Foreign Correspondence

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Exxon Finalizes Agreements For Papua New Guinea LNG Project
Posted March 15, 2010 by Michael Davidson

Exxon Mobil has said that sales and purchase agreements with liquefied natural gas (LNG) buyers and financing arrangements with lenders are now complete and its affiliate, Esso Highlands, is proceeding with full execution of the Papua New Guinea (PNG) LNG project.

The company said that the integrated development includes gas production and processing facilities in the Southern Highlands and Western Provinces of Papua New Guinea; liquefaction and storage facilities with capacity of 6.6 million tons per year, located northwest of Port Moresby on the Gulf of Papua; and over 450 miles (700km) of pipelines connecting the facilities.

Participating interests include affiliates of ExxonMobil including Esso Highlands as operator (33.2%), Oil Search (29%), Independent Public Business (PNG government, 16.6%), Santos (13.5%), Nippon Oil Exploration (4.7%), Mineral Resources Development (PNG landowners, 2.8%) and Petromin PNG (0.2%).

The investment for the initial phase of the project, excluding shipping costs, is estimated at $15bn. First LNG deliveries are scheduled to begin in 2014, following a construction period of about four years.

Neil Duffin, president of ExxonMobil Development Company, said: “The project will be developed in compliance with the highest standards for health, safety, environmental and social safeguards and will maximize the value of the resource, supporting the PNG government’s objective to strengthen its economy and infrastructure base for the benefit of its people.

“The comprehensive national content plan focuses on development of the local workforce, expansion of supplier capability, and strategic community investment.”

The company said that funding for the PNG LNG project will come from the co-venturers and through market-rate loans arranged with export credit agencies and commercial sources.

In May 2009, the Independent State of Papua New Guinea, representatives of project area landowners, and four provincial and 10 local-level governments approved the PNG LNG Umbrella Benefits Sharing Agreement, confirming support from landowners and all levels of PNG government.

The agreement outlines the sharing of revenue streams from royalties, development taxes and equity dividends totaling between $5.6bn-7.5bn (15bn-20bn PNG kina) over the project life.

The government of Papua New Guinea, through its Department of Environment and Conservation, approved the project's environmental impact statement that reviewed factors such as community needs, sensitive environmental habitats, and biodiversity.

The project will supply four major LNG customers in the Asia region through long-term sales, including: CPC, Taiwan; Osaka Gas Company; The Tokyo Electric Power Company; and Unipec Asia Company, a subsidiary of China Petroleum and Chemical (Sinopec).
http://theenergycollective.com/michaeldavidson1/28219/exxon-finalizes-agreements-papua-new-guinea-lng-project

Related:

..excerpt .. On paper, the five big companies operating in the U.S. have an effective tax rate of around 40%, said Anne Mathias, director of research at MF Global's Washington Research Group.

That's considerably higher than the U.S. average of 28%, and would mean a company like Exxon Mobil has a higher tax rate than 90% of U.S. corporations.

But Mathias said what they actually pay tends to be lower than what they report as their "effective tax rate."

She said companies can use various accounting techniques to mask their true tax bill, including adding a lot of expenses to their U.S. income statement, chalking up more royalty payments as income taxes, or keeping profits offshore.

These moves make their true tax bill an open question. Some analysts said they bring it substantially
lower than 40%, other said they barely moved the needle.?Yes, 80% of our electricity can be 'clean' by 2035
http://news.findtarget.com/business/fighting_over_big_oils_4_billion_a_year_windfall/
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Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=60027182&txt2find=exxon

Also ..
Exxon's soaring profits come after similarly large increases at its rivals. Last week Chevron, the number two US oil firm, reported
a 72% rise in its fourth quarter earnings. Third placed ConocoPhillips reported a 46% rise for the fourth quarter.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=59381279&txt2find=chevron
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=60014366&txt2find=exxon