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The Irish economy owes too much to the EU at €225billion to be able to attach itself to anybody else. Otherwise, it would probably have left the EU along with the UK. Many years ago the idea of turning Ireland into the 51 state of the US was mooted but it came to nothing.
As for offering oil in payment for the survey vessel, the whole deal with APEC is it is a zero carry. If oil is found in commercial quantities in Barryroe and it is developed Providence's and Lansdowne's costs will be repaid in oil. If, on the other hand, commercial oil is not found APEC carry the can for the total costs and Providence and Lansdowne pay nothing.
Over the years there have always been doubts about Barryroe. Six wells have been drilled on it and 4 tested with all flowing oil. However, there is no guarantee that the six wells are interlinked. There has always been a question of faults as the oil layer is reckoned to be thin at about 25k but covers about 400km sq. If the oil is not contiguous then numerous wells will have to be drilled to retrieve it whereas one big pool of oil means a few wellheads are needed.
As for Barryroe being bought as part of a deal with IOLAR it should be noted that any oil found in either has to be sold to an Irish company at arms length and cannot be just spirited out of the country. So either CNOOC have to set up an Irish company if it has found oil in IOLAR or it can use an Irish company to trade the oil. In that case EXOLA would be the perfect vehicle to do it as it could be the trader for both IOLAR and Barryroe. EXOLA is a totally Irish company except all its shares are owned by the Providence Resources parent company.
Why don't PVR offer some of the future oil production as payment for the survey vessel?
If I was CEO of the survey company I'd think what is the risk of this field not being developed once the survey is done - maybe 30%. So I could accept $10 million in cash, or I could accept $20 million in the promise of future oil but with a 30% risk. The choice in effect boils down to (1) $10 million, or (2) $14 million once the risk is factored in. Hence as CEO I would be happy to supply the survey vessel for a legal document granting me 350,000 barrels of crude oil to be delivered to my company no later than 2023.
In fact why don't Providence just pay all the contractors needed to produce the oil with legal documents granting them so many barrels of crude oil once it is being produced?
So why doesn't the US government just give the right to develop Barryoe to Exxon Mobil, Chevron, Anadarko, Conoco, Apache, or any one of the hundred other American oil companies with experience in developing shallow-water offshore oil fields?
It makes no sense to block the Chinese just to punish them for trying to contribute to the global economy. Where would America be without all the products (iphones, ipads, computers, clothes, steel slab) that are manufactured in China at a far lower cost than the US economy could achieve.
I actually wonder if PVR were naive to approach a Chinese company to develop this oil field. I would of felt happier personally if they had turned to American companies to develop this field - I'm surprised the government didn't try and link keep the Irish economy linked-in closer with the American economy. For sure the Chinese produce cheap goods - but I'd say the Americans produce quality goods. Would you rather have their satellite technology or the Chinese's at your disposal?
I say again
If COSL are the money men behind the scenes then COSL can just use one of its own fleet to do the site survey and the spud (if necessary) until the American's allow the money to clear.
I would imagine the Chinese have told Providence they're in for a long wait so cut costs to the bone.
The yanks are punishing the Chinese for using the Renminbi to buy oil from the Iranians.
Hold on.. Lets remember we were informed on 8th July that providence "had received a HSBC remittance notification from Apec's funder for the transfer of $10m in favour of providence's bank account in Dublin". We were then informed on 15th July that the "company can confirm they have received a letter from the legal representatives of APEC's funder advising that on 9th July the funder had arranged for the remittance of $10m from HSBC to providence's account". Since then we received 4 or 5 more RNS claiming providence had received "further assurances" that funds are in process of being transferred. To believe funds are not forthcoming you have to believe that either the funder forged the remittance notification and legal letter they provided to PVR and are intent on stringing people along OR PVR didn't receive any evidence and instead made it all up. Come on seriously ?? Have some faith in the system and integrity of PVR board, whatever about TOR management performance its extremely unlikely that anything malicious is going on. Given the reputational damage this must be doing APEC if they were being misquoted or misrepresented by these RNS's surely they would have spoken up by now ? The survey vessel has been instructed for month end,, demonstrating that providence are confident funds will arrive and if NOT they must have plan B loan facility arranged, as a fund raise would take months. Keep the faith ! Its always darkest before the dawn.
I presume the mobilisation fee for the Kommandor is due in advance, as nobody in their right mind would do C.O.D. to a company in PVR's position. As the site survey is dependent on the APEC money, the mobilisation fee will be wasted if the money doesn't arrive. Does this indicate some confidence on PVR's part that the APEC money is in the pipeline? There's a big difference between saying they've been TOLD the money's coming (i.e. enough to legally cover their asses) and that they have some evidence to convince them it's VERY LIKELY the money will drop.
survey vessel next week not the rig
Spread a few 000K's across into LOGP . Less chance of big dilution there.
Personally think both will do well as confident of cash landing soon.
Rig is mobile by end of the week. It's going ahead one way or another
I'm sick of hearing of backstops too.
How can a backstop mean both a deadline and a border?
I rank it with that other idiotic word, lockdown, and refuse to use either.
PVR have extended their deadline, but in reality it isn't a deadline either, because real deadlines can't be extended.
We still don't know why the payment has not cleared or whether it ever will.
I am disappointed to see this latest update - extension of backstop (I wonder what Providence would have called it if we did not have this new Brexit vocabulary ?!). I have been consistently upbeat about this sequence of events (the loan is obviously not going to be paid until the site survey consent is granted etc), and the management's initiatives in dealing with the events unfolding in front of them, but re-stating the urgency of raising funds to the third week of September takes the remaining management team to the other side of the Annual General Meeting, which is their next credibility hurdle. Consequently there is a question about the accuracy and meaning of the information being provided. Obviously Providence do not want to state anything that could leave them open to litigation by shareholders, but the company is at a point where there is nothing to recover anyway, so the potential liability is a matter of the conduct of the Directors. At the same time, when published on September the 20th, one of the main points of the FAO is that it is 'Binding', so presumably there are grounds for litigation against APEC in the event of non-performance, but APEC is registered in HK, operating from Beijing, and Providence clearly does not have the funds or time to pursue the level of litigation this matter would require. This leads one to wonder what is actually going on. The FAO published on the 20th September 2018 stated 'APEC will proceed with payment on signing', which clearly did not happen. And this was before the cluster-shambles with the site survey application emerged. On the 5th June when it was revealed that APEC had still not paid over the loan, it was described by Providence (who are responsibile for the accuracy of the statement) as being 'in part due to the change of the composition of the APEC funding mechanism', which is a (legally) meaningless explanation. Bearing in mind, the 'Binding' FOA commits APEC to 'cash ADVANCES for operational costs'. Today's statement describes 'reassurances that the loan is in the process of being paid'. These statements are being carefully drafted with the input of whatever legal advice Providence can still afford to ensure that they are not false, but 'in the process of being paid' is a wholly different meaning from 'is being paid'. I have no doubt that behind the scenes the management are doing all they can to rescue this project, but today's statement gives them cover should we get to the AGM with no APEC funding, and positions them to continue to say 'we are working on it'. I presume the representatives of the larger Shareholders are asking these questions, but eveyone is a victim of stockholm syndrome here - the share is too cheap to sell.
In relation to the overall timescale, Providence probably recognise that if they do not have some part of Barryroe spudded by the General Election and formation of a new Government in Ireland (Feb/March 2020), their entire business model is over.