INTEROIL, PETROMIN SIGN JOINT VENTURE IN PNG

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Tests reveal major ‘sweet spot’ gas fields

By Jason Som Kaut

PORT MORESBY, Papua New Guinea (The National, Nov. 3, 2008) - InterOil Corporation and State-owned Petromin PNG Holdings have signed a multi-million kina deal to be partners in developing InterOil’s PNG assets, in particular the Elk-Antelope gas fields.

Under the deal, Petromin will now be directly involved in upstream development in the petroleum sector. The partnership could also see it participate in the country’s next LNG project, should all go to plan.

This follows some exciting discoveries at InterOil’s Elk-Antelope gas fields, which are expected to underpin the venture.

Tests are still ongoing but initial signs are that the "sweet spot" find has the potential to be one of the biggest in the world in terms of the number of wells and total supply.

The two entities are still in discussions and are expected to make further announcements later.

The Investment Agreement, which was signed last Thursday, will see Petromin directly participating in PPL 238, and particularly in the development of the Elk-Antelope gas fields.

Prime Minister and Minister responsible for Petromin Sir Michael Somare was on hand to witness the signing between Petromin CEO Joshua Kalinoe and chairman and CEO of InterOil Corporation, Phil Mulacek.

Under the agreement, Petromin will take a direct interest in the Elk-Antelope gas fields and will fund 20.5 percent of the costs of developing the fields.

Mr. Kalinoe said he was excited by this new opportunity for Petromin as it enabled the company to move forward in the upstream development in the sector and secure its stake in PNG’s second LNG project.

"This is a historical and strategic decision taken by the board of Petromin because we are now a participant in upstream petroleum development in the country.

"I would like to thank InterOil for having confidence in the country and in Petromin, allowing us to participate in the early stages of developing this PPL.

"We will be working together with InterOil and its other partners to transform the PPL into a PDL within the next 12 months," Kalinoe said.

Mr. Mulacek said InterOil was excited that Petromin, as a State entity, had agreed to take an interest in the Elk-Antelope fields

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