c/b shale, page-2

Nice thought,

But same reason can be said for, why QGC didn't go for BPT's PEL218 in the first place instead they went for DLS's ATP940.

QGC going for DLS partnership could be the fact more of control and cost (on who's terms) rather than BPT's PEL218.

Cause you would imagine that BPT & BG Group could have talk about a similar deal. Because BPT's PEL218 is more de-risked than DLS's ATP904 with 2 years of work done on it already, negotiations on PEL218 and ATP940 would have been on different terms. BG Group would have disagreed on price to farm-in, given BPT's high confidence over PEL218's potential, BPT would have been reluctant to sell anything more than 40% (as I think they want to hold at least 50% with themselves being the operator).

Whereas for ATP940 would more beneficial for QGC having majority stake of 60%, DLS retaining operatership at the exploration stage (meaning low risk for QGC, if the project later proves unsuccessful, they can pull out, before spending the rest of the $130m commitment). But if proven successful, QGC can pay out DLS to gain operatership for the production stages.

QGC moving onto shale gas now reflects that its CSG operations may not have enough gas to meet their contractual agreements. Remember they have a $80b "binding" and "unconditional" deal with CNOOC and they have a $60b "non-binding" deal with Tokyo Gas. Let alone one can imagine whether QGC can sell surplus gas to third parties for their clients at mate's rate.

See for BPT's PEL218, at the time of the QGC-DLS deal, which had not booked the resource booking yet, but it was publicly confident with the results of PEL218. So interested parties would have to play on BPT's terms, if they wanted a stake in PEL218. Price and control would have been the issue, but with no resource booking yet, it was hard for QGC to justify why they can get minority stake that cost more money.

On these terms, BPT's financial firepower was also an advantage, BPT don't really need any big dollar partners to fund the projects, cos its got the $$$ to go it alone. So the only way for BPT to give up some stake is for big $$$.

So ICN can be a customer of QGCLNG, but obviously on the same terms and prices with CNOOC, Tokyo Gas, etc.

Also I don't know what you mean here "Unfortunately we only have 40% - but we could go down to 15% with a big cash injection from BG farmin - and get free carried for a hell of a lot longer."