Bid to banish uncertainty over resource

Justin94360 · 11-23-2012, 11:14 PM

Does this tie in with Binck's Shell rumour?

http://www.upstreamonline.com/hardcopy/n...278860.ece

The PNG government had previously instructed InterOil to introduce an LNG major, and it is understood InterOil has received expressions of interest from players including Shell, Chevron and national oil companies.

Shell was long ago identified by the government as the preferred LNG partner, along with the national company Petromin, because of its LNG capability.

Shell has previously confirmed its interest in Gulf LNG, and a spokesman said in an update that the supermajor had “looked at a number of potential opportunities in PNG, including the InterOil project”.

“While we have been in discussions with InterOil intermittently over the last year or two, at no time have we made any formal proposal to them, given that we were unable to access all available technical data,” added the spokesman.

However, sources said Shell’s interest indicated it must be satisfied from a technical standpoint that the gas resource is there to underpin the project.

“I would think that for any of the major companies that have been talked about as possibly wanting to get in, they would insist on operatorship of the project from upstream through to export,” said a source.

The ne wly remodelled Gulf LNG project aims to begin with a single LNG train producing between 3.8 million and 4 million tonnes per annum with feedstock gas from the Elk-Antelope fields.

Bincbanker · 11-24-2012, 12:48 AM

RDS has thru Petromin access to all the data they need , I would think

but even if they do not , how on earth could they show continued interest after 2 years

ebster123 · 11-24-2012, 12:53 AM

RDS can show interest because they KNOW IOC has a major find!!!!

Bincbanker · 11-24-2012, 01:02 AM

'ebster123' pid='13202' datel Wrote:RDS can show interest because they KNOW IOC has a major find!!!!

I agree , they know exactly what they need to know , they would make JR Ewing proud

TxPm · 11-24-2012, 02:26 AM

In my opinion all this article is doing is solidifying what Phil told us on the CC:

"The two principal uncertainties for a major company considering joining the InterOil-led Gulf LNG project in Papua New Guinea involve the gas resources, and having control of the entire development, according to executives."

1) On the CC Phil repeatedly said that the bidders weren't ok with the initial size of the project which is why they made it a "staged" project. I believe this answers the resource question
2) Phil tried to point out several times on the CC that the govt wanted their gas in kind. I found it kinda strange how big of a point he was trying to make out of that And it seemed VERY important to him but it seemed like the analysts weren't latching on to Phil's undertone. Honestly at the time i didnt see the major importance in it either BUT maybe this article provides some clarity. If the SM's were having a problem with having control of the entire development & they didn't want to deal with the govt & IOC "getting in the way" then maybe this in kind agreement is huge bc while they are bidding on the same amount of resource size now they can control the entire project & just give the govt their gas and say here is your piece now get out of the way.

Once again this is just my opinion

efi426hemi · 11-24-2012, 05:54 AM

We need to be very careful with this article. It has apparent quotes from executive, spokesman and a source, but no names. Well, I have owned 3 companies in my life, which qualifies me as an executive. I also appointed my wife to be my spokesperson and the source is my nephew who just so happens to be in my will. Now lets look at those quotes again.

Shell has previously confirmed its interest in Gulf LNG, and a spokesperson (Hemi's wife, who may or may not be biased) said in an update that the supermajor had “looked at a number of potential opportunities in PNG, including the InterOil project”.

“While we have been in discussions with InterOil intermittently over the last year or two, at no time have we made any formal proposal to them, given that we were unable to access all available technical data,” added the spokesperson (Hemi's wife, who may or may not be biased)

However, sources (Hemi's nephew who happens to be in Hemi's will) said Shell’s interest indicated it must be satisfied from a technical standpoint that the gas resource is there to underpin the project.

“I would think that for any of the major companies that have been talked about as possibly wanting to get in, they would insist on operatorship of the project from upstream through to export,” said a source (Hemi's nephew who happens to be in Hemi's will).

So I have 3 words summarizing this article - Are you serious, really, WTF!!! Just my point of view, which may be skewed by the cold temperatures we are experiencing in the land of the igloos.

