Pid Talisman Papua New Guinea

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Talisman’s LNG in Papua New Guinea

A Project Initiation Document written with the purpose of choosing the best approach of our company’s resources in Papua New Guinea

Andrei Catalin Onose
29.11.12

Content
Summary……….………………………………………………………….. ii

1. Introduction
2.1 Papua New Guinea…………………………………………………………1 2.2 Talisman in Papua New Guinea…………………………………………1

2. Business case…………………………………………………………………2/3

3. Stakeholder analysis
4.3 Papua New Guinea Government………………………………………...3 4.4 Talisman Partners…………………………………………………………3 4.5 Papua New Guinea Population………………………………………….4 4.6 Local landowners…………………………………………………………..4 4.7 Stakeholder analysis……………………………………………………….4

4. Project development plan

5.8 Project scope…………………………………………………………………6 5.9 Objective………………………………………………………………………7 5.10 Critical success factors……………………………………………………..7

5. Constraints and Assumptions

6.11 Assumptions………………………………………………………………….8 6.12 Constraints……………………………………………………………………8

6. Risk assessment plan……………………………………………………….9

7. Project Plan

7.1 Phase 1……………………………………………………………………..9/10 7.2 Phase 2…………………………………………………………………………10 7.3 Phase 3…………………………………………………………………………10

8. Project Budget…………………………………………………………….10/11

9. WBS & Gant Chart

10. Conclusion……………………………………………………………………….11

11. References…………………………………………………………………13/14 1. Introduction

1.1. Papua New Guinea

Papua New Guinea or the Independent State of Papua New Guinea is a country located in Oceania that occupies the Eastern part of New Guinea Island. It is located in the South Western part of the Pacific Ocean and apart from the mainland it also has numerous islands. The population is about 6.2 million people and over 800 languages are spoken here because of the numerous tribes that live on the island. 80% of the population lives in rural areas and in many places subsistence agriculture (BBC News Asia 2012). Although Papua New Guinea had one of the biggest economic grows in the world in 2011 (Raising the profile of PNG in Australia Australian Department of Foreign Affairs 2012) poverty remains a big problem. Nonetheless Papua New Guinea remains one of the last places on earth with a vast number of resources. It is the 12th largest producer of gold and 13th of cooper and many describe it as “an island of gold in a sea of oil and gas” At this point it is considered that the gas reserves are approximately 22.5 trillion cubic feet. From the oil and gas industry comes 60% of the countries GDP (CIA agency 2011). Corruption and bribe, political instability and recent conflicts with its western neighbor Indonesia make Papua New Guinea a very difficult environment for us to expand our affairs.

1.2 Talisman stakes in PNG

By purchasing the local company “RIFT” in August 2009 our company became one of the main players in PNG. Together with Rift’s licenses we now own 14 licenses and our possible aggregation of gas up to 5 trillion cubic feet (Highbeam 2009). In addition to this, in February 2012 we signed a contract with Mitsubishi worth of $280 million dollars, giving them stakes in 9 out of the 14 licenses we own on PNG. Following this contract, Talisman and Mitsubishi have stakes in between 20% and 40% and PNG government 40% making Mitsubishi our major partner. (Talisman, 2011) “Earlier in Dec-2011, Talisman engaged RFC Corporate Finance to seek a strategic partner for four licences viz. PPL 235, PPL 261, PRL 4 and PRL 21 in Papua New Guinea” (derrickpetroleum.com/2012) These are the wells were we own the highest stakes and in order to benefit the most from them my personal recommendation would be to start with these ones.

1. Business case

Due to our challenging financial situation at the moment, with a loss of $731 million dollars in the third quarter, our project in PNG must be...
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