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Gold/Mining/Energy : ARAKIS: HIGH RISK OIL PLAY (AKSEF)
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To: Zeev Hed who wrote (6730)7/28/1997 10:40:00 PM
From: Razorbak   of 9164
 
Zeev: The pipeline cost was about $950 MM when sized to 150,000 BOD.

Can you please point me to a specific source for this information? Once we have some firm data, then we can probably put this issue to rest.

Frankly, I think that the general shareholders should recognize that Lundin is not interested that much in his investment of about $40 MM in Arakis shares, but much more in assuring he can get the oil out of there without coming up with $600 MM for hiw own pipe. If he does not strike a deal fast, the other drillers in the area (China and of course his own Malaysian partners in 5A) are going to grab the capacity. That is why he wants to have some control over Khan or have his man in.

This is simply not true. The pipeline will be a "common carrier" transportation system. This means that, in effect, all eligible shippers are guaranteed some access to a portion of the pipeline's total thruput capacity. This is a very common set-up in highly regulated utility-type industry segments. See the attached link for an example of the procedural requirements for eligible shippers on another "common carrier" pipeline.

chevron-pipeline.com:96/procedre/newship.htm

The rest (loans etc.) are just Canards.

I disagree. IMO the unsecured loans are a very clear example of what the Street hates about this company, and Lundin is absolutely right to raise this issue once again prior to the upcoming shareholder's meeting.

Razor
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