Oil prices are not likely to come up anytime soon

[mich]

Originally Posted by avb3

Oil is a commodity, and the Saudi's have us by the short and curlies.

We don't have many choices. Obama killed Keystone, and Quebec wants to kill the eastern pipeline. With Trudeau in office, they probably will get their way.

Transition as fast as possible to other energy sources will kill the Saudi's quicker than competing directly. Yes, high school dropouts won't be making $100K a year here, but them needing to get a trade/degree is not a bad thing and helps our society in the long run. Lots of jobs in the alternative energy fields, ones that pay well, albeit perhaps not to the excesses that the patch did. An educated workforce is always better than otherwise... look at Germany if you want to see results. Some of the finest tradesmen and craftsmen in the world, along with some of the best engineers.

Only China and the US export more than Germany, and Germany has only a fraction of the population of either.

http://www.statista.com/statistics/2...ies-worldwide/

We also need to see what value added products we can produce right here in Alberta, including those from oil/gas/bitumen.

You like our clueless leaders have no vision....

Why would we transition? Close the pipelines, tax any raw product leaving the province. We can use it/develop it here. We can build a few dozen coal and oil fired plants at our south and east borders and export electricity to who ever wants it. Build a few dozen more chemical plants and do the same export thing. A dozen more refinery's as well and tank farms at the new rail heads at the border. Green energy is a myth, we have a thousand years of resources here and we don't need to be the punching bag to the Goreicles and other liars of the world.

[mich]

Originally Posted by ctd

If the Middle East has no buyers of their oil how can they make money.

As long as the Americans are funding them under the table to keep the prices down so they can try to control Putin they will be OK

[winged1]

Originally Posted by mich

You like our clueless leaders have no vision....

Why would we transition? Close the pipelines, tax any raw product leaving the province. We can use it/develop it here. We can build a few dozen coal and oil fired plants at our south and east borders and export electricity to who ever wants it. Build a few dozen more chemical plants and do the same export thing. A dozen more refinery's as well and tank farms at the new rail heads at the border. Green energy is a myth, we have a thousand years of resources here and we don't need to be the punching bag to the Goreicles and other liars of the world.

Originally Posted by mich

As long as the Americans are funding them under the table to keep the prices down so they can try to control Putin they will be OK

You make no sense.

[denied access]

Originally Posted by mich View Post
You like our clueless leaders have no vision....

Why would we transition? Close the pipelines, tax any raw product leaving the province. We can use it/develop it here. We can build a few dozen coal and oil fired plants at our south and east borders and export electricity to who ever wants it. Build a few dozen more chemical plants and do the same export thing. A dozen more refinery's as well and tank farms at the new rail heads at the border. Green energy is a myth, we have a thousand years of resources here and we don't need to be the punching bag to the Goreicles and other liars of the world.

Quote:
Originally Posted by mich View Post
As long as the Americans are funding them under the table to keep the prices down so they can try to control Putin they will be OK

Originally Posted by winged1

You make no sense.

I think he makes perfect sense. Cali is hungry for electricity. There used to be a scam going of BC buying "dirty" power from AB and selling "clean" power to Cali. If we could get past this carbon non sense for a while I think clean coal tech and Nat gas generation could be hugely profitable for AB. As well I could never understand why long term shipping of unrefined products was allowed. From experience I can tell you mid stream / refining / generation jobs are the best Oil and gas there are. I worked Drilling, Cementing, Coil and then smartened up and worked Mid Stream Sour and now work in the control room for Power Gen / Distribution and I can tell you "Everything is coming up Millhouse". Chem Plants and other manufacturing makes sense if you have refining because it gives you close access to feedstock and energy. You just need the Gen Pop to back off the anti industry climate change new religion idea for a bit to get industry up and running. Good stable non fluctuating jobs. Lots of em.

As for the US Saudi thing the US is a net importer and while low oil prices do slow domestic oil activity I feel low prices are a net gain for them. As well it will cripple Russia and Argentina as well as our economy. All wins for them. Especially in the not so distant future when they start looking north for Power and Water and we are desperate to sell something to someone.



AB needs to boot the NDP and maybe boot the rest of Canada. Get rid of the new religion of manmade global warming and become a toxic cesspool like New Jersey or the Sydney tar Ponds or Sudbury. Then we will all be rolling in the dough.

[elkonthemind]

Suncor is not producing at 27$ a barrel. just so most people know oilsands is one of the cheapest producing oils we have last report I read and all have been around there is 17.50 a barrel for big players (Suncor, Connoco, Cenovus all run arount this). with WCS selling at around 13$ they are definitely taking a huge hit till we get some pipelines built.

