INTEROIL Corporation has offloaded its refinery and fuels marketing businesses in Papua New Guinea to Puma Energy for US$525.6 million.
Under the deal, which represents Puma’s first investment in PNG, the company has purchased InterOil’s subsidiary companies which hold an extensive network of fuel terminals, retail service stations and aviation facilities. This will make the company PNG’s major supplier of fuel.
The acquisition will be funded from Puma’s existing bank facilities and available cash.
InterOil’s downstream businesses includes 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.
Puma, one of the world’s largest independent midstream and downstream companies, plans to use its extensive experience in fuel storage, distribution and refining to link the PNG fuel market with its global operations. Existing InterOil staff will be retained and the operations are intended to be managed locally.
Puma chief executive Pierre Eladari said the investment marked an important step in the execution of its regional strategy.
“We believe strongly in Papua New Guinea and its future growth prospects, and see many opportunities for continued investment in infrastructure and in the skills of our employees to build upon the historic success of InterOil’s business, and to position PNG as a strategic hub within our regional portfolio,” he said.
InterOil chief operating officer Jon Ozturgut said the sale followed an unsolicited approach from Puma and a strategic review by InterOil of options for the best allocation of capital.
“For the past ten years, the refinery and distribution businesses have contributed to InterOil’s business model and Papua New Guinea’s development,” Mr Ozturgut said.
“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.”
Puma, which distributes petroleum products in more than 40 countries, employs more than 6,700 people, and operates nearly 1,700 service stations, more than 60 terminals and a refinery.
It has regional hubs in Australia, South Africa, South America and Europe.