02-27-2012, 09:11 PM
Duma will stir the pot until the deal is done; that's his job. Doesn't necessarily make him a bad guy. Government has a duty to bring these projects online as quickly as possible and stuff the Treasurey/SWF coffers. He is clearly stating that Shell is there no matter what, but they won't be forced in unless whatever IOC comes up with is considered a bad deal, or somehow is seen as putting the project at risk. IOC is plenty smart to understand what they have to do. I would guess Shell might not be the best deal for IOC/IOC shareholders, but we know they would bring the project to fruition, and that's what Duma and the government need. Doesn't seem to be a sense of panic at this point. In fact hearing that IOC is taking its time on the drilling at T2 to be as careful as possible to avoid any kick, etc which would put the drilling at risk, gives me comfort that they know all they have to do is get it to TD with good (hopefully very good) results. That will give them the best chance at being able to choose who THEY want as a partner.
One thing to realize with Shell however is that just having the Petromin affiliation does not give them any ownership or interest in the Gulf LNG project. In fact all it really does is probably put them in as Petromin's "bank"; Petromin does not have the cash needed to kick in for their share, so Shell will "provide" that. If I were them, I would be pressuring Petromin/PNG to be the project operator; thus the continued comments by Mr Duma.
Those reasons are why I would prefer a Kogas/Japex/Mitsui partner really over anyone else. Reason is that they have many pockets to pull funds from to provide Petromin with what they need. Countries have much more flexibility to fund these kinds of projects IMHO because they can do them at low or no interest, eventually write them off if PNG gives them other infrastructure projects, etc.
To me Shell is worst case scenario for IOC, and I don't think we'll end up with them, but it won't necessarily be the end of the world. Just won't be as lucrative for IOC or shareholders. IOC would have to screw up pretty badly I think to end up with Shell
One thing to realize with Shell however is that just having the Petromin affiliation does not give them any ownership or interest in the Gulf LNG project. In fact all it really does is probably put them in as Petromin's "bank"; Petromin does not have the cash needed to kick in for their share, so Shell will "provide" that. If I were them, I would be pressuring Petromin/PNG to be the project operator; thus the continued comments by Mr Duma.
Those reasons are why I would prefer a Kogas/Japex/Mitsui partner really over anyone else. Reason is that they have many pockets to pull funds from to provide Petromin with what they need. Countries have much more flexibility to fund these kinds of projects IMHO because they can do them at low or no interest, eventually write them off if PNG gives them other infrastructure projects, etc.
To me Shell is worst case scenario for IOC, and I don't think we'll end up with them, but it won't necessarily be the end of the world. Just won't be as lucrative for IOC or shareholders. IOC would have to screw up pretty badly I think to end up with Shell