Workers Stage Protest at PNG LNG

Reported on the NBC News Facebook Page, 22/08/2011

Workers at the PNG LNG project plant site at Lealea are staging a protest, raising concerns about their pay rates. Many of workers at portion 152, outside Port Moresby, are landowners who have been employed by contractors and sub-contractors in the project.They were up as early as five o'clock this morning, and blocked the gates of the construction site in a sit-in protest, over their alleged unfair treatment by their employers.

They demanded that those responsible come down to address their grievances. Police arrived at the scene to ensure peace, and tried to instill some understanding with the workers, but to no avail. A spokesman, Robert Kauga, speaking on NBC's Malolo program this afternoon, says all gates to the plant site are locked

ExxonMobil Selling Gas Assets At Center Of Indonesia Human-Rights Case

When being suited, it is always good to know the past conduct of your partner. In the first of two articles, Isabella Ordonez reports on Exxon Mobil’s conduct in Indonesia following a case brought by villagers over serious human rights abuses (Dow Jones Newswire, 8/8/2011). The background of the case is summarised in the second article.

Exxon Mobil Corp. (XOM) said Monday it is selling some of its depleting natural gas assets in Indonesia's Aceh province, but will maintain a presence in the Southeast Asian country.

The properties being marketed have been at the center of a lawsuit brought by Indonesian villagers that seeks to hold ExxonMobil, the world's largest publicly-traded oil company, liable for alleged killings and torture committed by Indonesian soldiers guarding the assets. The lawsuit was thrown out by a trial judge in 2009, but a U.S. federal appeals court reinstated the case in early July, saying the suit had been wrongly dismissed.

The assets being offered include the Arun field and satellite fields, and the North Sumatra Offshore field. Gas production from these fields--which started in the late 1960s--has been dwindling, and last year they produced an annual average of 215 million cubic feet of gas a day plus associated liquids, the company said.

The gas from the fields is delivered to the Arun LNG processing plant, which is operated by Arun NGL--a joint venture between state-owned Pertamina, Mobil Indonesia LNG and Japan-Indonesia LNG Company.

Texas-based ExxonMobil said the decision to sell the assets is in line with its long-standing practice of continually reviewing assets for their contribution to the company.

ExxonMobil didn't immediately respond to requests for comments on whether the sale was also motivated by the recent reinstatement of the human-rights lawsuit.

The company said it continues to have an active presence in the exploration and production and refining and marketing sectors in the Southeast Asian country.

"Exxon Mobil continues to seek and evaluate new opportunities in Indonesia," the company said.

Its current projects in the country include the Cepu block, East Natuna and a coalbed-methane project being evaluated in Kalimantan. Last month, ExxonMobil said it was seeking partners for half of its interest in three blocks where the company is exploring for coalbed-methane in Kalimantan.

The Indonesians' lawsuit against Exxon dates back to 2001. A group of villagers alleged that Indonesian soldiers, serving as Exxon's security forces, murdered, tortured, raped and kidnapped local residents. The alleged abuses took place from 1999 to 2001, during a period of civil unrest in the region. The plaintiffs said Exxon had authority over the soldiers and provided them with material and logistical support that aided the alleged abuses.

Not all of the villagers' claims are based on international-law violations. Among other things, they also sued Exxon for wrongful death and assault and battery.

ExxonMobil has recently said the plaintiffs' claims were baseless and that the company was reviewing the July ruling of the U.S. Court of Appeals for the District of Columbia Circuit, which reinstated the lawsuit.

Exxon has said it has worked for generations to improve the quality of life in Aceh through employment of local workers, provision of health services and extensive community investment. "The company strongly condemns human rights violations in any form," the company said.

Amnesty International Welcomes US Court Decision

Ankara (22/7/11)

Amnesty International hailed the decision of the United States court of appeals on US-based Exxon Mobil in facing the demand for the alleged murder outside the law, torture and arrest by Indonesian troops in Aceh province, Indonesia, under the Alien Tort Statute (ATS).

