'Northoil' pid='74739' datel Wrote:[quote='MartiniStocks9756' pid='74737' dateline='1469407116'] So PET thinks game over. Disappointing how the game is played. The one piece I do not get is how the BOD allows the bidders to have a CAP. Seriously. Why should there be a CAP for XOM benefit? (I know its like when the parent says because I said so) So why should they not pay if it is 12 TCF? And why are these super majors so friendly to each other? This is the largest Asian find of gas. 10 years from now they will have wished they bid higher. Business is business. In other businesses it is win and beat your competition. But what I hear from the professionals here it is well we have to get a long in the Middle East so do not rock the boat in Asia. Really?
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There's a serious disconnect. The BOD doesn't "allow" anything. Exxon makes an offer and says "oh yeah, and it's capped at 10.2Ts" A cap on an aspect of an offer is entirely routine. IOC can, and probably did, try to negotiate that away, But Exxon says "no, that's the deal. Take it or leave it." IOC has judged that, on balance, it's the best deal on the table, so they have to go with it. The fact that OSH had no cap and that IOC accepted Exxon's maybe tells us that there's not a lot of upside to certification beyond 10.2 Ts anyway.
I don't know what "professionals" are saying that Exxon, Total, Shell, etc. are one big happy family. Yes, joint venturing is common practise in the industry, generally because capital costs are so high and mother earth so fickle, you have to spread risk. However, companies, especially the majors, always act in their self-interest. That includes this deal. People have railed against IOC management. That's certainly debatable. But if Exxon were stealing something, somebody else would jump in. There are two players with a huge competitive advantage: Exxon and Total/OSH. If Total does not answer, it tells me they're at their economic limit. So it will be over if we don't hear from Total shortly
Good info here. I disagree on one small point.I don't think Total has to be in a big hurry here. I think Total like Exxon can waIt till the last minute to bid. But thats a small point.