• 5 minutes Iran Says It Arrested 17 CIA Spies, Some Sentenced To Death
  • 9 minutes Will We Ever See 100$+ OIL?
  • 13 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 1 hour Iran Loses $130,000,000 Oil Revenue Every Day They Continue Their Games . . . .Opportunity Lost . . . Will Never Get It Back. . . . . LOL .
  • 14 hours Oil Giant Saudi Arabia Is Set to Start First Wind-Power Plant
  • 45 mins Renewables provided only about 4% of total global energy needs in 2018
  • 8 hours How is E&P of Marginal Oil on the UKCS Similar to the Shale Oil Operations in the US?
  • 1 hour So You Think We’re Reducing Fossil Fuel? — Think Again
  • 2 hours N.Y. Governor Signs Climate Bill
  • 9 hours Berkeley becomes first U.S. city to ban natural gas in new homes
  • 13 hours EIA Reports Are Fraudulent : EIA Is Conspiring With Trump To Keep Oil Prices Low
  • 3 hours U.S. Administration Moves To End Asylum Protections For Central Americans
  • 24 hours First limpet mines . . . . now fly a drone at low altitude directly at U.S. Navy ship. Think Iran wanted it taken out ? Maybe ? YES
  • 23 hours Today in Energy
  • 20 hours Which is a better domain name for OAPEC?
  • 17 hours Shale Oil will it self destruct?
Alt Text

Why Natural Gas Prices Collapsed

Natural gas prices have collapsed…

Alt Text

Is This The Last Bottleneck For Nord Stream 2?

The controversial Nord Stream 2…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Does This $2.2 Billion Deal Reveal Where The NatGas Sector Is Going?

Lots going on in the global natural gas sector this week, with Argentina unveiling on Friday a very attractive fixed price of $7.50/MMBtu through to end 2018, and Israel’s government announcing on Sunday a new plan to fast-track the Leviathan offshore mega-project. But perhaps the biggest news in natgas came from a completely different part of the world. Papua New Guinea.

That’s where Australia’s Oil Search Ltd. announced on Friday one of the largest M&A deals seen in recent memory for oil and gas. The firm said it will bid $2.2 billion for PNG natural gas developer Interoil Corp. Related: OPEC Head Calls for $65 Oil

This is a big acquisition — in a time when most E&Ps are shying away from buying assets. But looking at the numbers behind the deal, there’s a strong logic here for Oil Search. The Interoil assets that Oil Search will acquire include 6.2 trillion cubic feet of reserves in the Elk-Antelope fields of eastern PNG. These fields are critical in feeding into the Papua liquefied natural gas (LNG) export project, an operation being developed by Interoil and partner Total.

Oil Search isn’t far from this story - owning a 29 percent stake in the nearby PNG LNG project, which is already in operation under the guidance of ExxonMobil. By acquiring Interoil, Oil Search will now gain a 29 percent interest in the new Total-operated project. In effect, Oil Search is spending $2.2 billion to double-down on PNG natgas. Likely because of this area’s proximity to the world’s top natural gas market: Asia. Related: Why Cheap Shale Gas Will End Soon

PNG is one of the shortest sails to Asia in terms of LNG-supplying nations. And as the chart below of global natgas pricing shows, Asia is the place to be today when it comes to selling natgas — with prices in the region last year averaging a world-leading $8/MMBtu.

Source: International Gas Union

All of which shows there’s still a lot of interest in the right oil and gas projects, even amid today’s depressed global market. Location and regional pricing is key — watch for the strongest and most well-positioned projects to start separating from the pack in terms of value.

Here’s to picking your spots,

By Dave Forest

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play