Member Info for BouncyDeadCat

Morocco currently has a good reputation for foreign investment and it is viewed as future-looking and has been modernising both industrially and culturally during the last decade. Renault, BMW, Audi and Range Rover have all moved parts of their manufacturing process to Morocco.

There are risks investing in any country (even the UK), so build it into your risk model as you see fit.

https://www.morocconow.com/

I use if/when because if chariot aren't the ones to pump the gas, the company who buys the Anchois asset will.

One thing we know for certain - the gas is there & the world desperately needs it!

Somewhat of an over-reaction. If/when we get news on FID and the infrastructure build gets going then the SP will gravitate towards the value & quantity of gas they are able to pump. That's anywhere between 63p-£1.50 (depending on what size of pipe they opt to go for and what offtake sale price they agree to).

20-25p was priced optimistic uncertainty.
14p-18p is priced pessimistic uncertainty.
63p-£1.50 is the price of reality if/when they start pumping gas.

There is a massive amount of pessimistic uncertainty across the entire market right now. That's why Char is priced as it is today. Sentiment. The price of good companies/projects go down when there is market turmoil

If Anchois is pumping gas in 2 years - this will be the buying opportunity of your lifetime.

Unfortunately, the medium term economics currently effecting the world is one of war, or preparing for it, or defending against it.

The world is also in desperate need of clean & secure energy solutions and nuclear is by far the best long-term solution in which to provide soverign nations with reliable energy.

Both are actually positive for a company such as RR.

An increase in defence revenues will likely start to show up in the next set of numbers. Nuclear is further away but still moving forward and quickening in pace.

"The total CAPEX for Phase 1 is estimated to be in the region of USD 350 million with 15% of the total spent already realized since two out of three wells have already been drilled."

It's been tested a few times, but the SP seems to have formed a consolidatory local bottom @ around 18.5-19p acting as solid support.
On the wiff of any good news, I suspect we move higher from here.

B4,

It's not the fact that the project is located in Morocco that's keeping the price low and/or preventing II's from investing (loads of institutions invest in Moroccan projects every year). It's more likely to be uncertainty over funding and lack of definitive start date for when the project is going to start. You probably tell yourself it's geopolitical because that's a bias you have.

Maybe research Morocco a bit more. It's a modernising country, a bit like Singapore in the 80's and it has a young & dynamic population with stable leadership.

https://www.youtube.com/watch?v=AWyKXXMx010
https://www.youtube.com/watch?v=IlGKCsFTnYk

I agree, supplying the Moroccan domestic market will be the immediate priority.
Supplying Europe with the remaining 30mmcf gas will be secondary. Albeit more profitable to Chariot.

I'm afraid you are b4.

Just work through the logic...

Under the 'Morocco Now' initiative, Morocco's aim is to be the most attractive destination in North Africa for investment - both foreign and domestic.

Under your scenario; Morocco breaks contractual law in order to nationalise 1Tcf of gas. Well say goodbye to all future foreign investment Morocco - because you've just proved to be an uninvestable pariah state.

So now the captured gas asset needs the skill and know-how to develop and extract it - Morocco doesn't have this skill and know-how in-country. ONHYM is an administrative government department, so they would need foreign O&G companies to come in and invest. Do you think any foreign O&G company in its right mind would sign a new contract for the same asset with a country that just breached their contract with another company over the same asset? No, nor do I.

Breaching contract for 1Tcf of gas would also have a huge knock-on effect for all other foreign investments in the country. Once you prove to be a contract-breaking nation - you're doomed. Look at what happened to foreign investment in Zimababwe under Robert Mugabe - it all went away as soon as he started withdrawing property rights.

I'm not saying there aren't any risks, there clearly are (and why a return is the hopeful outcome of taking such risk), but let's at least be realistic over what those risks are.

https://www.morocconow.com/

Lots of automated accumulative buys going through today in 25,000 chunks.

b4piperinvestor,

Welcome, but I think you're barking up the wrong tree and talking from a position of fear/worry, not logic.

You don't sign off on a legally-binding contract giving companies a 10 year tax-free holiday for producing gas in your country (protected under law) if your intention is to nationalise. And nationalise with what? The ONHYM is just an administrative government department that doesn't have a clue on how to drill a well or lay deepsea pipes, nor do they have the staff to even contemplate doing so in the future.

Lots of worried Char PI's thinking about outlandish what-if / worse-case scenarios these last couple of weeks.
Probably a good buy signal.

Olaf Scholz ~
“I made the case that we should really tackle such a project,” he mentioned, including that there would even be “other connections between north Africa and Europe that will help us to diversify our energy supply”.

For those without a subscription to the FT, here's another news source;

https://www.newsncr.com/business/olaf-scholz-backs-proposal-for-new-european-gas-pipeline/

Europe rushes to Africa for gas alternatives as dependence on Russian gas dims.

https://northafricapost.com/59718-europe-rushes-to-africa-for-gas-alternatives-as-dependence-on-russian-gas-dims.html

EU liaises with Morocco to study investment possibilities in Morocco-Nigeria gas pipeline project.

https://northafricapost.com/59703-eu-liaises-with-morocco-to-study-investment-possibilities-in-morocco-nigeria-gas-pipeline-project.html

The two gas pipelines from Spain into France are now working at full capacity whereas in the past they had never been at more than 20% to 30%.

LNG terminals are filling this gap but more pipelines are needed.

https://www.bloomberg.com/news/articles/2022-07-28/spain-says-it-can-pipe-42-more-gas-to-france-within-two-months

Speaking in Belfast on Wednesday, UK Chancellor added:

"What I want to do tomorrow is understand better how THEY'RE COMMITTED TO THAT INVESTMENT IN GAS, because whatever happens we need energy security and we've got a strong strategy that Kwasi and I will continue to push hard."

https://www.lse.co.uk/news/BP./uk-ministers-to-hold-talks-with-energy-bosses-over-winter-price-hikes-u07ko1m1j8kyo8y.html

@tiger100 gets it.

No I don't agree. Setting up the frequency is an output setting on the generator, it's not a power production issue.

baronbog,
I can only assume you got the wrong end of the stick if they were talking about distribution systems and not power generation systems which is what SMRs are.
You can literally generate electricity from Pig $hit using a bio-digestor that creates methane that you burn in order to generate heat which can then become electricity. So even pig $hit is compatible with the US electrical system.

It's okay to post some of the risk, but let's at least be honest about what the risks are. The US having an incompatible electricity system or the world suddenly having an urge to buy cheap Chinese copies aren't risks for RR.