'ArtM72' pid='70222' datel Wrote:Anyone else think that absent a big piece of IOC to sell down Botten has no means of paying of Civelli if GLC estimates are found to be anywhere near correct? Is that what is driving this deal? Other than pride and avarice I see no other explanation. The deal certainly provides nothing in the way of new efficiencies or symbionics other than eliminating the need to rebuild IOC's exploration capabilities. Keeping the ONeill government afloat in the face of an otherwise embarrassing OSH share price crash might be the ultimate reason for what is occurring.
Actually that is an interesting take, Art. If you look at the deal from an economic point of view you do see possible synergy benefits (Botton speaks about $3B, as it happens), but with Total getting:
Following the sell-down to Total, Oil Search expects to have an equity interest in PRL 15 of up to 37.4%, or 29.0% post government back-in, with Total holding an equity interest in PRL 15 of up to 62.1%, or 48.1% post government back-in. This equates to Oil Search selling down 60% of InterOil’s 36.5% (28.3% post government back-in) PRL15 interest to Total.
Which gives Total control over PLR15 pre govt. buyin. Will their interests be aligned? Difficult to tell, but this could be a crucial element in what happens next. If Total favors their own (Papua LNG) plant, who's going to stop them? Probably not the PNG govt, they said they favor two plants. Exxon might yet have something to say in this..