O'Neil and Interoil

[will2bgreat]

My impression is that the government will not be making the decision on the partner or having any signing ceremony in Japan or wherever, but that IOC knows what is acceptable and the BOD is making the partner selection and essentially may already have, and that Duma does not have any significant problem with or represent any danger to that process. Once IOC and the new partner have a binding preliminary agreement signed, the government would be notified probably in conjunction with an announcement of the partner selection and sell down deal, before any final agreement with the government. IOC and the new partner(s) might even work with the government, including Duma and the rest of the team for that, on a final "gas agreement" without bothering with a formal modified "Project Agreement". As far as I know the government still has the additional 27.5% option in conjunction with the second project phase at commercial prices established with the sell down, but with an acceptable new partner on board would probably not exercise it with the final gas agreement. I understand all bidders were fully aware of that issue and prepared to work with it. Whether the Gulf LNG interest ends up in Petromin or NPCP, although it sounds like probably the latter, is an internal PNG issue that IOC probably will not be involved in; but I think that may be the real primary issue that Duma is most involved in or perhaps concerned with. He is technically correct about the current project approval being "conditional", which was actually stated as such in IOC's February 27 year-end PR, although omitted in a subsequent quote; but the Company expects that the deal will meet all those conditions and not be the problem shorts would like people to think or fear. I think the final binding bids deadline process was as intended and communicated, and that no "rebidding" process is stretching things out, although that doesn't mean a takeover attempt and/or competition couldn't break out at any time. I believe they are working through all the various complex terms of a binding agreement that is satisfactory to all parties and will make an announcement when that is reached, but only when they have that, hopefully sooner rather than later, whatever that means.

Getit,

Stupid question time.  Accepting the fact that they will be talking IOC; could they be discussing the Duma article and it's impacts on the JKM bid.  Maybe Japan wants some assurances from PNG.

Good luck longs.