|Wednesday, 18 July 2012|
THE outcome of a joint venture dispute between deepsea explorer Nautilus Minerals and the Papua New Guinean government may be decided in Sydney through an arbitration process lasting several months.
The agreed arbitrator is former chief justice of Australia’s High Court Murray Gleeson AC QC.
The dispute over the Nautilus-led Solwara 1 offshore project first surfaced in June.
PNG government-owned JV partner Petromin argued there was a breach of the JV agreement which was refuted by Nautilus.
The explorer, which just made its first announcement for almost a month, has revealed there is a second matter for arbitration “concerning certain statements made by the parties” and whether they met the conditions of the JV struck with Petromin last year.
Nautilus is continuing efforts to resolve matters outside of arbitration and has warned the process may take several months.
In March last year, Petromin signed on to buying a 30% stake of the Solwara 1 project.
In a conference call last month Nautilus chief executive officer Stephen Rogers revealed Petromin subsequently failed to make any payment for the stake, or for its share of ongoing development costs, which amounted to $US47 million so far.
Rogers said Petromin attempted to renegotiate several fundamental principles of the Solwara 1 JV.
Whether Petromin can independently secure the necessary financing for its Solwara obligations is hard to foresee due to the troubled lending climate of past months.
Toronto-listed Nautilus aims to commission the seafloor production system at Solwara 1 by the end of 2013.
The Solwara 1 project is targeting an initial production rate of 1.2-1.3 million tonnes of dry ore, which is expected to equate to about 80,000 tonnes of copper and 150,000 ounces of gold per annum.
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