A group of rural people from Aceh had filed civil cases in 2001 and 2007 against Exxon Mobil Corporation, the US company which operates the big natural gas extraction and processing facilities in Aceh province in 2000 and 2001, Campaigner of Indonesia & Timor-Leste, Amnesty International Secretariat, Josef Roy Benedict, told ANTARA's London correspondent on Thursday.

Josef Roy Benedict said they claimed that Exxon Mobil is responsible for the involvement in the alleged violation of human rights by Indonesian troops who were supposed to protect the property and operations of the company.

In the first and second verdicts on July 8, 2011, the US court of appeals stated that Exxon Mobil did not have the company's immunity against the claim made by 15 Indonesians under the ATS.

The decision sends a signal to the Indonesian government to do more to make sure of the truth and justice for the past human rights violations in Aceh.

There were no suspects brought before the court for one of the thousands of cases of human rights violations including torture, believed to have taken place between 1989 and 1998 when the province was a Military Operation Area (DOM).

Aceh province faced rebellion for tens of years including human rights violation and lack of development, which ended after the peace agreement of August 2005, while the Indonesian government and the armed pro-freedom movement (Free Aceh Movement/GAM) was signed.

Law no 2006 on the Aceh administration on the formation of a human rights court on the formation of the Truth and Reconciliation Commission (KKR) Aceh branch. The two government institutions have not been set up until today.

Amnesty International called on the Indonesian government to immediately form a human rights court and make sure that a Truth and Reconciliation Commission is set up and functions according to the international law and standards, like contained in the report of Amnesty International, truth, justice, and reparation: forming an effective commission of truth.

The government must also make sure of the responsibility of violators of human rights in the past including torture in Aceh. This includes cooperation in connection with the litigation process on the case filed in the US.

Amnesty International knows only two examples, in Indonesia, on the case involving human rights violations in Aceh between 1998 and May 2003 had been verified and produced a trial. Only several human rights violation cases had been handled during the military emergency period and the following civil administration (May 2003-August 2005).

Amnesty International praised the decision of the US court of appeals that the company was not immune from its obligations under the ATS for the despicable treatment by the perpetrators violating international law.

The victims of the human rights violations in which the multinational company was also involved, must have unlimited access to the court, and the countries need to take measures to eradicate the obstacles to the access of the victims.

Like this case shows, access to the court of the country of origin (place where the company has its domicile or was registered) has often become the only realistic way to claim the victims of human rights violations by the company need to be listened to and reached all kinds of reparations.

The decision of the court of appeals which make possible a claim to be continued in the US, giving an important opportunity for charges made against Exxon Mobil to be examined by the court.

Angry Landowners Shutdown LNG PNG

ANDREW ALPHONSE reports for the Post Courier (11/08/2011) ... 

TWO expatriate employees were yesterday attacked by an angry machete-wielding landowner at Komo in the Southern Highlands province.

The two employees of Philippine and Arab origins, are attached with international contractor McMillan Clough Curtain Joint Venture (MCCJV) that is contracted by PNG LNG project developer ExxonMobil to develop and construct the Komo LNG international airfield.

Police mobile squad attached with the LNG security operations said from Komo yesterday that the incident happened at about midday at the construction site of the proposed Komo airport runway at Mikili village.

Police said a landowner, frustrated at being overlooked for employment and the unequal distribution of money paid earlier this week for damages to the environment, picked up a bush-knife and chopped the Filipino in the head while the Arab employee was slashed on his arm.

Both were rushed to Port Moresby and are likely to be evacuated to Australia for further medical attention. Police said the incident has forced all early works on the LNG airfield and the neighbouring Hides LNG conditioning plant site, Hides Well Pad A camp, access and overhaul road, landfill, quarry and the proposed Yuni LNG Technical College in the Hela province to a complete standstill as of midday yesterday.