[I_forget]

Originally Posted by elkonthemind

Suncor is not producing at 27$ a barrel. just so most people know oilsands is one of the cheapest producing oils we have last report I read and all have been around there is 17.50 a barrel for big players (Suncor, Connoco, Cenovus all run arount this).

Suncors oil sands operating costs were $28 / barrel in the 4 Th quarter of last year.
http://boereport.com/2016/02/03/sunc...-2015-results/

[elkonthemind]

So u really think they will take a 13 dollar a barrel loss lol. sorry but that report is wrong my friend. that would mean by your numbers here that they are losing 28 million a day not going to happen they would shut down immediately.

[I_forget]

Originally Posted by elkonthemind

So u really think they will take a 13 dollar a barrel loss lol. sorry but that report is wrong my friend. that would mean by your numbers here that they are losing 28 million a day not going to happen they would shut down immediately.

That's not how it works. Did you know suncor owns oil refineries? Those numbers are from suncors news release.

[The Elkster]

Originally Posted by elkonthemind

So u really think they will take a 13 dollar a barrel loss lol. sorry but that report is wrong my friend. that would mean by your numbers here that they are losing 28 million a day not going to happen they would shut down immediately.

No they would not shut down because there is a huge cost to shut down and restart. Unless they thought things were going to be in the dumper for a decade they wouldn't go that route. Furthermore all this talk of operating costs is extremely misleading. These companies have debt from the original build and ongoing maintenance and upgrade spending. They don't generate money and make the debt payments they are in trouble. Most have to keep things running in order to generate cashflow. Most do not have huge cash reserves because free cash in the good times was all doled out to investors in the form of dividends.

Refining aside most if not all OS operators are likely losing money when ALL costs are factored in but the alternative of shutting things in would cost them far more. So they are stuck. Much like most of the debt laden O&G companies. In good times debt seems like a great growth tool. In bad times its a boat anchor.

[79ford]

Originally Posted by I_forget

No way fort hills will need $80+ oil. Operating costs will be less than $50 per barrel. Suncors oil sands operating costs are $27 right now and getting cheaper. What guys like 79ford forget is that the big companies like suncor and imperial have refineries. Low crude input costs mean higher margins on the refining side.

Operating costs are misleading, to say it costs 28$ to produce a barrel of oil isnt very accurate. Operating cost is the extraction process, that does not include spending 13.5 billion on a project like fort hills, that cost also does not include shipping costs and diluent costs, nor does it include capex to maintain equipment and production.

Suncor as a corporation needs about 73$ per barrel to report a profit from the numbers i have looked at over the past 7 years of following the companies financials.

Their upstream business loses money at 41$ per barrel which is what they averaged last quarter on oil sales... that is 41$ American, so about 55$ canadian. Suncor also lost money despite making 575 million from downstream refining in q4.

Their 575 million refining profit was more than offset by losses in the producing side while getting 55$ canadian on average for every barrel they produce. They need atleast 70$ to not lose money even though they make money refining...... which probably means if one stripped out refining the company needs 80-90$ to make money on projects that are already paid for.


Meg energy claims operating costs of 11$ per barrel.... bitumin has been 14-25$ per barrel, how do they still lose 300 million $$ in 3 months?lol

Operating costs assume everthing else costs nothing. Otherwise these guys would report profits vs eye popping losses.

The figures for break even and some ROI are brutal for most of the oilsands projects recently constructed.

[ForwardBias]

Originally Posted by avb3

Oil is a commodity, and the Saudi's have us by the short and curlies.

We don't have many choices. Obama killed Keystone, and Quebec wants to kill the eastern pipeline. With Trudeau in office, they probably will get their way.

Transition as fast as possible to other energy sources will kill the Saudi's quicker than competing directly. Yes, high school dropouts won't be making $100K a year here, but them needing to get a trade/degree is not a bad thing and helps our society in the long run. Lots of jobs in the alternative energy fields, ones that pay well, albeit perhaps not to the excesses that the patch did. An educated workforce is always better than otherwise... look at Germany if you want to see results. Some of the finest tradesmen and craftsmen in the world, along with some of the best engineers.

Only China and the US export more than Germany, and Germany has only a fraction of the population of either.

http://www.statista.com/statistics/2...ies-worldwide/

We also need to see what value added products we can produce right here in Alberta, including those from oil/gas/bitumen.

