Final investment decision on Ichthys LNG — $34 billion (2012)

What it meant to bet on going it alone

This decision can be read as a wager: an attempt to acquire, with its own money and its own negotiating power, the standing of an "operator" — the position that producing-country governments take seriously. Fourteen years from the sole acquisition of the block in 1998, ten from the discovery of Ichthys, all of the exploration, technology and financing accumulated in between was concentrated into a single number, $34 billion. Behind the willingness to commit more than its own equity lay an urgent recognition, proper to a resource company, that so long as it remained a mere participant in other people's ventures it would accumulate neither a track record nor bargaining power.

What followed also showed that the rightness of such a decision is not proved by completing the construction. Even after schedule slippage and cost overruns brought the plant into operation, earnings swung with the level of the oil price, and trust as an operator is built only by accumulating years of stable supply. An investment that began from the limits of going it alone and was carried through by merger, equity issuance and project finance in turn suggests that, for a resource company, building a track record acquires meaning not through one decision but only through a long sequence of execution.