PNG Hi folks,
I think that some of the weakness you are seeing in the share price relates to PNG LNG and its proponents. There is also an active no-confidence motion regarding the President after the recent deadly riots.
Exxon
Exxon put out its Corporate Plan Presentation on December 6th which included the PNG FID in 2024. The question becomes does Exxon have the desire to do this project now compared to other significant projects on their horizon. For example, their offshore drilling in Guyana is significant and could have a better return profile. They also need to weigh what they might do in Mozambique compare to PNG. Perhaps they have the bandwidth for everything (it is Exxon after all) but they have also been clear that they will be disciplined with their capital and carbon requirements in evaluating whether projects proceed.
TotalEnergies
Total put out its shareholder presentation from February 7th and it did not include PNG LNG on the FID list which I think has concerned some people. Total has some great opportunities in Namibia to deploy capital and the Mozambique LNG project is a larger project than PNG LNG and potentially less challenging. The project is run by Exxon so that isn't a big surprise to me that they didn't include it on their FID list in 2024 but it doesn't give you the confidence you would like to see.
Santos
Santos is a mess after the merger failure with Woodside and disspointing production results in Q3. Santos needs to fix its balance sheet and its possible they may not be able to make the journey on PNG LNG.
Alas, this is what it looks like to invest in mega projects in the 3rd World!
The counterbalancing force to all of this is that the world needs LNG and PNG is seen as an important jurisdiction in the New Cold War where China and the Western World are squaring off.
LR