[I_forget]

Originally Posted by 79ford

Operating costs are misleading, to say it costs 28$ to produce a barrel of oil isnt very accurate. Operating cost is the extraction process, that does not include spending 13.5 billion on a project like fort hills, that cost also does not include shipping costs and diluent costs, nor does it include capex to maintain equipment and production.

Suncor as a corporation needs about 73$ per barrel to report a profit from the numbers i have looked at over the past 7 years of following the companies financials.

Their upstream business loses money at 41$ per barrel which is what they averaged last quarter on oil sales... that is 41$ American, so about 55$ canadian. Suncor also lost money despite making 575 million from downstream refining in q4.

Their 575 million refining profit was more than offset by losses in the producing side while getting 55$ canadian on average for every barrel they produce. They need atleast 70$ to not lose money even though they make money refining...... which probably means if one stripped out refining the company needs 80-90$ to make money on projects that are already paid for.


Meg energy claims operating costs of 11$ per barrel.... bitumin has been 14-25$ per barrel, how do they still lose 300 million $$ in 3 months?lol

Operating costs assume everthing else costs nothing. Otherwise these guys would report profits vs eye popping losses.

The figures for break even and some ROI are brutal for most of the oilsands projects recently constructed.

I'm not Mislead by suncor claiming operating costs are $28. Yes that's the lowest possible number they can claim to make oil at. But of course it's not the whole picture. Atleast it's not syncrudes $50+ per barrel. Where did you get the $85-$125 number for Fort hills.

[The Elkster]

Originally Posted by I_forget

I'm not Mislead by suncor claiming operating costs are $28. Yes that's the lowest possible number they can claim to make oil at. But of course it's not the whole picture. Atleast it's not syncrudes $50+ per barrel. Where did you get the $85-$125 number for Fort hills.

Probably start by considering the mortgage payment on 13.5 billion dollars LOL

[avb3]

Originally Posted by The Elkster

Probably start by considering the mortgage payment on 13.5 billion dollars LOL

Wonder what the fallout will be on banks that have lent assuming much higher prices if the low price reality stays put for 3-4 years (or longer).

It can't be good, and should interest rates creep higher, it's even worse.

[The Elkster]

Originally Posted by avb3

Wonder what the fallout will be on banks that have lent assuming much higher prices if the low price reality stays put for 3-4 years (or longer).

It can't be good, and should interest rates creep higher, it's even worse.

Banks would take a hit but its not a huge part of most portfolio's as they've announced. A house bust would pose a much bigger risk for them and is a far more likely scenario than oil staying down for more than a couple years.

[Jadham]

Originally Posted by The Elkster

Banks would take a hit but its not a huge part of most portfolio's as they've announced. A house bust would pose a much bigger risk for them and is a far more likely scenario than oil staying down for more than a couple years.

Agreed. RBC for example, stated today that loans to oil & gas only count for 1.6% of their loan portfolio.

http://www.theglobeandmail.com/repor...service=mobile

The Canadian economy as a whole is not in recession and projected to grow by 1-2% this year, so the big banks don't appear too concerned. Their share prices are getting attractive though, as they get dragged down.

[79ford]

http://www.albertaconstructionmagazi...-oilsands-mine

QUOTE=I_forget;3152746]I'm not Mislead by suncor claiming operating costs are $28. Yes that's the lowest possible number they can claim to make oil at. But of course it's not the whole picture. Atleast it's not syncrudes $50+ per barrel. Where did you get the $85-$125 number for Fort hills.[/QUOTE]


There was a plethora of articles in the news about high break even costs for new mines, projects were getting cancelled in fort mcmurray as early as 2013 on costs for new projects-both sagd and mines. Here is one of many articles

[I_forget]

Originally Posted by 79ford

http://www.albertaconstructionmagazi...-oilsands-mine

QUOTE=I_forget;3152746]I'm not Mislead by suncor claiming operating costs are $28. Yes that's the lowest possible number they can claim to make oil at. But of course it's not the whole picture. Atleast it's not syncrudes $50+ per barrel. Where did you get the $85-$125 number for Fort hills.

There was a plethora of articles in the news about high break even costs for new mines, projects were getting cancelled in fort mcmurray as early as 2013 on costs for new projects-both sagd and mines. Here is one of many articles[/QUOTE]

That $95 per barrel suncor provided includes 13% return after tax. And I don't know how many years it would take to have the construction paid off. But I'm sure that's included in their estimate. I still don't buy that it'll cost that much per barrel. Both Fort hills and suncors base pant are open mines Why it would cost 3 times as much to run makes no sense whatsoever.

