'Tree' pid='26808' datel Wrote:More cash today? Everyone understands cash today, it's better for today.
More non-cash considerations today. Not everyone understands non-cash contributions today, but it's better for tomorrow.
I'd take less cash today for less expense later and a larger train ownership. An in-kind gas contribution.
EnnerOle is apparently selling 1/2 of resource in their first PRL, first PRL of many. Far from a 1-trick pony.
Maybe the non-cash considerations will trump the cash? I hope we get an LNG boat-load of N-CC's.
Which way better positions the Gov't for buy-in and back-in obligations?
Hmmmmmm......
Even in a world that does not exist-- having nearly perfect information and great foresight-- sometimes it is hard to know which alternative of these is best. And it may be even harder for the experts to explain to the decision makers. This is not a simple NG sale, as you state.
These considerations may well be part of why all is not yet finalized. Let's say that IOC and XOM entirely agree at this moment to formulas, terms and conditions on a combo of front end cash and many operational and financial tradeoffs over a longer term. Geting to that point alone took time.
There are then partners and the PNG govt. as stakeholders to include in the mix, and they may not see the various terms in the same light. Next, any little changes to accommodate various interests will ripple through what some have described as a 1200 page document, with various lawyers, accountants and microeconomists, and senior managers providing assessment, input, and editing.
Getting it right upfront is very important. A common understanding, mutual good will and trust, and a sense of fairness should result from a good deal and a good contract. Legislation in contrast is often the lesser of several evils, and its process has been described as a lot like making sausage, something one should not wish to see. The USA's "Obamacare" is a great example of how NOT to do it, so as to have a tangled mess years later.
I'd like to see that all parties take the time to get this right the first time. The resources and intentions are there, let's make a complex deal or deals as clear as possible and as lucrative for the long term.