corp Ltd governing the parameters in respect of the development, construction, financing and operation of a planned three million tonne per annum (mtpa) land-based LNG plant in the Gulf province had been amended so that the date by which conditions were to be met and FID reached has been extended until March 31 next year.
It said the joint venture operating agreement (JVOA) for the company’s proposed condensate stripping lant (CSP) with Mitsui & Co, Ltd and associated agreements, had also been amended so that the time allowed for FID has been extended until March 31, next year.
The JVOA sets out the rights and obligations of the participants of the joint venture to develop a CSP at InterOil’s Elk and Antelope field site.
InterOil said its with Samsung Heavy Industries and FLEX LNG Ltd related to the construction and operation of a 2 million tonne per annum (mtpa) floating liquefied natural gas (LNG) processing vessel (FLNG) which contemplated achieving FID by year end has lapsed.
InterOil and FLEX are continuing negotiation with a view towards updating the agreement and working toward FID during the first quarter of 2012.
On the baisi of this news item i cannot see how the price of ioc will not fall. yes they will spud before the end of the year to retain their license but it will be the case of announce spud and then wait three months before all the drilling equipment is mobilized to site.
i hope phul and his team pull it off, i cannot see how! good luck to the investors who remain in this dog stock. dont blame phil - everyone had a chance to exit but greed may have got the better of some. blame yourself for worshipping the 'golden bull'!