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For a fully certain income stream, investors are happy with a 3.5% return these days. So the "value" of the whole offshore production could conceivably be equal to 30 times net revenues from annual production...

The question is how much are the real capital investment worth? If a 1 milloin euro windmill produces 1 million euro revenue annually, the yield is not 3,5%, it is 100%. If the rentier income is 96,5%, the privatisation of this energy source is a very very bad idea.

by kjr63 on Fri May 21st, 2010 at 03:30:06 PM EST
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