02-16-2013, 09:08 PM
People are puzzling what is meant with non confirming bids. I could imagine that a bidder wants 100% of PRL15 but not the rest of the company. If you look at the costprices you see that the costprice of PRL15 is very low compared to Australian gas. Let us say USD 3.5 / MCF vs 5-8/ MCF. Furthermore, the cost of shale gas in the US are much higher than the present sales price which is not a sustainable situation. So, under the present circumstances it is attractive to buy as much gas as possible. However, if they have to share with IOC, they must form a joint venture. Most managers do not like this, because this is a time consuming affair.