15 February 2010

Hibernia South newser

The consortium behind the Hibernia South project is expected to hold a news conference at the Delta Hotel in St. John’s at 11:30 AM, Tuesday, February 16. Sources indicate natural resources minister Kathy Dunderdale will take part in the news conference.

No word on the details of the announcement but officials of the provincial government’s oil company are reportedly briefing opposition politicians at 8:45 AM.

The announcement may be about the start of construction.

In completely unrelated news, government pollster Corporate Research Associates is currently in the field.



Wm. Murphy said...

An extra 3 billion from forcast...good news indeed

Ed Hollett said...

Hang on, I have another gainesburger of assumptions for you to feast on.


The revenue projection is based entirely on the assumed value of a price of oil.

I can assume any price I want and make the thing go up and down like magic.

The real news today is something else and it ain't the projected revenue.

Wm. Murphy said...

The revenue projection is based entirely on the assumed value of a price of oil.

So are you saying that the assumption price is all wrong?

What do think are the real numbers? Let's for a minute forget about the pollesters...actually fuck the pollesters because I could care less about the tactics these 8th floor egomaniacs employ to goose the numbers. It's like the annual garden party with the tired games of crown and anchor!!

I would like to know how accurate, or out to lunch, the assumed price of oil will be? There must be some basis or bench marks that they use to project an extra 3 billion...one would assume!!

Ed Hollett said...

Well it is as real as saying the price of oil will be 20 bucks a barrel for the life of the project or 1,000 bucks a barrel.

The number they used is made up for the purposes of doing an estimate. It is as real as any other imaginary number.

We will know the cash value when we get there.

I wouldn't be surprised BTW if the number comes from Wade The Favoured Economist since he used similar assumptions the other night at MUN. Of course those numbers are really as fictional as his aluminum smelter or my personal favourite, the claim that the 2005 fuck off deal was worth more than twice what it actual was.

Wm. Murphy said...

We will know the cash value when we get there.

Every day there are a number of geeks who project and assume where oil prices will be in the future.

You didn't mention whether you think the numbers are out to lunch or accurate? Yes they are estimates...obviosly!!

But are they valid and are they based on insightful and accurate indicators.

Your distain of the pagentry is getting in the way of whether you think there is a modicum of truth to the claim

Ed Hollett said...

My disdain is for the spin, hype and pure bullshit that gets in the way of the truth.

I loathe the unmitigated ignorance that underpins the vast majority of what is said by reporters and others about stuff like this.

And in case it wasn't clear I think the numbers are as out to lunch as Wade's bullshit about a smelter or his claims about the value of the 2005 fuck off money.

I don't believe the government revenue projections any more than I accepted his crap on the other stuff or I accepted the bullshit that oil would be 200 a barrel by the end of 2008 and would stay above 150 from there on out.

I don't know how much more plain I can make it that the assumptions are utter tripe.

Oil will be whatever it is. The real question is how the whole royalty regime is structured and how it delivers across a range of scenarios.

As it is, the largest part of the government cash in this - whether it winds up being 10 billion or 100 billion - will be delivered by the 1990/2000 royalty regime.

The royalty regimes developed from the 1980s onward have proven themsevles to be very smart. They work well and deliver cash across the full range of scenarios. in the case of Hibernia, they will deliver all the cash.

I am very confident in saying - and I also suspect the finance and NALCOR guys know as well - that these 'super-royalty' provisions for Hibernia South are imaginary. The cash they get will come from the old deals.

And as for equity, the average taxpayer won't see a dime of it in the public treasury.

Wm. Murphy said...

Sounds like you ran out of syrup for your pancakes....with my grasp of the obvious... I sense a level of distain on this subject

BTW, I couldn't agree more

Ed Hollett said...

No b'y. There was plenty of syrup.

Having a low tolerance for bullshit doesn't mean I don't enjoy myself.