My understanding is that the PNG government is entitled to a share of 22.5% of the gas as long as they pay their portion of the development and participate in financing the production. $340 million has been spent so far on Elk/Antelope. From Phil's words on the call and the way the Morgan Stanley report was written, I understand that PNG will get 22.5% of the gas "in-kind", with no investment/cost on their part. They are free to do with the gas what they want; however, they will not be a participant in the LNG production project requiring them the put in their share of capital, nor will they have to pay 22.5% ($80M) of the development costs so far. Can anyone clarify that I am thinking of this correctly. If so, I believe it is a great deal for IOC and shareholders. It takes many handcuffs off of IOC, and gives them much more flexibility in the future. $80M is a small price to pay for what is likely $16B+ in value for E/A alone.
CF