21 October 2010 19:48 [Source: ICIS news]
“A big oil company with a big enough pocket is the only one to do a deal like this” apart from BHP, said Chris Damas, principal at equity research BCMI Research in a briefing on Canadian business television.
Oil exploration and production is not all that different from potash mining, he said. In fact, there were a lot of direct links, given that sulphur from oil and gas production is used to make key phosphate fertilizers.
Also, the potash business “comes with a little cartel, kind of like OPEC”, but with fewer members and better compliance, and the potash business is a lot less risky than deep-sea exploration, Damas said.
“You can buy the whole company, it’s in play, and [oil] is just as essential for human life as energy,” he said.
Some 20 or 30 years down the road, an investment in potash would turn out to be a very profitable for an oil major, he said.
Damas, joining other analysts and commentators, also said that ?xml:namespace>
Commentators said that Prime Minister Stephen Harper, who prided himself on making “pro-business” decisions, would be worried about the impact of a negative decision on foreign investors.
In a related development, news media reports quoted BHP Billiton chairman Jacques Nasser as telling investors earlier on Thursday that his company would not be caught in a bidding war for PotashCorp – an indication that BHP may not raise its $130/share bid from August.
($1 = €0.72)
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