05-01-2013, 06:36 AM
Total has been very wise in PNG. Years ago they expressed interest in getting in, but they've waited until deciding to partner with OSH in the Gulf of Papua and other licenses around IOC's. They know what's there may not be great, but if they can combine it with a chuck of IOC's licenses, they could control the best license areas in PNG potentially. So last week they went to O'Neill and expressed that they are VERY interested in what they are doing with OSH, but also want to do more. Why partner with OSH in the first place? Probably the same reason Exxon did. OSH as a partner is a big carrot for the PNG government. They own 17.56% of OSH, so anything that benefits OSH benefits the government. Total understands that and could make the play that the combination of Total, OSH and IOC would be nothing but good for PNG as a whole. Phil would hate this as much as anything. OSH has been as big a thorn in IOC's side over the years as Shell. The government is planning on unencumbering their ownership in OSH out of the current budget (Arty Somare pledged the government's ownership in OSH to IPIC as collateral for the government's share of PNG LNG. When they bail that out they will want a return on that. Total can best help them out with this, and they might work with Exxon to assure there is sufficient gas for PNG LNG future trains. All can win with that scenario.