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InterOil sheds downstream PNG operations to focus on E&P

30th June 2014

InterOil Corporation has announced the sale of companies that hold its Papua New Guinea oil refinery and petroleum products distribution businesses to Singapore-based Puma Energy Group for USD 525.6m

InterOil sheds downstream PNG operations to focus on E&P
"Our upstream and LNG business has become core to the company’s growth," - Ozturgut, InterOil COO

InterOil’s downstream businesses include the Napa Napa refinery in Port Moresby that processes about 28,000 barrels a day, 52 service stations, and 30 fuel depots, terminals and aviation sites.

The sale ensures the transition to Puma Energy of all InterOil staff who are employed in the refinery and downstream businesses.

InterOil chief operating officer, Jon Ozturgut, said the sale followed an unsolicited approach from Puma Energy and a strategic review by InterOil of options for the best allocation of capital.

InterOil’s chief financial officer, Don Spector, said the banks’ response was pleasing, with expressions of interest well in excess of the final amount.

“For the past 10 years, the refinery and distribution businesses have contributed to InterOil’s business model and Papua New Guinea’s development,” said Ozturgut. “However, our upstream and LNG business has become core to the company’s growth and, as a result of the success we have had in discovering and monetising gas, the time is right to focus on this part of our business. The transaction immediately provides additional capital to fund our upstream and LNG business. We believe this is in the best interests of Papua New Guinea and our shareholders.”

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