H&H,

Hemi

p.s. I have never seen an igloo and I haven't met Joe from Canada, but I am sure he is a really nice guy

Getitrt2 · 11-24-2012, 05:55 AM

Tx, the fact that you've fallen under the influence of the shorts based on your comments here is a testimony to the misinformation and uncertainty and the effect on the stock they've been able to create with their crap. The content of this article, which doesn't even fit the title, with its references to very old supposed Shell quotes, its anonymous "sources" (did you read what CFO Visaggio said about such "sources"?), the claim by the "source" that Shell had not been able to access "all available technical data" and had uncertainty about whether "the gas resource is there to underpin the project", and its appearance on Nov 22 is another distorted bunch of crap with shorts behind it. There is no such uncertainty about the gas resource; and if there were, Shell would not have much interest.

Where else have you seen indication that any and all bidders would "insist" on having control of the entire development and "operatorship of the project from upstream through to export"? I feel sure that is false. I expect IOC to continue to develop and operate the upstream. As IOC and the government would want, some bidders would operate the midstream (CSPs and LNG plant), and others would bring in a separate experienced plant operator. There would be one arrangement for the first phase plants (approx. 4 mtpa LNG plus probably additional processed gas for PNG), and probably a different one for the second (with the government having an option to full rights to that).

The bidders were not totally opposed to starting with a 7.6 mtpa plant. They preferred a smaller first phase for the same reasons IOC preferred that, with the amount of gas resource not the primary concern, although a phased project does reduce the risk there. IOC is certain they have plenty of gas, and if the bidders had big concerns about that, they would have concerns about PNG getting so much of the gas. The primary advantages are getting to production and cash flow sooner and at a more opportune time with respect to expected market supply/demand and pricing, and with easier financing.

Perhaps it would be helpful if you would forget about this distorted article intended to mislead and create uncertainty and read or reread the conference call transcript. Phil did want people to understand why the government wanted gas in kind, and why it was good for PNG and also good for IOC and its other partners. While helping the government and people of PNG, and still giving them access to an LNG project, it enables IOC and its partners to develop the first phase in the manner they consider best, while getting more LNG without having to finance/carry any portion for the government in the LNG plant itself, although there will have to be CSP capacity for the government at some point, provided at cost up to 22.5% and beyond that at commercial market price as with the other partners.

If you're being sucked in with this short crap, think about the effect on others in the market. I guess you could consider some of this as "just my opinion" also, but it is based on a great deal of due diligence, including some reliable sources as well as research. Read not only the cc transcript, but other company communications and quotes in the press, Morgan Stanley, Raymond James, and other informed posters here and elsewhere without a short bias. And always be highly suspicious of shorts and anonymous "sources" in the press or on line.

~~bertl05~~ · 11-24-2012, 06:18 AM

Getit thats a bit harsh. While its unwise to put much stock in these "unamed" sources, it's also never a good iea to blindly swallow all of what ANY company says, wether it be on a CC or otherwise. The best method is to always have a healthy dose of skeptism. Based on the reality that much of what mgmt has said over the last several years has not panned out yet, one must be careful to think that things said are facts. Many many things are out of IOC's control, therefore best intentions don't always come to fruition. We really have no idea what any of the bidders feel about the size of the resource or what configuration they desire, or how much they are willing to pay upfront and how much they will finance. You can say that this 40% has all been the shorts fault, but I doubt thats true, nor has it all been IOC's fault. The truth lies somewhere in between. I certainly am not being sucked in by anyones crap. The doomsayers are wrong IMO as are the $200 per share $385 SD'ers. Somewhere in the middle is my guess. I happen to appreciate the varied opinions here. Obviously neither TXPM or I are stupid enough to listen to the paid bashers (of which all are on yahoo). But neither is it wise to ignore the risks and complexities of getting a large project going, financed and built in a timely effcient manner very wise.

~~bertl05~~ · 11-24-2012, 06:19 AM

$ 3.85 per mcf SD'ers

***admin*** · 11-24-2012, 06:28 AM

Have to agree with that, Bertl05

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