'jft310' pid='10643' datel Wrote:O'Neil is a bean counter and he can see Exxon nailed the PNG govt with Exxon getting all their $$$ back before PNG gets paid BIG dollars.Thats not gonna happen again and shouldn't have happened with Exxon. PNG govt should have chosen Petronas but Exxon offered Beach front homes in Port Douglas..PNG govt has a strong interest in a seperate IOC company. They have joint interests.The Super Majors are bully's and Interoil can benefit from a friendly PNG govt. They both win.
This isn't so much of a revelation (condos, etc) as it is a change in the way of doing business. O'Neill has the coalition he does because of what he is able to hold over the heads involved with the Exxon debacle, including Arthur Somare. That whole screwed up mess of the way he financed the PNG govt portion of the Exxon PNG LNG project is still creating a huge budget deficit for PNG, and the plan has been for that shortfall to be covered in the current budget. However, things have not worked out as planned and PNG's 2013 budget planning will be very interesting; that shortfall needs to be dealt with somehow. I have been watching the language of the preliminary commentary that O'Neill has done and the one mention of negotiating the Gas Agreement as well as ownership % still sticks out to me. I can see something coming in the final PA that might try and address the PNG LNG fiscal problem for the govt. For instance they may want a higher piece of ownership than the standard 20.5% and possibly (if XOM is involved) that "extra" % is funded by XOM. Who knows, but I sense something about the PA might be slightly different.
The point of this is that the IOC PA could well end up being the poster child for how the government will do resource projects going forward; no more backroom deals that benefit only individuals. O'Neill has heard with both barrels from the likes of Japan that PNG MUST clean up its act now so that investments are safe, and projects get done timely. No longer can a project like PNG LNG face delays due to poor execution by the government where those investing must spend extra billions because the DPE is understaffed, run by someone who thinks it's his personal piggy bank, and the lights aren't even on. We need LNG, etc at a specific time for so many years. Get things in order or you as a nation will bump along and be overrun by ruthless energy and mineral developers, and never advance.
I think this is why some of the process is taking longer than normal. The bidders are being controlled by the process instead of them controlling the process.