'johnwgrant' pid='18540' dateline='<a href="tel:1362842 Wrote:Idle thoughts...
1) Does InterOil REQUIRE a supermajor ? PNG stated they must have an experienced operator, not a SM. Hiwever IOC has stated that thy have at least 2 bids from SMs. Does a supermajor have technology (think LNG processes and blueprints !) that InterOil must have ? Yes and no, but obviously if that were absolutely the case png would have required a SM. They have not. There are certain processes that COP or others have developed, but they license that out.
2) If JKM is high bidder at $2.25/mcf (plus they will provide cheap financing), can InterOil license the LNG plant technology (say from Conoco-Phillips), get it build by one of the big engineering firms, hire a contract operator to run it, and use the proceeds of the financing for their exploration needs? Can look at the PNG LNG project as a model. The partnership formed will hire the contractors who will have bid based on the technology/process chosen by the winning bidder. The winning bidder likely will oversee the construction like XOM has on PNG LNG. Someone (IOC hopes its them) will be in charge of exploration and they will do the exploration, pitch in their share and other partners will pitch in theirs. Again, look at XOM/OSH.
3) How important is it to InterOil to speed up their exploration? (They are facing drilling deadlines that they will miss unless they get approval from PNG gov't to move the deadlines.) It's crucial especially since they'll likely be responsible fir the exploration. They'll continue to work with the government on the licenses but will have to drill, discover, get PRL and other licenses. They'll need more rigs and/or contract out drilling. PRE could also play big role.
4) Is there any possibility that XOM/Oil Search will buy gas from InterOil to feed their LNG plant ? (If I am XOM/Oil Search, I would rather just drill some of my own leases rather than buy from InterOil - but what do I know !?!?) Thats easy; Yes it's a distinct possibility either now or down the road.
5) Can InterOil have multiple "successful" bidders - ie, accept multiple bidder proposals? For example: JKM is high bidder on the selldown but Total offers technology/LNG expertise, drilling rigs and crews, etc. Could InterOil accept both bids - but, reduce their percentages. For example: JKM wants 25% as does Total. InterOil accepts both bids BUT each only gets 15% (for a total of 30% - the other 5% coming out of InterOil's percentage)!!!!! I think very unlikely we have 2 bigs with equal shares. Could in end have structure kind of like PNG LNG where a couple of minority strategic partners come in but that likely would be after selldown and there are more knowns etc.
6) Does EWC and FLNG even show up on the radar? Is there a potential for them to be part of the NEXT 3.8 mpta LNG 'plant' ? EWC probably small blip at this point, Flex got sunk by SHI's battleship this week. SHI said sorry, we are not refunding any money and contracts are bye-bye. There will be some legal stuff but Flex is limping back to port.
A thing to guard against this weekend is expecting an announcement Monday or possibly this week. Could happen but also don't know for sure what's all going on this weekend, how much question/ answer needs to take place etc. IBs run the show for a bit to be sure best decision is made. But if its a slam dunk, could come anytime.
Comments ?