InterOil Provides Update on Jet Fuel Supply in Papua New Guinea

    News Editors

    PORT MOREBY, Papua New Guinea--(BUSINESS WIRE)--March 23, 2005--InterOil Corporation (TSX:IOL) (AMEX:IOC) (ASX/POMSoX:IOC), a Canadian company with operations in Papua New Guinea, today announced it is aware that Shell Papua New Guinea has decided not to release to the market a shipment of Jet A1 specification fuel which was uplifted from our refinery and delivered to the Shell Port Moresby terminal in early March.

    We are informed that Shell's decision relates to the certification of Jet A1 product and specifically to the 'freeze point' specification. Prior to release from the refinery, this shipment had been fully certified to Jet A1 international specification by SGS, an international independent testing company.

    Immediately upon being notified by Shell PNG that their subsequent testing had failed to recertify this shipment of fuel, further testing was undertaken by SGS, who confirmed that the shipment was well within Internationally Accepted Specifications for Jet A1 fuel. Further testing was then undertaken by another 3rd party independent laboratory which tests also confirmed the original certificated quality.

    Subsequent independent testing procedures undertaken by other distributors of the same shipment in Papua New Guinea as that supplied to Shell have also certified the Jet A1 fuel as, well within Jet fuel specifications. Procedures are underway to deliver this product to market to alleviate the current shortage of Jet fuel currently being experienced by the airlines in Papua New Guinea.

    InterOil is actively working with Shell and the other industry members to ensure that the fuel requirements in Papua New Guinea can be supplied in an active manner. InterOil does not accept that this shipment does not comply with international jet fuel specifications and will be submitting samples from this shipment for further testing by an independently appointed testing laboratory.

    InterOil is developing a vertically integrated energy company whose primary focus is Papua New Guinea and the surrounding region. Its assets comprise an oil refinery, upstream petroleum exploration licenses, and retail and commercial distribution assets. The majority of the refined products from InterOil's refinery are secured by off-take contracts with Shell and InterOil's wholly-owned subsidiary, InterOil Products Limited. BP Singapore is InterOil's agent for crude oil supplied to the refinery. InterOil is also undertaking an extensive petroleum exploration program within its eight million acre license area located in Papua New Guinea.

    InterOil's common shares trade on the Toronto Stock Exchange under the symbol IOL in Canadian dollars; on the American Stock Exchange under the symbol IOC in US dollars; and on the Australian Stock Exchange in CHESS Depositary Interests in Australian dollars under the symbol IOC which trade on a 10:1 basis to common shares. For more information please see the InterOil website at: www.interoil.com.

    Cautionary Statements

    This press release contains forward-looking statements. All statements, other than statements of historical facts, included in this release, including without limitation, statements regarding our drilling plans, business strategy, plans and objectives of management for future operations and those statements preceded by, followed by or that otherwise include the words "believe", "expects", "anticipates", "intends", "estimates" or similar expressions or variations on such expressions are forward-looking statements. The Company can give no assurances that such forward-looking statements will prove to be correct. Risks and uncertainties include, but are not limited to, the existence of underground deposits of commercial quantities of oil and gas; fluctuations in prices for oil and gas production; curtailments or delays in development due to mechanical, operating, marketing or other problems; capital expenditures that are either significantly higher or lower than anticipated because the actual cost of identified projects varied from original estimates; and from the number of exploration and development opportunities being greater or fewer than currently anticipated.

    This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or publication under the security laws of any such state. These securities have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

    The Company currently has no reserves as defined under Canadian National Instrument 51-101 reserve definitions. See the Company's filings with the Canadian securities regulators for additional risks and information about the Company's business.



    InterOil Corporation (TSX:IOL) (ASX.:IOC) (AMEX:IOC)

--30--CCN/na*

CONTACT: InterOil Corporation Gary M Duvall V.P., Corporate Development (281) 292-1800 Email: gary.duvall@interoil.com OR InterOil Corporation Anesti Dermedgoglou V.P., Investor Relations +61 7 4046 4600 Email: anesti@interoil.com Website: www.interoil.com

KEYWORD: NEW YORK INDONESIA INTERNATIONAL CANADA ASIA PACIFIC INDUSTRY KEYWORD: OIL/GAS ENERGY SOURCE: InterOil Corporation

Copyright Business Wire 2005