The KNOC web site does not mention if they have an onshore rig or not. If not they will have to put out tendors. Given the current worldwide shortage I would say it will be some time getting one.
Risk will impact in a number of ways:
1. Many drilling companies will not want to work in that area. 2. If they do they will want a risk-premium - perhaps double the normal rate. 3. Security will be an issue and will be expensive. 4. During drilling the expats working there may possibly be a hostage target 5. The locals do not seem very happy - big short, medium and long term problems. They need to fix this immediately (it is simple and I have done it myself in Indonesia and PNG - hire locals, sponsor orphanages, and repair hospitals, schools and bridges). 6. If they find something, the risk increases. Somalia GDP is only $4-5billion (using PPP). Anything of value is a worthwhile target. So how attractive would a few $billion of oil or other minerals be?
While carrying out the regional program they would have been a moving target. Once they start drilling they become a stationary one.
I don't hold RRS nor am I down ramping to buy cheaper. To me, my postings today are a technical exercise that I do when I review companies.
G
I changed my sentiment to hold as I don't want to make any recommendations to buy or sell, just point out issues you need to consider.
RRS Price at posting:
0.0¢ Sentiment: Hold Disclosure: Not Held
