09-29-2014, 01:33 AM
In the 19th century a famous English economist, Ricardo, said: Corn is not high because the rent is paid but an rent is paid because corn is high. In other words Oil companies are calculating the break even price of the future projects.The cheapest projects get priority. Total considers the E/A field as a cheap project and was willing to pay a high license fee to IOC. Ever since the deal was closed, the gasprice went down considerable. It remains to be seen if Oilsearch/XOM are still eager to realize a large expansion.