Police said ExxonMobil ordered a stop-work and gathered all its 9800 national and expatriate employees behind closed gates at the Pioneer Camp at Komo while police and security guards kept the area under heavy surveillance for fear of further attacks by the locals.

The same situation was reported at Hides 4 conditioning plant site.

Deputy Komo LLG president and chairman of Hiwa Corporations Peter Pureni yesterday called on Prime Minister Peter O'Neill to look at beefing up police presence in Tari and Komo and provide them with adequate logistical support to quell the law and order problems in order for the project to progress smoothly.

An MCCJV employee confirmed that the attack has sent fear and anxiety among the workmen after a Western Highlander was killed in another attack by the Komo man early this year.

LNG PNG Agreement Must Be Reviewed - Parkop

Pacnews 12/8/11 reports ...

National capital District (NCD) Governor Powes Parkop wants the Papua New Guinea to find ways to educate more people and review the PNG LNG project deal.

Governor Parkop said he would like to see that agreements between the State and LNG developer Exxon Mobil benefit the people. In addition, Parkop wants to see that equity for the State and landowners are increased.

He said in the current PNG LNG project agreement, the State was not given a free equity and therefore feels that the people of Papua New Guinea were cheaply selling their resources away without being properly compensated for.

He said the review in the agreement would also require a review into the Oil and Gas Act.

If the new Government was serious about making changes in a short period of time in office, they must not be afraid to take a bold action, Parkop said.

On education for all, Parkop said Government must design a programme to ensure students to reach a minimum of grade 12.

Many of the problems facing the country arise from pushing out many young men and women from formal education.

Parkop said he supports the current Government, especially with the appointment of two members from the National Capital District into the new cabinet. The two members are Sir Mekere Morauta (Moresby North West) who has a wealth of experience and Andrew Mald (Moresby North East) who is a young leader showing that the current Government has trust in both old and young leaders.

LNG PNG Project to Expand

 Ross Kelly, Dow Jones Newswire (26/7/2011)  

EXPLORATION drilling that could support an expansion of ExxonMobil's $US15 billion gas export venture in Papua New Guinea will start before the end of the year, project partner Oil Search said today.

An expansion of the massive development to three liquefied natural gas, or LNG, production units from the currently planned two would enhance Exxon and its partner's ability to provide cleaner-burning fuel to fast-developing Asian economies such as China.

It could also provide more gas to Japan, whose longer term energy needs may change in the wake of March's nuclear power crisis.

Major energy companies including Exxon, Royal Dutch Shell and Chevron are betting on sustained long-term demand for natural gas from Asia by investing billions of dollars on export terminals in Australia and Papua New Guinea that would chill gas to LNG and ship it to customers by tanker.

Drilling of the Hides gas field in the PNG highlands, which could support a bigger development, will commence in the fourth quarter of 2011, Oil Search said. That's in line with a proposed accelerated drilling timetable that the joint venture has been considering all year.

Oil Search has also brought forward drilling of a test well in the P'nyang field using one of its own rigs to the fourth quarter of 2011 from the first quarter of 2012.

Separately, the Australian company said PNG LNG's foundation stage is on schedule, with Exxon advising that "it is making good progress towards the planned start-up window of 2014".

That's significant because mounting industry cost pressures are making life tougher for project operators. Woodside Petroleum recently announced a six-month delay and $900 million budget overrun for its Pluto LNG project.

To be sure, PNG LNG is in a much earlier stage of its development and the true test will come as it works through its peak construction phase.

There will also be challenges associated with building a pipeline across PNG's rugged jungles and keeping multiple landowner groups onside. Analysts though like PNG LNG because it has a robust resource base, good fiscal terms and it's backed by an experienced operator.

"We think PNG LNG is the best placed Australasian LNG project to withstand a potential capex increase/project delay," UBS said.

Oil Search said a focus at the moment remains the high Australian dollar, given that the project has a number of Australian dollar-denominated contracts and some staff based in Brisbane.

Exxon is managing the issue by using more North American workers, an Oil Search spokeswoman said.

