I agree for most part but we have to question what OSH's goal in all of this is. They did pay up to get in, but you really need to read all of what they have said. We know that while IOC was finalizing things with Total, OSH was also stating they were negotiating. Then I have yet to see O'Neill praising the IOC/Total lash up. From there OSH continued to say they were negotiating still at year end while O'Neill was telling the Mining and Petroleum conference that the government was now looking at the viability of a new plant versus aggregating gas and maximizing current facilities first.
Then while IOC was negotiating to try and close the PAC LNG interests we hear it's not going well and suddenly OSH halts their stock from trading for a couple of days, and they announce that THEY are acquiring those interests and they are either selling shares to PNG or will do a capital raise set up with UBS. Meanwhile O'Neill cans Duma, then Polye for not supporting coalition plans. Polye says the process was too hasty and not sound and today it comes out that he accuses OSH of "insider trading" and O'Neill of bypassing policy and taking on unplanned and unnecessary debt. We have to question why OSH had this sudden sense of urgency right when IOC and Total are trying to get their deal closed, and OSH openly admits that they had no discussions with Total about their purchase of interests. IOC and Total then had to scramble to respond to OSH's move.
Then we see OSH and the government calling EA the largest undeveloped PNG resource and look forward to monetizing this asset the quickest and most economical way for PNG. An interesting presentation to look at is OSH's recent Goldman Sachs investor presentation. OSH talks about its Gas Growth Strategy and clearly states that it has "brownfield" (existing plant) maximization and LNG expansion as their primary goals which are "aligned closely with the PNG government". Listed resources for that strategy include EA gas in PRL 15. Botten has been using this LNG expansion language continuously as has O'Neill. OSH mentions the possibility of a new LNG plant for EA gas but mentions that both the expansion of PNG LNG and a standalone plant are economically viable.
I think we need to understand that for a long time OSH has been the PNG government's strategic public O&G company and OSH is seen by companies coming in to PNG as the strategic company to work with because of their influence with the government. And OSH understands their status very well. Botten is not bluffing or exaggerating their ability to influence decisions of how resources are best used in PNGs best interest. Total and IOC understand this also I believe. OSH's move clearly changed things for IOC/Total. Total says OSH is a great strategic partner but IMHO they did not plan on OSH coming in this way.
IOC and total clearly want a separate LNG plant and I think they believe they have plenty of gas for this and more. The big question of where gas goes from PRL 15 if far from decided I think and even when they prove up plenty of gas there will be plenty of discussion. I believe OSH made this swift and unexpected move now for the purpose of influencing PRL 15 petroleum resources instead of waiting to possibly buying a % from Total down the road after IOC and Total close their deal. If they just wanted in on a new plant, that's what they they would have done, unless Total had someone else they were talking to that we don't know about.
While I don't believe that Total is trying to work against IOC in some way, I do believe that OSH made this very bold move in this way so that their close alignment with the PNG government wants/needs could have influence very early on. Exxon may be playing a direct or indirect part in this also. Again, had the deal with the government not worked so that OSH could buy the PAC LNG interests, they were going to do a capital raise to pull it off. That was a very quick move. That plus what they and the government have said during this and after beg the question of why it was done this way. It won't take long for us to get the answer to that and more.
Then while IOC was negotiating to try and close the PAC LNG interests we hear it's not going well and suddenly OSH halts their stock from trading for a couple of days, and they announce that THEY are acquiring those interests and they are either selling shares to PNG or will do a capital raise set up with UBS. Meanwhile O'Neill cans Duma, then Polye for not supporting coalition plans. Polye says the process was too hasty and not sound and today it comes out that he accuses OSH of "insider trading" and O'Neill of bypassing policy and taking on unplanned and unnecessary debt. We have to question why OSH had this sudden sense of urgency right when IOC and Total are trying to get their deal closed, and OSH openly admits that they had no discussions with Total about their purchase of interests. IOC and Total then had to scramble to respond to OSH's move.
Then we see OSH and the government calling EA the largest undeveloped PNG resource and look forward to monetizing this asset the quickest and most economical way for PNG. An interesting presentation to look at is OSH's recent Goldman Sachs investor presentation. OSH talks about its Gas Growth Strategy and clearly states that it has "brownfield" (existing plant) maximization and LNG expansion as their primary goals which are "aligned closely with the PNG government". Listed resources for that strategy include EA gas in PRL 15. Botten has been using this LNG expansion language continuously as has O'Neill. OSH mentions the possibility of a new LNG plant for EA gas but mentions that both the expansion of PNG LNG and a standalone plant are economically viable.
I think we need to understand that for a long time OSH has been the PNG government's strategic public O&G company and OSH is seen by companies coming in to PNG as the strategic company to work with because of their influence with the government. And OSH understands their status very well. Botten is not bluffing or exaggerating their ability to influence decisions of how resources are best used in PNGs best interest. Total and IOC understand this also I believe. OSH's move clearly changed things for IOC/Total. Total says OSH is a great strategic partner but IMHO they did not plan on OSH coming in this way.
IOC and total clearly want a separate LNG plant and I think they believe they have plenty of gas for this and more. The big question of where gas goes from PRL 15 if far from decided I think and even when they prove up plenty of gas there will be plenty of discussion. I believe OSH made this swift and unexpected move now for the purpose of influencing PRL 15 petroleum resources instead of waiting to possibly buying a % from Total down the road after IOC and Total close their deal. If they just wanted in on a new plant, that's what they they would have done, unless Total had someone else they were talking to that we don't know about.
While I don't believe that Total is trying to work against IOC in some way, I do believe that OSH made this very bold move in this way so that their close alignment with the PNG government wants/needs could have influence very early on. Exxon may be playing a direct or indirect part in this also. Again, had the deal with the government not worked so that OSH could buy the PAC LNG interests, they were going to do a capital raise to pull it off. That was a very quick move. That plus what they and the government have said during this and after beg the question of why it was done this way. It won't take long for us to get the answer to that and more.
