chinese, page-102

Hi Gasbag

Yes, patience is a virtue but I don't think we need much of it for NSE from here, same for Buru too.

Apparently Buru will be taken out or at least a big portion of it will be grabbed by a major sooner than later. Eventually they need $500m for pipeline if they want to move the gas to Pilbara, therefore they have to sell a stake as Eric said. If the plan is changed to moving to gas to James Price Point, Buru still has to sell a stake. That time they would have to pay for the Capex of pipeline and LNG plant maybe.

NSE might have a bit longer time however these two majors, COP and PC will act very quickly if they find considerable size of any hydrocarbons. I wouldn't like it to happen but unfortunately, that would be the case. I don't know at which stock price we would have when the takeover offer happened. I hope we could be around $2 that we can get a $3 offer at least (which is my target (:-))

These consolidations in shale O&G industry in Australia which we have seen very big two of them in one week; PetroChina and Chevron, tells me that there is no more room in this market and the majors are trying to grab whatever is available here.

Even the NSE's Goldwyer Project which is only at its beginning stage, is attracting world's biggest state O&G company PetroChina represents the hungriest nation for energy on earth.

Majors in shale O&G business in Australia;

Conoco/US, Chevron/US, Mitsubishi/JAP, BG Group/UK, PetroChina & Sinopec/China, Statoil/Sweden, Total/France.
(And some mid tiers are also on the scene like Hess/. (I may forget some of them)

Only 2 majors out of the unconventional shale game in Australia; Shell and ExxonMobil.

ExxonMobil is not interested in unconventional CSG business either. But Shell did. Shell bought 30% of Arrow Energy tenements during CSG bonanza then taken over Arrow together with PetroChina which is our JV partner today. (Conoco is partnered with Sinopec & Origin in CSG business)

I was thinking about Shell earlier today. I said there were questions here;

- Then, where is Shell now?

- Why isn't Shell interested in shale O&G business even though its CSG LNG partner PetroChina is already in?

- Is Shell going to be the late player?

Then, I realised something interesting!

NSE's Non-Executive Chairman Arthur Dixon has had over 40 years with Shell and of that, more than 20 years in the LNG business! Arthur has closest ties with Shell, LNG business, Shell's Asian LNG business more than anyone. Our chairman is a landmark man in LNG business I reckon. I am wondering if Shell is going to involve in shale LNG business in Canning Basin? And how is that going to happen?

"Arthur joined Shell as a refinery engineer in 1964... Then he spent time as Industrial Chemicals Manager in Shell’s refinery in Sydney... In 1978, Arthur joined the North West Shelf LNG Project in the Project Co-ordination Group and became Project Co-Coordinator in 1981. He was seconded to Shell’s London headquarters during the period the venture went to Final Investment Decision on the LNG Phase, returning to Australia as Leader of the NWS Sellers’ Team up to delivery of the first LNG cargo in 1989."

"He was then again seconded to Shell’s London Office where he filled a number of roles over the next ten years, including representing Shell within joint ventures and as LNG marketing manager. In 1996, Arthur was made a Director of Shell International Gas.. with regional responsibility for the performance and expansion of Shell’s gas business in the Asia Pacific region and functional responsibility for LNG, a position he held until late 1999, when he returned to Australia, as the inaugural President of Australia LNG Pty Ltd, located in Perth; ALNG was a marketing company representing all six NWS Venture partners."

"Under his leadership, ALNG concluded a 25-year deal to supply LNG from Australia to China’s first import facility constructed in Guangdong and a 7-year deal with Korea Gas Corporation."

"In 2003 and 2004, Arthur was seconded by Shell to Chevron Texaco Australia as Senior Advisor to the Gorgon Gas Project."

"Arthur has had over 40 years with Shell and of that, more than 20 years in the LNG business. He has served on the boards of Australia LNG Ship Operating Company (ALSOC), Brunei LNG, Brunei Shell Tankers and Shell International Gas and has considerable experience working with joint venture partners. He currently advises selected clients and conducts executive training courses on LNG."