Oil Search also reported today a 53 per cent increase in second quarter revenue to $US217.8 million ($201m) from $US142.7m from a year earlier, as higher oil prices offset an 8.8 per cent fall in production to 1.77 million barrels of oil equivalent from 1.94 million BOE.

A Cautionary Tale from Nigeria

A cautionary tale by John Vidal for The Guardian (6/8/11)

A man walks on slippery spilled crude oil on the shores of the Niger Delta swamps of Bodo, a village in Niger's oil-producing Ogoniland. Photograph: Pius Utomi Ekpei/AFP/Getty Image

Goi is now a dead village. The two fish ponds, bakery and chicken farm that used to be the pride and joy of its chief deacon, Barrisa Tete Dooh, lie abandoned, covered in a thick black layer. The village's fishing creek is contaminated; the school has been looted; the mangrove forests are coated in bitumen and everyone has left, refugees from a place blighted by the exploitation of the region's most valuable asset: crude oil.

Last Thursday, a long-awaited and comprehensive UN study exposed the full horror of the pollution that the production of oil has brought to Ogoniland over the last 50 years.

The UN report showed that oil companies and the Nigerian government had not just failed to meet their own standards, but that the process of investigation, reporting and clean-up was deeply flawed in favour of the firms and against the victims. Spills in the US are responded to in minutes; in the Niger delta, which suffers more pollution each year than the Gulf of Mexico, it can take companies weeks or more.

"Oil companies have been exploiting Nigeria's weak regulatory system for too long," said Audrey Gaughran of Amnesty International. "They do not adequately prevent environmental damage and they frequently fail to properly address the devastating impact that their bad practice has on people's lives."

Goi, 40 miles from Port Harcourt, is a typical case. Just a few miles from where Shell first found oil in Ogoniland in 1958, it is only 20 miles from Bane, the ancestral home of Ogoni writer and leader Ken Saro-Wiwa. People from Goi joined the great Ogoni protest march of 1994, when one in three people from the small kingdom of 900,000 rose peacefully against the company, preventing it from working any of its 30 wells in the area. Two years later, Saro-Wiwa and eight Ogoni leaders were tried on a fabricated murder charge and executed.

A quiet fishing community of fewer than 100 people, Goi was steadily weakened and then broken by a series of oil spills that, over 20 years, made the network of swamps, lagoons, rivers and creeks around it unusable. "People used to drink the water in the creek, fish, cook and swim in it. It was a perfect place," says Dooh. "We wanted for nothing, but the spills came, the tide washed in pollution from elsewhere and in 1987 a massive oil fire burned uncontrolled for weeks. By 2008, most people had left."

Dooh and the last people of Goi then finally gave up. "We kept being polluted. We could not stay any longer," says his eldest son, Eric. "Shell said they would fix things, but a contractor came and scooped some of the oil up and that was it. The spills just got bigger and bigger." In 2009, a third large spill made the last house uninhabitable.

Whether Dooh or anyone ever returns now depends on a court case in the Netherlands. Together with Friends of the Earth Netherlands, Dooh is suing Shell in The Hague for negligence. The Shell pipeline close to the village pumped 120,000 barrels of oil. It burst in 2004 with devastating consequences. The company claims that it was sabotaged by youths stealing oil to process in rudimentary home-made refineries – a process called bunkering. Dooh blames corrosion of the decades-old pipeline.

On Wednesday, Shell formally accepted responsibility in British law for two significant spills in nearby Bodo. Those were rare victories. More than 1,000 court cases have been taken against Shell for pollution in the last 30 years, but almost all are rejected, settled for a few dollars or remain mired in the legal system for years. Even when the courts rule against the company and fine it millions, it is possible for it to appeal, with legal delays draining communities of cash. One case against Shell taken by people in Goi is still in the courts after 14 years.

