Best Alternative to Negotiated Agreement ("BATNA")

a) Best Alternative to a Negotiated Agreement

b) It allows you to negotiate from a position of strength.

d) Ensuring you get the best possible price

a) Hiring a different drilling contractor

c) It should be a secret to the other party.

Here's a possible approach to the exercise:

1. Potential BATNAs:

• Seek a partnership with another company: Explore other companies interested in the region. This could offer a better profit split or access to additional resources.
• Develop a smaller, independent project: Focus on a smaller exploration area nearby, where your company's expertise could be a stronger advantage.
• Secure funding independently: Explore alternative financing options like venture capital or private equity.
• Negotiate with the government: If the area is new or undeveloped, you may be able to secure favorable terms through direct negotiation with the government.

2. Evaluating BATNAs:

• Partnership with another company: Strength depends on the partner and potential deal terms. Feasibility depends on the company's availability and willingness to collaborate.
• Smaller independent project: Strength depends on available funding, expertise, and the potential profitability of the smaller area. Feasibility depends on your company's resources and time constraints.
• Secure funding independently: Strength depends on the market conditions and your company's attractiveness to investors. Feasibility depends on your business plan and the available funding options.
• Government negotiations: Strength depends on the government's regulations and your company's ability to demonstrate value. Feasibility depends on the political environment and the time required for negotiations.

3. Best BATNA:

The "best" BATNA will depend on your company's specific circumstances. Consider the strengths, weaknesses, and feasibility of each option.

4. Using your BATNA:

Once you've identified your strongest BATNA, use it as a leverage point in the negotiation. This could involve:

• Threatening to walk away: If the other company doesn't offer a more favorable split, you could threaten to pursue your BATNA.
• Using your BATNA to justify your demands: Explain how your chosen BATNA allows you to secure a similar outcome or even a better one.
• Being willing to walk away: Your chosen BATNA provides you with the confidence to leave the negotiation if necessary.

Remember: Your BATNA is not a guarantee of success, but it provides a valuable tool for achieving a better outcome in your negotiations.