"The final result of the No. 6 oil field has been judged by His Excellency the President......" As soon as little Aliyev said this, there was a burst of nervousness and whispers.

A decision made by the president means that the outcome of the bid is not purely based on the percentage and amount of money, in other words, any company can succeed or lose.

People familiar with the situation in Azerbaijan immediately looked to Dahua Industrial's side. Whether it is BP, Exxon or PetroChina, they all know in their hearts that Dahua Industrial's efforts in Azerbaijan, especially in public relations, are incomparable to other companies.

However, while the relationship is important, cash and earnings are decisive, Aliyev will not shake the foundation of his rule to repay the favor of Sioux City, so the representatives of the companies have not completely given up hope.

Time did not give them a chance to think about it, and Aliyev Jr. paused for a few seconds before continuing: "The company that won the bid in the end was Dahua Industrial, and the basic share increased by 10.1% ......"

"Ahh

Ryutaro Watanabe of Japan's Inpex stood up, pushed the chair to the back, and shouted: "The increase in the basic share of our bid is 14.8%, and how to get the bid is Dahua Industrial." ”

bp's Ducatt also stood up, and they offered a 15.4% increase in the base share, which was the best mark for the whole market, but it did not win the bid. However, the performance of the British and Japanese in the meeting hall has always been polarized, and he is not in a hurry to shout out, but waits and sees.

Interrupted from speaking, Aliyev Jr. simply put down the documents in his hand and said: "The reason why Dahua Industrial won the bid is the signing fee. ”

"The signing fee, the signing fee is secondary!" Ryutaro Watanabe, like those Japanese companies who came from big conglomerates, knows how to grovel. I also know how to fight fiercely. If he could get the oil field, he didn't mind kneeling down and begging, but now that the oil field was about to be handed over to Dahua Industrial, he could only take a posture of opposition and hope that things would change.

This trick works well in many places, especially in Europe, where Japanese consortia are often given things they could not have gained, or that they are about to lose.

But. In the case of little Aliyev, who had been in turmoil for a long time, the Japanese struggle had no effect. Little Aliyev's big pie face seemed to be baked through, hard as iron, and said indifferently: "The added value of Dahua Industrial's signing fee is 300 million US dollars. After discussion between His Excellency the President and the Cabinet, it was decided to grant them a three-year concession for exploration. Application for a 35-year concession. ”

"$300 million!" This figure immediately shocked the recalcitrant Japanese elites and the hundreds of people in the conference hall.

"$300 million. Little Aliyev repeated. He also knew that the decision was controversial, so he gave the representatives of the companies a buffer time.

Dahua Industrial won the bid, on the one hand, Aliyev's promise, and on the other hand, it was also this huge signing fee. It is under the action of two parts that Aliyev nods at 60.1% of the total share.

Ducatt quickly did the math. The difference in the sharing agreement between Dahua and BP is nearly 5%, which is 500,000 barrels of oil compared to an oil field that produces 10 million barrels of crude oil per year. At current profits, 500,000 barrels is equivalent to about $5 million.

Other words. For an oil field with an annual output of 10 million barrels, it would take 60 years to make up for the difference in the contract, in other words, if the production of No. 6 oil block is only 10 million barrels. The total signing fee is 320 million US dollars, and Dahua Industrial will lose a lot.

Take the normal rate of return of oil companies. At the latest, five to 10 years, the costs should be recovered, including the contract and mining costs. The former is a fixed $320 million, while the latter can be replaced by an activation index, which is $4,500 per barrel per day in Azerbaijan.

Using a simple system of equations, it is possible to calculate the minimum estimate of Dahua Industrial's No. 6 oil block, which requires at least 6 million barrels of crude oil per year to recover the initial investment within 10 years - recovering the investment means not making a penny, and having to put in a huge amount of money.

Even if the price of oil rises, it is difficult for its profits to catch up with the interest loss caused by the upfront investment, and at the same time, the loss of opportunity costs cannot be underestimated.