Ogoni chiefs admit that some spills have certainly been the result of bunkering by youths determined to cash in on the region's one natural asset. "It was the negligence of Shell which compelled people to steal," Groobadi Petta, the president of the Bodo city youth federation, told the Observer. "When livelihoods are destroyed, the youth go to places where they learn how to bunker. They are desperate. They learned from others to steal. It has been to survive." But corporate claims that Shell had been responsible for only 2% of the spills were an insult, he said.

The consensus on the delta is that bunkering and oil theft on a grand scale are condoned, protected and encouraged by a web of organised crime that colludes with government and political elites, the security services and people within the oil companies.

"This is a mafia. They have godfathers. There is no way so much oil could be stolen without protection. Communities get the blame for the spills and the thefts, but the top people are taking far more and are well aware of what is going on. The navy patrols the creeks and main rivers, so there is no way boats could get past checkpoints without their knowledge," says Kentebbe Ebiaridor, a field officer with the Port Harcourt-based Environment Rights Action group.

At the lowest level, villages throughout the delta have set up illegal DIY oil refineries. These rudimentary stills, consisting of a few old pipes and drums welded together, were first used for fuel in the Biafran war. However, they have become part of the survival strategy of many villages too poor to pay for electricity or transport. A few drums of crude are tapped off from old company manifolds, and the oil is boiled up in drums. The fumes are collected, cooled and condensed in a simple distilling process and the result is a low-quality diesel good enough for generators and some cars. But they often catch fire, pollute small areas and every so often are regularly identified and destroyed by the military – only to start up again in days. Government agencies condone them and take a small fee.

"The fact that these operations are proliferating in full view of the enforcement agencies is indicative, at best of a lack of preventative measures and, at worst, of collusion," said the UN Environment Programme report last week.

The brio with which the oil is stolen on a larger scale is breathtaking. Reports allege that top naval officers have private pipelines that serve as conduits through which they siphon crude oil, load on to vessels and ship to refineries in other countries such as SouthAfrica. Last year, a Shell man was reportedly sacked after it was found he had set up a gang to destroy well-heads and then get his contacts to clean up the pollution. In 2003, the Nigerian tanker African Pride was impounded after being found carrying 11,000 barrels of stolen oil and was held in custody by the Nigerian navy. Within months it had mysteriously slipped away.

Organised crime now dominates the theft of Ogoniland oil, says Patrick Naagbanton, co-ordinator of the Amnesty International-backed Centre for Environment, Human Rights and Development. "The pollution has led to the proliferation of small arms, making the delta now one of the most dangerous places on earth. The arms come through porous borders. You can get AK-47s, Chinese, South African, Italian, German and Belgian arms."

Naagbanton conducts a regular survey on the availability of arms on the delta and receives regular death threats. "The arms trade in the delta is dominated by Ukrainian and Russian dealers who swap automatic weapons for illegal bunkered oil. It is driven by political ambition combining with an illegal economy and fed by oil bunkering, creating both direct and indirect drivers of violence in the Niger Delta region," he says.

"Every community now has a silent army. If the problems of proliferation are not addressed, the non-state armed and warlords operating in the region will undermine the region and turn it into a dangerous conflict zone where the gangs will rule at the expense of legitimate authority, development, security and progress of all," he says.

Back in Goi, Chief Dooh's son, Eric, was preparing to go to the Netherlands to represent his father in the case against Shell.

"The human cost of all this pollution is too high. After the spill, Dad's business collapsed, Mother died because there was no money to treat her illness and my brothers and sisters had to come out of school. I am not fighting for myself. This is a test case. Perhaps Shell will now sit up and be corrected after this week. I am fighting for communities across the delta."

We have caught them again! Another example of shoddy journalism from the Post-Courier

There is one thing we now know for sure, journalists from the Post-Courier are not reading LNG Watch! 

On Wednesday 20 of July we exposed examples of the Post-Courier publishing ExxonMobil press releases as news. However, it appears that eyes at the Post-Courier are pealed to the inbox and fax machine waiting for the next round of press releases from the big multinationals, and not to this blog.

So we have decided to expose them again! This time the expose involves Interoil Corporation press releases.

