GREY:NKRSF - Post by User
Post by
Bigwhiskeyon Mar 13, 2016 10:23am
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Post# 24652888
Indian Politics – We’ve Seen This Before
Indian Politics – We’ve Seen This Before“The British invented bureaucracy, and the Indian’s perfected it” We believe much of the negative news coming out of D6 is the result of a very public negotiation over gas prices − Reliance is downplaying the value of the asset for negotiating leverage − There is no incentive to ramp up production with $4.20 pricing if they believe $8- 10 pricing is around the corner − While technical challenges have contributed to the declines, the bigger issue has been a complete lack of development spending; oil & gas wells face natural declines so a lack of spending guarantees production declines History repeats itself: We saw a similar situation play out on D6 gas pricing once before − Prior to first gas production, Reliance and a formerly related entity had a very public fight over D6 gas pricing − It became political, got very ugly in the press, and negatively impacted Niko’s shares price − Reliance got their gas price in the end and Niko’s shares quickly rebounded