Chinese didn't get much from the Russians this past week, actally nothing but good will-that they will be sold oil in the future and Ruskies are hoping at much higher prices. They're not gonna get Unocal. US is trying to protect "national interests". There are rumors Chinese are interested in PKZ. With GAZPROM taking over SIBNEFT, and Putin might have made Abramovich an offer he couldn't refuse (would you wanna be Khodorovsky-discraced mogul in jail or free rich man- a lot less rich but still rich and free man) my feeling is that oil has become a matter of national interests - that countries are securing their reserves and with them some stability in the chaotic years of oil +$100 and that free oil market is getting politicized now more than ever. Now maybe that explains all the KZ government was saying last week, maybe they have decided to put a stop to any sale of PKZ to any foreign entity in any way they legally can while depressing the price of the stock and making PKZ cut production. Now the question is if they can manage it all. I'm honestly hoping that Chinese run out of options and throw a ton and a half of money at KZ government and PKZ and we end up in Old Homested in NYC chewing on the fruits of global oil wars. Any thoughts on this?
You pretty much nailed the head. Oil is the new game. A lot of countries are mobilizing forces and resources to take over as much as they can. Russia forcing everyone to give ownership; Kazakhstan pressuring PKZ; Venezuela trying to change some rules; Bolivia trying to cut off gas (although this is due to local economic problems); some conspircay theories even claim that USA is in Iraq for the oil (2nd largest reserves in the world, 1.5mmb/d, etc). Oil companies all over the world are under attack.
IMHO there is now way PKZ would accept a $50 bid, so don't worry about that. I think that there is a 90% chance that the deal will go through, there is way to much news about oil shortages for China and India to pass this up. Bottom Line, I think that we WILL all meet for dinner. $100 is still a good possibility that is getting better with each price increase. The one thing that makes me want to sell, is all the news about oil shortages and price increases. When everybody is so sure about something it usually bursts, but I still would not be in a rush to sell in a GROWING world economy for under $75/share. If I was thinking really long term even $75 is not that great a deal.
Exactly-that's how our buyers are thinking too. For them $75 is still cheap, and that's not even considering secondary cost of unstable economies inflation and declining growth. The oil reserves are even valued at $40 per barrel which is completely unrealistic and makes it even more of a bargain to buy right now. Oil's not gonna be $40 per barrel any time soon, at least not until demand goes down drastically-does anyone see that happening any time soon? Selling now might be a good thing, it will save us a worry about KZ government's ability to make life even more difficult for PKZ, but holding out might be not such a bad thing either- not like it's gonna be any cheaper in the future. The key is to make the KZ obstructions more manageable. There are ways to do that. Spend some of that cash stash on some heavy political spanking.