ChevronTexaco puts Papua New Guinea interests on market
US oil and gas giant ChevronTexaco, once the leading proponent of a Papua New Guinea to Queensland gas pipeline, has
put its Papua New Guinea interests on the market. But speculation that Santos is about to snap up Chevron's interests
appears wide of the mark -- with a non-US international player said to have an exclusive agreement with Chevron to do
due diligence.
Responding to speculation that it was the likely buyer of Chevron's interests, centred on the Kutubu and Gobe oil
fields, Santos said that "it has not made an offer, not made a bid and not negotiated with ChevronTexaco for their
Papua New Guinea assets". And industry sources indicated that for the time being an international player, possibly
from Asia, currently had the front running. Japan's Nippon Oil and Chinese oil companies are believed to have
expressed an interest.
Santos may well be interested, if current negotiations fail. And the other major local player in PNG, Oil Search,
would also take a look -- though it would be much more interested in Chevron's operatorship in Papua New Guinea and
could be hard pressed to find the $ 200-$ 300 mm Chevron is said to be asking.
Meanwhile, although Chevron's decision to leave Papua New Guinea, where it has been a player for about two decades,
is another blow to the Papua New Guinea-Queensland pipeline dream, the company has been a bystander since it lost
operatorship two years ago to Exxon, and speaks for only about 8 % of the project. And it has bigger fish to fry in
the region, on the North-West Shelf.
But its decision to quit must raise doubts about Exxon's Papua New Guinea commitment -- Exxon having recently decided
to sell out of the Cooper Basin, after that gas province and Esso-BHP Bass Strait fields lined up long-term contracts
to supply the Australian Gas Light company's Sydney and Victorian markets -- contracts that replaced the key AGL
agreement to take PNG gas.
And as with Chevron, PNG makes up only a tiny part of Exxon's international oil and gas portfolio.
