Here’s an exhaustive view of the energy projects that are likely to change the world according to Goldman Sachs.
In fact, the bank says there are 280 such projects currently under development or in the process of exploration. And here’s how they’re positioned
(Click to enlarge):
Now, it’s worth noting that Goldman thinks smaller companies invested in these assets could be prime acquisition targets in the future.
And, having screened the companies according to size, viability, materiality and growth, it identifies the following possible targets:
On this basis, Tullow, Soco, Cairn India, OPTI (not covered), Hess, Heritage, Nexen and St Mary Land & Exploration (not covered) screen attractively. Of the companies whose EVs are over US$25 bn, OGX and BG also screen attractively.
Markets Live addicts take note: there’s no mention of Gulf Keystone Petroleum or its Shaikan block.
In fact this is what they say in respect to Kurdistan generally (our emphasis):
We add eight new projects to the database with this publication to account for the new development contracts signed with IOCs in Iraq during the year, and to capture the start-up of two fields in Kurdistan.
The Iraqi fields increase the resource captured by the database by 30 bnbls although we believe that with perfect execution this figure could increase. We believe it is unlikely that the contractors will hit the production targets implied in their contracts. Although the scale of the resource is enormous, and could allow a ramp-up to the 9+ mnb/d level of incremental production implied by the production targets of the contracts, we believe that a number of problems exist that will likely limit ultimate production including, security, water supply, political risks and the structure of the contract which we believe encourages firms to bid to high production targets without substantial economic penalty in the event of failure.
We note, however, that the scale of the proposals is significant. A ramp-up of the proportions targeted, even assuming some shortfalls in delivery, will require thousands of wells to be drilled together with significant investment in new gathering, processing and power generation infrastructure.
And ultimately:
Economics suggest that capital is better employed elsewhere
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