Papua LNG Nears FID as ExxonMobil Takes Operatorship

TotalEnergies announced Papua LNG achieved key milestones, reducing project costs to $14B. ExxonMobil will take over operatorship, with TotalEnergies selling a 9.1% stake. A gas agreement was finalized with Papua New Guinea, and an LNG marketing joint venture was established. TotalEnergies will retain a 20% interest and 1.5 Mtpa offtake.

TotalEnergies reduced the estimated cost of the Papua LNG project to $14 billion and agreed to transfer operatorship to ExxonMobil. The French energy major achieved $4 billion in cost savings through project optimization and rebidding work. ExxonMobil will hold a 34.1% stake and operate the project, while TotalEnergies' stake will reduce to 20%. The partners finalized amendments to the gas agreement with the Papua New Guinea government and created an LNG marketing joint venture.

Santos is increasing its stake in the Papua LNG project by 3.3% for $189 million, raising its total interest to 21%. ExxonMobil will take over operatorship from TotalEnergies. The deal is pending regulatory approval and a final investment decision expected in Q4 2026. Papua LNG aims to produce 5.6 million tonnes of LNG annually, with cost savings bringing estimated capital expenditure down to $14 billion.

QatarEnergy CEO Saad al-Kaabi reported that Iranian attacks damaged 17% of Qatar's LNG capacity, causing $20B in annual revenue loss and threatening supplies to Europe and Asia. Repairs may take 3-5 years, affecting 12.8M tons of LNG annually. QatarEnergy may declare force majeure on long-term contracts. ExxonMobil, a partner in the damaged facilities, holds significant stakes.

Exxon Mobil (XOM) shares fell 0.9% to $160.78, despite record diesel margins of $108.02 per barrel. The company reported $14.53 billion in Q2 earnings, with Energy Products contributing $5.47 billion. Operating cash flow was $23.56 billion, and free cash flow reached $17.2 billion. The stock is 26.75% above its GF Value estimate.

Chad nationalized oil assets previously owned by ExxonMobil, ending a dispute with Savannah Energy and canceling a US$407 million claim. The move may hinder future investment as fields age, with oil still funding 40% of the government's budget. Chad faces economic challenges, including poverty and refugee influxes from Sudan. The IMF projects 5.2% growth in 2026, driven by non-oil sectors.