Yes, they will be paying him. But if they are serious about LNG - and they are - they need the skills.
Last AGM, one of the questions I asked DC-10 during the meeting was about the viability of ESG doing LNG themselves. I challenged him on whether ESG have either the money or the skills to do it themselves.
Well, he was limited to what he could say 12 months ago, but since then an awful lot has happened and those questions are being answered with actions:
Getting Hitachi-Toyo on board, and now Marubeni. (btw, thanks Santos for your slowness in acting... it has been most helpful to increase ESG's strategic options) :)
And these Japanese giants up a world of Japanese contacts and finance options. A cornerstone equity partner like Marubeni, other offtake (and equity) partners in the wings, Hitachi-Toyo doing the LNG plant stuff.
And this new appointment. Well, as DC-10 said 12 months ago, we can always import the skills. And they are.
Why do ESG need Santos again..? ESG shareholders are going to find the offers from the Japanese a lot more attractive than the boys in short pants from Adelaide. Bypass the middleman, and reap the full benefit of LNG prices. Who needs Santos to 'wholesale' our gas for us, when we can sell equity stakes and the gas itself at full-tote odds?
ESG is full steam ahead with their own LNG project. So if Santos wants ESG, they will have to move. If not, Santos will become that passive investor before the year is out (whether they like it or not). And Santos can explain to their shareholders and analysts why spending half a billion dollars on a company whose gas is going to third parties (on effectively borrowed money) is a good use of capital.
But all ESG holders know that a bid for ESG is coming. Santos' Kogas deal is reported to be a week away...
Yaq
ESG Price at posting:
86.0¢ Sentiment: Buy Disclosure: Held
