From a single refinery project to one of Asia’s largest onshore gas discoveries, InterOil was built by Phil Mulacek over 16 years as its founder, Chairman and CEO.
The vision – ‘Mini Major’ vertically integrated energy company
In the 1990s, Papua New Guinea was producing oil but had no refinery of its own. It shipped its crude to Australia and imported fuel from Singapore. Phil saw the opportunity: a refinery at home would save both journeys and give the country its own fuel supply.
The refinery
InterOil secured a 99-year lease on a deep-water site at Napa Napa, across the harbour from Port Moresby, and signed a 30-year Project Agreement with the PNG Government in 1997. In 2002, the US Government’s Overseas Private Investment Corporation (OPIC) provided USD 85 million in financing, its first project loan in Papua New Guinea. The refinery took its first crude in June 2004. By 2013, it had processed more than 56 million barrels without a lost-time injury.
A national energy distribution company
InterOil bought BP’s Papua New Guinea businesses in 2004 and Shell’s in 2006, becoming the country’s largest fuel distributor. With a refinery, a fuel network and a growing exploration business, it became a fully integrated energy company.
Exploration and discovery
InterOil explored the Eastern Papuan Basin, an area most of the industry had passed over. Its Elk-1 well struck gas in 2006, and in 2008 the team discovered the Antelope reef beneath it. Antelope-1 set a gas-flow record certified by Guinness World Records in 2009. Together with Triceratops, InterOil’s discoveries were estimated at 1.6 billion barrels of oil equivalent.
Growth
Under Phil’s leadership, InterOil grew from about USD 1 million to over USD 5.4 billion in market value, and its share price rose from about USD 0.50 to over USD 114. The company was listed in Port Moresby, Australia, Canada and New York, and raised capital from investors including Fidelity, Morgan Stanley, Macquarie and BNP Paribas.
Community and philanthropy
Phil built InterOil on the belief that a company should leave the communities around it better off. Under his leadership, InterOil established a Community Relations department that worked alongside local people, landowners and government in the areas where it operated.
Near the refinery
From 2001, InterOil ran a long-term development programme with the villages around Napa Napa, supporting local schools, including training workshops for people aged 14 to 68 and a fresh water supply that improved health and living standards in the field.
Health care in remote communities
Along the Purari River, near the Elk-Antelope fields, InterOil provided free medical treatment to local communities and airlifted patients to hospitals in Port Moresby and Mount Hagen. It trained local women as village birth attendants in maternal health, safe births, nutrition and HIV awareness, and used its charter flights to deliver medicine to remote aid posts that could not be reached by road.
InterOil also worked with Doctors Without Borders, supporting volunteer doctors who treated children and adults for illness and disability. The company supplied fuel for medical ships, allowing doctors who donated their time to reach remote communities and perform medical procedures.
Education
In 2007, InterOil helped reopen the Wabo school, which had been closed for almost ten years due to a lack of teachers. The company opened a distance-education centre for young people who had left school, funded training for volunteer teachers through the PNG Education Institute, awarded teachers’ college scholarships, and sponsored student prizes.
Infrastructure
InterOil installed water tanks in five villages, bought a sawmill for the community, and built a community centre. In 2013, it completed an office and accommodation complex at the Wabo government station, bringing a district officer and police back to an area without government services for years. It also built a trade store to help local landowners start their own business.
In times of crisis
When floods, volcanic eruptions, and tsunamis struck Papua New Guinea, InterOil supported affected provinces and the national government with fuel, logistics, and aid.
Retirement and legacy
Phil stepped down as Chairman in 2012 and retired as CEO in April 2013. Announcing his retirement, InterOil’s Chairman, Dr Gaylen Byker, called him “a remarkable visionary, engineer and entrepreneur” who built InterOil “from a concept to an NYSE-listed company.”
In 2013, Total bought a majority stake in the Elk-Antelope fields, and in 2017, ExxonMobil acquired InterOil in a buyout transaction. Today, the fields Phil discovered are the foundation of the Papua LNG project.
In Phil’s words
“I am grateful for the opportunity to have led InterOil from its humble beginnings in 1997 through the discovery of world-class natural gas and condensate resources at Elk/Antelope and Triceratops.”
Milestones
- 1997InterOil founded; Project Agreement signed with the PNG Government
- 2000Listed on the Australian Stock Exchange
- 2002USD 85 million OPIC financing for the refinery
- 2004Refinery receives first crude; BP’s PNG business acquired
- 2006Elk-1 gas discovery; Shell’s PNG business acquired
- 2008Antelope reef discovered at Elk-4
- 2009Antelope-1 and Antelope-2 set gas-flow records
- 2013Phil retires as CEO
Explore the Oil & Gas page for more on the exploration story.