Indonesia, Pertamina

[cybersssss]

Could not agreed more Stavros,

The deal MUST get done. As you mentione, there is a time factor of money and a lost opportunity cost as well.

Again I think the BOD knows this and I think the market sees it getting done, hence the increase in PPS. I strongly believe that Dr. Byker and the BOD knows this and the ball will not be dropped.

[Tree]

If JKM has been required to partner with an experienced LNG operator the same could hold true for TOTAL. TOTAL is involved in several LNG projects but is not Operator in any of them. Pertramina has 2 LNG operating units which have processed more LNG than any other operator while running the Arun and Bontang fields dry. Those projects pioneered the LNG industry.
Pertramina likely an Operator stake and would demand better terms than a contract operator.

[jft310]

Stavros- Maybe this is why IOC scheduled a BOD meeting??To get her done. Next week could be quite interesting.

[ArtM72]

Heres the rational for waiting IOC's returns if bought at the beginning of the holding period not traded and the measured. YTD UP 52% before a deal 1 Year UP 65 % 3 Year UP 60% 5 Year UP 200% 10 Year UP 400% Now if you are a trader and bought the dips well Geez you have done even better. ALL BEFORE OUR FIRST DEAL!!

JFT - I just have to object to the "first deal" characterization.  I know there is nothing "short" about your position on or view of the company, but in reality there have been a number of deals successfully negotiated by IOC to date.  The first really BIG deal awaits, certainly, but it just isn't accurate to ignore all of the work done to date by the company.  IMHUO the price has risen because confidence in the resource has been generated as companies like Mitsui, PRE and now OSH have been engaged.

One of those ships on the horizon is IOC.

[jft310]

Art- I concede your point and agree. This is the mother load deal for IOC

[admin]

I actually disagree with pick as to who can or will pay the most. Per a 2 hour meeting several months ago with IOC it was explained that a Utility Co would pay the most for a stake,a National OIl Co like Pertamina the next most, and a Super Major the next most because of their name. The goal was to get the Super Major bids up to the National Oil Co's bids. No one knows has that happened and where we are today. We do know we have a bidding war.SWEET!

Yes, utilities would prefer to source from their own projects (or partly owned projects at least), rather than pay at the open market as at least they get some kind of discount back in the form of profits proportional to their stake

Although I wasn't present at that meeting, but some basic logic points to EXXON as the one also being able to pay a lot, by virtue of having complementary asset (that $19B LNG plant that's now 80% complete and that pipeline with that famous T in the Gulf).

Of course, bidding processes have their own dynamics, so this isn't a prediction, just a statement of fact.

While no guarantee, but I might as well point out here that those bidding dynamics can end up into something funny (depending on your sense of humor and which side of the fence you're sitting on) called the winner's curse (resulting in the winning bid overvaluing the asset). Especially in conjunction with the large short count this could become quite a spectacle.

[Tree]

I believe personally that if IOC doesn't make their decision by the end of May there's a strong risk of bidders walking away.

I urge you all to listen again to Dr. Fesharaki's interview whenre he stresses that it MUST be a big boy as operating partner and it MUST be consumated very soon. Several people have stated in print that Shell has already been pipped as the Operating Partner. The second tier partner buy-ins are now up for grabs to join IOC and Shell. Also for sale are offtakes - - - Oil Search/ XOM; JKM; etc

Stavros,

Why do you posit the conclusion of your highlighted comment above?  That conclusion flies in the face of reality IMO.  You must have a reason to post it, can you share  it?

AU projects cancelled and delayed, Indonesian LNG output is rapidly declining and that has been the main supplier to JP/SK.  There is a growing large LNG supply hole in 2019/20.  JP is scrounging to save $1/Mcf and is offering to fastrack LNG development in Alaska as that LNG costs saves the $1/Mcf in shipping costs from Gulf LNG projects.  $4/Mcf from Alaska as opposed to $5/Mcf shipping from Gulf.  Those are market realities and IOC's project justifies $5/Mcf based on project economics and shipping alone.  The bidders have spent millions in DD seeking to win a share of $100's of billions of LNG revenues for the next 20-30 yrs. from IOC gas/condensates.  The only reason any would 'walk' at this late date is if they were declared losers in the process.  That hasn't happened yet as far as we know.

Maybe I'm missing something and you can help me understand your conclusion above.  It seems that could scare some.

[Getitrt2]

Tree, I agree totally. I cannot understand anyone having that belief at this point. The "decision" will be made, if not already made as Pavel at Raymond James thinks, and then announced and implemented as soon as the bids stop going up and negotiations are complete on any open issues, and proper notifications and coordination accomplished with the PNG government, which I understand should not take long since the latter should not involve any detailed review and approval.

[Palm]

Yes, hard to believe that end of May matters much to bidders overall. If one bidder has that as a deadline and that's known, then that may or may not be important. But what's support fir that? If someone drops out at this point it will more likely be because they aren't up to snuff on their bid. They may SAY its taking too long, but these bidders are fully informed of process and at this point "too long" would be smoke for "we got outbid". IMHO