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By Baeau Tai

PORT MORESBY, Papua New Guinea (The National, July 31) - Shell
PNG ceased retailing activities last year in Wewak, where a booming economy has
left East Sepik Province severely short of fuel supplies.

Shell's commercial manager Peter Walsh told The National his
company is working with the Independent Consumer and Competition Commission (ICCC)
and other industry members to plan a transition to local supply once the Napa
Napa oil refinery in Port Moresby commences production next year.

The K800 million refinery is being built by InterOil, which has
an agreement in place under which Shell will purchase the majority of refinery
production, comprising 100 per cent of Shell's PNG refined product needs and
most of the refinery's export capacity. 

The Shell contract, for an initial period of three years, has an
estimated market value of US$1.4 billion.

Under the deal InterOil will own the Shell petrol network but
Shell will continue to manage and run these outlets.

Mr Walsh said Shell decided to cease its retailing activities
because it "lost its service stations" to another supplier.

However, its "other PNG operations are not affected by its
withdrawal from Wewak, and Shell will continue to service the PNG

"Further reductions in Shell's depot volumes have resulted
in a decision to close the depot and Shell will continue to provide aviation
refueling services at Wewak airport," Mr Walsh said, adding that instead of
providing supplies from overseas, the products will come from Napa Napa. 

Petroleum products Shell will obtain from InterOil's local
refinery will include petrol, diesel, kerosene and jet fuel.

August 1, 2003

The National: 


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