The annual output of 6 million barrels of crude oil is the standard of the Setan oilfield.

No matter how you look at it, a large-scale oil field of the size of the Setan Oilfield cannot just pop up casually.

In fact, without adequate geological analysis, the previous companies have already given extremely high marks to the oil fields near Baku. However, it is still full of suspense whether there can be 2 large oil fields in 11 oil blocks.

Of course, if the production of No. 6 oil block is amazing, it will be profitable to reduce the share ratio and increase the signing fee.

If the annual production of 12 million barrels of crude oil is stabilized, although it will cost an additional 80 million yuan in development costs, the annual profit will also increase by 48 million, and the cost can be recovered in six to eight years after counting the early development time, which is almost the most acceptable rate of return for oil companies.

For further comparison, if the annual production of 24 million barrels of crude oil is stabilized, the total annual profit will soar to $200 million, which is equivalent to the recovery of the cost in 4 to 6 years, despite the additional development cost of 250 million US dollars.

The faster the cost is recovered, the less interest and opportunity costs are not accounted for, and the more earnings will be in the years to come.

Every oil company understands this, but with the exception of Dahua Industrial, very few companies are so aggressive.

With an annual output of 24 million barrels of crude oil, this means a stable production of 7 to 80,000 barrels per day. Such data is more common in Kuwait or Saudi Arabia, where oil production is high. However, this does not mean that if you get a concession for an oil field, you can see such a highly productive oil field.

For other oil companies, they would rather divide a little lower than take such a risk, and risk sharing is the way for large enterprises to stand, and even the foundation of modern corporate society.

Professional managers such as Ducat, not only are they not qualified, but should not have made risky decisions like Sioux City. The companies behind them have more than double-digit shareholders, and there may be how many investors are behind the shareholders, if they are listed companies. There will be more investors. And these gentlemen, who are not necessarily in the oil industry, will never allow their money to be gambled away by a certain manager, even if there is a good chance of winning.

And a wholly-owned company like Dahua Industrial is a small and medium-sized oil company. They may have the courage to gamble, but they don't necessarily have the capital to gamble.

"The signing fee of $300 million is about to set a record. Emma, the beautiful Total, said in amazement, breaking the silence in a small area.

Ducatt shook his head in disappointment. He couldn't afford to pay such a high price, but he regretted that BP lost the field. If you can win this oil field with a 65% share. Even if it doesn't make as much as Dahua Industrial, it will be a lot of profits, and it will be his future promotion.

"$300 million. ”

"Total amount of 320 million contract money"

"The total investment is four or five billion ......"

Arias in various languages sounded in all corners of the chamber. Even oil companies, which spend a lot of money, cannot remain indifferent to hundreds of millions of dollars.

The cost of development for a country by a multinational corporation. Often, it doesn't always reach $100 million. The world's top 500 enterprises may only have a profit of a few hundred million dollars a year. In a recessionary year, a well-respected CEO who breaks two thick legs may only be able to secure hundreds of millions of dollars in financing......

"Absolutely...... Definitely going to lose money. Shigeru Nishioka started with the pronunciation of "" in Japanese, gritting his teeth.

The representative of Statoil said faintly: "Dahua Industrial may have done secret exploration." ”

For a moment, more than half of the delegates nodded silently.

If no secret exploration is done. They couldn't think of a reason to gamble on Sioux City.

This is not as simple as increasing the sharing agreement by 0.2 percentage points, but completely using the signing fee to fight for the share.

Any company representative understands what this means. This must be a decision made by Sioux City because it is extremely optimistic about oil field production.

Shigeru Nishioka touched his head, and whispered in Japanese a little frustrated: "Since he decided to use a high signing fee." Why submit bids so late?"

"The amount of the high signing fee is naturally compatible with the high share. Ryutaro Watanabe, who also used Japanese, whispered, "How much we offer will obviously affect the amount of the signing fee." ”

Shigeru Nishioka is thorough. If the highest share bid for the No. 6 oil block is only 60%, Dahua Industrial can get the oil field without even giving much signing money......

