05-01-2013, 03:05 AM
It is my guess that were IOC to be in control of the situation the decision would have been made and announced. Government influence in this decision is the confounding element.
One possible reason for the trouble is those, likely in the NEC, who were given the dream of owning 50% of E/A. All well and good for PNG but without money to buy the extra share everyone involved is left scratching their heads and looking for creative ways to make this "dream" come true. Just where does a dirt poor country come up with 6 (or more) billion dollars to buy 3 (or more) Ts of gas?
And let's not forget, there is a double edged sword here. The higher the price paid in the selldown the more the PNG 22.5% is worth, but the more that 27.5% will cost. Hell, I haven't heard where PNG is going to get the capital to buy that 22.5% share.
Maybe the classic Gordian Knot. Sooner or later the PNG factions will have to step back and see there is no perfect solution so they just have to say 'let's get this deal done whatever it is, our interests will be well served if it also serves our partners. There is a lot more petroleum to be found and it is time we move forward'.
I think O'Neil is "there", but he has an entire country full of problems and likely his biggest challenge (and need) is to facilitate the development of a rational democratic decision making structure in PNG government. You don't do that by dictating solutions and O'Neil is already likely wielding too much power. His dictating the final solution doesn't move that ball forward.
So anyway, I think we just wait until the decision is announced. Only time will tell when that will be. Maybe the problem is the supermajors need the time to reconfigure other assets for the financing necessary to beat the $3.50/mcf offered by JKM for E/A and pick up chunks of PPLs 236 and 238. "Multiples"
One possible reason for the trouble is those, likely in the NEC, who were given the dream of owning 50% of E/A. All well and good for PNG but without money to buy the extra share everyone involved is left scratching their heads and looking for creative ways to make this "dream" come true. Just where does a dirt poor country come up with 6 (or more) billion dollars to buy 3 (or more) Ts of gas?
And let's not forget, there is a double edged sword here. The higher the price paid in the selldown the more the PNG 22.5% is worth, but the more that 27.5% will cost. Hell, I haven't heard where PNG is going to get the capital to buy that 22.5% share.
Maybe the classic Gordian Knot. Sooner or later the PNG factions will have to step back and see there is no perfect solution so they just have to say 'let's get this deal done whatever it is, our interests will be well served if it also serves our partners. There is a lot more petroleum to be found and it is time we move forward'.
I think O'Neil is "there", but he has an entire country full of problems and likely his biggest challenge (and need) is to facilitate the development of a rational democratic decision making structure in PNG government. You don't do that by dictating solutions and O'Neil is already likely wielding too much power. His dictating the final solution doesn't move that ball forward.
So anyway, I think we just wait until the decision is announced. Only time will tell when that will be. Maybe the problem is the supermajors need the time to reconfigure other assets for the financing necessary to beat the $3.50/mcf offered by JKM for E/A and pick up chunks of PPLs 236 and 238. "Multiples"