shortonoil wrote:[i]
Obviously, the big integrated oil companies are not going to be around much longer.
Alfred Tennyson wrote:We are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
shortonoil wrote:"Even more difficult to say how much of the replacement gaps is due to falling prices (reserves becoming uneconomical) and how much is due to simply being unable to find or buy enough new reserves. And even more difficult (but probably less important) is guessing how accurate these reserve statements actually are."
To answer that question it is first necessary to state that there is no shortage of liquid hydrocarbons on earth. According to a 2000 USGS study there could be as much as 4,200 Gb.
shortonoil wrote:We have extracted about 1,400 to date. The problem lies in determining how much of that resource can actually be used.
shortonoil wrote:
The economic perspective simply states that the reserve (liquid hydrocarbons that can be extracted) are a function of price, and production cost.
shortonoil wrote:An introduction to the report "Depletion: A determination for the world's petroleum reserves" can be found here:
http://www.thehillsgroup.org/petrohg10.pdf
shortonoil wrote:As a result of our study we have changed the focus of our consulting organization. The big integrated oil companies of the past are, as you say, going the way of the dodo bird. In the near future there will simply not be enough energy available to sustain them. The future of petroleum will become regional, as opposed to global. Petroleum products will come from small local sources serving a local market. The fuel that you use will come from a well fifty miles away, and processed in a small refinery down the street.
ROCKMAN wrote:Shooting seismic is always a crap shoot. First, not many apparent viable prospects are found. And if they are found you can still drill dry holes/marginal wells. Or another company bat you to the lease: many shoots are joint ventures by sometimes as many as 5 to 10 companies that can go after prospects on their own.
So it can, in theory, become publicly available, if the public pays through the nose for it?
shortonoil wrote: The problem is that the economy can not pay a price high enough for the industry to recover its cost.
shortonoil wrote:That study was supplanted by the 2012 update. Any reason you reference dated material?
Is this a joke? Resource is so huge it doesn't make any difference.
shortonoil wrote:Are you planning on living for a another 300 years? Reserves are what is important, and the industry can no longer replace the reserves that they are now extracting.
shortonoil wrote:They have not been able to do that for the last 30 years, and the situation gets more critical with each passing year.
shortonoil wrote: If you have just arrived on planet Earth your comment might be excused. Otherwise, it is as valuable as a book of matches is to a fish!
A single year or two does not counterbalance decades of profits.shortonoil wrote:In 2015 all the Majors saw either huge losses, or profits slashed to the bone.
Where did you get the idea that oil is scarce, the world is flooded with the stuff?
Scarcity is only significant if quality stays the same, and the quality of oil (the amount of economic activity it can power) is going down. Its price reflects that decline..
ROCKMAN wrote:"In 2015 all the Majors saw either huge losses, or profits slashed to the bone." No they didn't in terms of actual monies and not the "paper loses" of their oil remaining in the ground. This compares to the huger paper gain when oil increased from $30/bbl to $100+/bbl about 10 years ago. At the current price of $40/bbl the value of a bbl of Big Oil's reserves in the ground today is greater then it was a decade ago. ExxonMobil brought in $16.2 billion in revenue during 2015. And like every other operators none of us are going to produce a well if it isn't generating positive cash flow. That's true even for wells that will never recover 100% of the investment. In fact XOM has been so flush with cash it had been buying back large amounts of its own stock.
As mentioned before when a public company posts a "loss" the term doesn't mean what many folks think it does. I won't try to explain the tax accounting and SEC rules covering such calculations. While Big Oil saw a big decline in revenue thanks to lower oil prices as well as lower stock prices it didn't lose a single $ of actually money during 2015.
ROCKMAN wrote:As mentioned before when a public company posts a "loss" the term doesn't mean what many folks think it does. I won't try to explain the tax accounting and SEC rules covering such calculations. While Big Oil saw a big decline in revenue thanks to lower oil prices as well as lower stock prices it didn't lose a single $ of actually money during 2015.
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