"Alas......" Ryutaro Watanabe sighed again. He said softly: "If it weren't for the above, we could have proposed a share ratio of more than 65...... Perhaps, the signing fee can be increased to 80 million, so that there is still a chance to win the oil field, at least let the Chinese bleed more. ”

"Above?" Nishioka Shigeru was a little confused.

"The main bank has some doubts about the Caspian oil fields and asks us to control the price when bidding. Ryutaro Watanabe explained in a whisper. The impact of banks on business is clear, with some mega-oil companies able to transcend the presence of banks, while the average big oil company can only seek to coexist. Japanese, South Korean, and Southeast Asian companies tend to operate as conglomerates, with banks or oil companies ultimately leading the way, depending on the situation, but most of the time the companies are influenced by banks.

It is not surprising that the main bank is the main investment bank of a certain project of an enterprise, and it has at least the right to speak equivalent to the management of the enterprise, and the requirements such as risk control and price control are often required by institutional investors such as banks. Like the mega oil companies, banks would rather make less money than get into a gamble, and in the end, none of these companies will really make less money.

Shigeru Nishioka was silent. Whether it is secret exploration or the courage of bidding, they are inferior to Dahua Industrial, and there is nothing to say about losing the No. 6 oil block.

Just hope it's not a big oil field.

Oilfields with a daily output of more than 80,000 barrels were still rare in the 90s.

"Since there is no doubt, then I announce that Dahua Industrial has won the bid for the 35-year ......concession of the No. 6 oil field," Aliyev Jr. said slightly.

There are always a few representatives of companies who are eager to jump out and continue to oppose it. However, in the end, no one jumped out.

This is not an easy decision, and considering that there are still 5 oil fields hanging in the balance, none of the major oil companies will put themselves in the position of victims.

Su Cheng suppressed the excitement in his whole body, clenched his fists tightly, and his thighs trembled slightly.

He was so excited.

This is the Azijiu Oilfield, a super oilfield that continues to increase production and takes more than ten years to reach the stabilizer.

Its production is more than a Setan oil field.

When this huge super oil field is fully operational, its stable daily production will exceed 1.3 million barrels, which is equivalent to 20 Setan oil fields!

And its annual output will reach an astonishing 420 million barrels, 60 million tons, properly exceeding the peak output of Daqing Oilfield by 20%!

In later generations, in order to reduce the maintenance time of the Azijiu oilfield, the nine major companies exhausted the means and invested more than 300 million US dollars in technical funds for this purpose.

At present, the risk of exchanging $200 million in excess signing money for a 5% or so sharing agreement is huge. But Sioux City couldn't be clearer about the potential of the Azijiu oil field.

The 5% share falls on the stable production capacity of 420 million barrels, which means that 21 million barrels of crude oil is equivalent to three and a half more Setan oil fields.

It doesn't get much cheaper than that.

What's more, this is a 35-year long-term contract.

That's the beauty of the "century" contract.

Sioux City could make a profit from $5 a barrel of crude oil all the way up to $80, $90, $140...... In the 20 years that can be met, 30 years later, the profits brought by the Azijiu oil field will be extremely rich.

At that time, if it needs to be realized, whether there is a 10-year concession or a 5-year concession left, the shares of Aqijiu Oilfield will enable Dahua Industrial to obtain a profit of 100 billion yuan.

When the time comes, if you think back to $300 million in 1993, you will only see it as a fraction of a fraction.

If it weren't for Aliyev's cunning fox, Sioux City would have preferred to spend another $600 million in exchange for an additional 5% cut.

However, this approach is too easy to arouse Aliyev's vigilance. Moreover, if the share is less than 60%, I am afraid that it will cause more disputes on another day.

Contrary to the excitement of Sioux City, the people of Dahua were skeptical, unlike the spontaneous cheers of other companies when they got the oil fields, and the block in which Dahua Company sat was quiet.

$320 million in cash in one go, plus the ensuing development costs...... It's a lot of pressure on anyone, and they can't jump.

……