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.
..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/ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 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
Papua New Guinea's veteran Prime Minister Sir Michael Somare has stepped down from office because of ill health.
The 75-year-old leader, dominant in Papua New Guinea politics since the late 1960s, underwent heart surgery earlier this year in Singapore.
Sir Michael was appointed as prime minister in 1975, when the country gained independence from Australia.
It is not known when a decision will be made about a permanent successor. Sam Abal is the acting prime minister.
Sir Michael gained prominence initially as a leader in the independence movement before becoming country's first prime minister.
A chronic heart condition forced him to temporarily step down last December.
Then, this April he had to serve a two-week suspension from office when he was found guilty of official misconduct after failing to submit full financial statements in the 1990s.
Afterwards, he vowed to return as prime minister, but instead remained in Singapore where he has been receiving medical treatment.
Sir Michael's son, Arthur, said his father was critically ill following three heart operations, and had decided to step down permanently as prime minister and also to retire from politics.
The veteran leader's deputy, Sam Abal, has been the acting prime minister.
Earlier this month he sacked two of his leading rivals - the country's foreign minister and its energy minister - in what was seen as a move to consolidate his position.
Recently, Mr Abal's 21-year-old son was accused of murder after the body of a woman was discovered in the banana garden of the family home in the capital Port Moresby.
National elections are not expected until the middle of next year.
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