politics and PNG gas revenue is aleays of interest.
They way I see it is that OSH is consistent and paying divs and has helped the previous govt out of a massive hole where they sold off and lost their % in OSH via maq bank and hocking the interest. Basically the PNG govt hocked the interest tro get more cash up front early and got caught with a case of the $ shorts when needed top take interst back.,
If PNG govt plays hardball with OSH they will loose as only OSH and partners has the skill and any "tax "that is tried to be put on effectively just means their income from dividend goes down and OSH would choose to spend $ on exploration outside PNG .
OSH is structured for decades that quite a bit of it's social responsibility goes straight into the local areas in which they work as opposed to central PNG govt so locally they have great support as they give employment, training, roads, bridges, air access schooling rather than support the city PNG politicians. So crippling OSH with tax or restriction would come under great pressure very quickly as locals would realise it would come straight from them and they will put pressure on PNG central govt and politicians. OSH took years to work this out but have it down pretty well on teh ground but it won't stop explosive grandstanding and media articles that politician seed for short term political gain but underlying relationship must remain good otherwise PNG will be broke if the cripple current arrangements.
Consider OSH as a 2nd reserve bank for PNG who can pull strings if it had to but has never used that market advantage unlieke other resource companies. Any retrospectrive actions against current arrangements would stop all investment in PNG even buy the Chinese , korea and Indians etc . Doing a new tax on new resource going forward would simply stop investment flow into PNG and even PNG companies would explore outside. They will simply export alll gas rather than allow electricity generation plant expansion so industry gets crippled etc.
Not saying anything definite with PNFG politics but I must say this is the calmest I have ever seen it in 20 years in regards to OSH and rarely does it rise . The rise may be to do with OPEC deals and rising pressure on oil price and someone using OSH as a market leverage but even that doesn't hold true as gas prices are locked well into the future and there is only a small number of extra production for more ships ATM .
Be interested to know if a scan highlighted OSH or if you are also reading FA or brokers reports as not a lot of posters.
No idea what the answer is and there will always be a discount due to PNG and PNG political issues . There is no definite answers or guarantees in PNG as general population is not real educated and politicians have for years taken advantage favoring regions and local tribes linked to them. Only balance is that you can only unfairly distribute social and economic gains for so long till they revolt and take it physically locally as they don't have any other choice.
OSH Price at posting:
$7.44 Sentiment: None Disclosure: Held
