'sydbod' pid='26842' datel Wrote:Let me take off my IOC shareholder cap and put on my OSH and Santos caps, and provide perspective from the other side for a change. 1) PNG LNG is the only game in town at the moment. 2) IOC is just small fry with virtually no cash reserves and NO banks will lend it billions to construct a LNG plant by themselves.(no proven track record) 3) PNG LNG wants at least another 2 trains (3 and 4) 4) The drilling for PNG LNG resources is behind by around 6 months so the final determination of available resources can only be done towards end of 2014. 5) No plant planning for trains 3 and 4 will be started before end of 2014 until all resources are determined. 6) IOC requires money as soon as possible so that it can continue with its exploration and own LNG plant. (therefore IOC is stuck with this initial deal for money from XOM) What should XOM do ......... simple... 1) try to screw IOC for as low a price for their gas as possible and use the delay tactic for as long as possible. 2) Delay the deal as long as possible so that PNG LNG money goes to IOC as late as possible as the PNG LNG partners don't have much free money left to play with. Put on OSH/Santos and IOC caps now ....... It is a cat and mouse game being played until it can not be drawn out any longer. Yes we will make good money on our IOC shares but not a huge amount early on as many people may think on this forum. IOC's real future will be in about 6 years time when they start getting LNG from their own plant with partners other than PNG LNG. PLEASE don't all shoot me at once as the above is only my speculation based from my view as a share holder in OSH, Santos, and IOC.
Legitimate hypothesis. I like the thinking even though the thoughts are disturbing.
There are others who would like to see IOC's gas kept off the market as long as possible. The Aussies for example. Then you never know what Morgan Stanley is up to. They have acted to control the American aluminum market with their warehousing venture in Detroit. Who's to say they aren't effectively "warehousing" IOC gas through contract negotiation delays to protect other investments around the world? We just don't know.
Perhaps we'll hear a deadline announced by IOC in a couple of weeks. XOM signs or E/A goes to the next bidder. Sure, we lose another three months but given IOC history that time frame is beginning to appear like the blink of an eye.