The Post-Courier story and the two press releases they have cobbled together are below.

C’mon Post-Courier, these companies have millions of dollars for PR, they do not need freebies from one of PNG’s main national newspapers. The odds are stacked against the landowners and the poor, they might not be able to give you press releases, but their voices deserve to be heard. Surely the space wasted on publishing this corporate spin could be devoted to them instead!

The Story

Nobles signs HOA for LNG 


Post-Courier, 4/8/11

INTEROIL Corporation (InterOil) and Pacific LNG Operations Ltd (Pacific LNG) announced the signing of a Heads of Agreement (HoA) with Noble Clean Fuels Limited (Noble) on Tuesday. The HoA is for the supply of one million tons per annum (mtpa) of Liquefied Natural Gas (LNG) from the Gulf LNG Project of PNG to Noble, a wholly owned subsidiary of Noble Group Limited.

The agreement sets out the basis upon which the parties intend to conclude terms for the purchase and sale of one mtpa of LNG, (FOB) for a period of 10 years commencing in 2014, to be supplied by the proposed Gulf LNG Project in PNG.  InterOil and Pacific LNG intend to complete negotiations and execute binding agreements with Noble later this year.

“We are pleased to have executed our first HoA for LNG off-take from our Gulf LNG Project in Papua New Guinea”.

“InterOil is proud to work with the Noble Group, which has a proven track record of providing long-term fuel supply to major utilities across Japan, Korea, China, and Asia as a whole,” InterOil Chief Executive Officer Phil Mulacek said at the signing. Liquid Niugini Gas Vice President for LNG Marketing Conrad Kerr said: “Noble is a good fit for the InterOil strategy of mid-scale and FLNG LNG production, and LNG supply is a natural expansion of the Noble Group’s historical relationships in long-term coal supply for power generation.”

The Gulf LNG Project comprises the Elk and Antelope gas fields and Liquid Niugini Gas Ltd, the InterOil and Pacific LNG joint-venture project company, with modular LNG plants contracted with Energy World Corp Ltd and a Fixed Floating LNG facility being developed with Flex LNG Ltd and Samsung Heavy Industries Co Ltd.

Meanwhile, former PNG Prime Minister Sir Rabbie Namaliu has accepted InterOil Corporation’s invitation to chair its PNG advisory board. 

“I am pleased to chair InterOil’s PNG Advisory Board, and look forward to working to bring the Gulf LNG Project to fruition,” Sir Rabbie said when accepting the invitation. “The Gulf LNG project may be the most significant source of revenue to the PNG Government over the next 30 years". “It will bring jobs and infrastructure to one of our least developed provinces and generate benefits to all the people of Papua New Guinea for many years.” 

Welcoming Sir Rabbie’s acceptance today, Mr Mulacek said Sir Rabbie has been an inspiration and a dedicated servant to Papua New Guinea for his entire career. 

“We welcome him to our team and appreciate his support for our Gulf LNG project,” Mr Mulacek said. Sir Rabbie served as PNG prime minister between 1988 and 1992. He was Speaker of the National Parliament between 1994 and 1997. 

He was also Minister for Foreign Affairs and Trade from 1982 to 1984 and other senior ministries he has held include Primary Industry and Petroleum and Energy since his first election to parliament in 1982. 

Most recently, Sir Rabbie served as Foreign Affairs & Immigration Minister from 2002 to 2006 and as Minister for the Treasury from 2006 to 2007.  Sir Rabbie left Parliament in 2007.

Sir Rabbie holds a Bachelor of Arts degree from UPNG and a Master of Arts degree from the University of Victoria, British Columbia, Canada and an Honorary Doctor of Laws from the same university.

The InterOil PNG Advisory Board is a management group being formed to assist InterOil in discussions with government departments in developing the Gulf LNG Project.

The Press Releases


The first press release

This is used for the first half of the Post-Courier story.


Now onto the second press release.

And here is the second half of the Post-Courier story!