Legal Nature of the Papua New Guinea Petroleum Arrangement

[Palm]

Also, the Law says IOC will have to carry the government's portion. But even if they do Collin has said at that (PDL granting) point IOC monetizes and can borrow against it. Law says carry is considered loan which means IOC can charge The State market rate interest. Collin has said that before too. So in the end the government usually decides to front load because they have more options and it's developer friendly. This is a reason the government tends to hold PDL grant until all is in order; it gives them time to negotiate their buy-in. We know both JAPEX and Shell have offered to provide the government's sunk costs. Very likely something government is making a requirement for this project as we know they are broke right now. IMHO this is one example of where the workings of the O&G Act are different than the letter of the law.