[Okotokian]

Some here are using the same sort of thinking regarding oil that the uninformed use when trying to appease gun control advocates. "If we just give up "assault rifles" they will be placated and leave us alone." "If we just give up semi-automatic rifles they will leave us alone".

Oil foes aren't against:

• river crossings of oil pipelines
• tanker transportation of oil
• "tar sands" oil
• bilbit
• unrefined oil
• pipelines

They are against OIL. PERIOD. If you refine it they will still fight it. If you burn it to create electricity they will still fight it. If you use it to expand the petrochemical industry they will fight that.

It's good policy to find as many value added uses for our products as we can, and to do things as cleanly as we can. But don't think for a second that it will get the "environmentalists" off our backs.

[mich]

Originally Posted by Okotokian

Some here are using the same sort of thinking regarding oil that the uninformed use when trying to appease gun control advocates. "If we just give up "assault rifles" they will be placated and leave us alone." "If we just give up semi-automatic rifles they will leave us alone".

Oil foes aren't against:

• river crossings of oil pipelines
• tanker transportation of oil
• "tar sands" oil
• bilbit
• unrefined oil
• pipelines

They are against OIL. PERIOD. If you refine it they will still fight it. If you burn it to create electricity they will still fight it. If you use it to expand the petrochemical industry they will fight that.

It's good policy to find as many value added uses for our products as we can, and to do things as cleanly as we can. But don't think for a second that it will get the "environmentalists" off our backs.

That is the whole point....ignore the leaf lickers and just do it. The world as we know it needs what we have and have the ability to produce. We can use our ability as Albertans and Canadians to be the petrochemical/energy superstore of the world....

Basically play to our strengths and to hell with those that do not like it.

[elk396]

Originally Posted by winged1

You make no sense.

Darn right he does, there's a lot of truth in what he is saying. The Americans have not complained one bit about the price crash. They want Putin's cash flow minimized, 70% of Russia's GDP comes from the stuff.

[avb3]

Originally Posted by mich

That is the whole point....ignore the leaf lickers and just do it. The world as we know it needs what we have and have the ability to produce. We can use our ability as Albertans and Canadians to be the petrochemical/energy superstore of the world....

Basically play to our strengths and to hell with those that do not like it.

The problem is, what we have is not necessarily anymore our strengths. The world changed, renewables are economical competitors even at these prices, and greening of energy is not going away any time soon.

Can oil come back? Maybe. We will know only after the fact whether a sea change occurred in the past year. Regardless, just like buggy whips, the time for big oil requirements will come to an end. Especially expensive to produce oil.

The best we can do is encourage secondary and tertiary industries to be close here to feedstock. Exporting the raw stuff is probably not sustainable.

[mich]

Originally Posted by avb3

The problem is, what we have is not necessarily anymore our strengths. The world changed, renewables are economical competitors even at these prices, and greening of energy is not going away any time soon.

Can oil come back? Maybe. We will know only after the fact whether a sea change occurred in the past year. Regardless, just like buggy whips, the time for big oil requirements will come to an end. Especially expensive to produce oil.

The best we can do is encourage secondary and tertiary industries to be close here to feedstock. Exporting the raw stuff is probably not sustainable.

You and the leaf lickers can wish for all the pretty rainbows and flowers you want but here is the reality------------>>>The world has not changed and renewable's are a fantasy<<<. They cannot compete straight up...ever

Have a look around you, almost everything is petroleum based or requires carbon based energy somewhere in its history. We and the world we live in are carbon based, always have been and always will.

You want cheap energy or cheap wages? You can only have one.... think on that for awhile....

That last statement you made is almost there, we need to do it...not encourage it

[mich]

Originally Posted by elk396

Darn right he does, there's a lot of truth in what he is saying. The Americans have not complained one bit about the price crash. They want Putin's cash flow minimized, 70% of Russia's GDP comes from the stuff.

Big picture ... you got it. Backdooring Putin

It is all about the $$$$$

[ak-71]

Originally Posted by mich

Big picture ... you got it. Backdooring Putin

It is all about the $$$$$

16% of GDP, 70% of export, right? Something tells me it's all about $ though, and most of the glut is US shale explosion some don't like that much.

[ak-71]

Originally Posted by elk396

Darn right he does, there's a lot of truth in what he is saying. The Americans have not complained one bit about the price crash. They want Putin's cash flow minimized, 70% of Russia's GDP comes from the stuff.

16% of GDP, 70% of export, right? Something tells me it's all about $ though, and most of the glut is US shale explosion some don't like that much.

PS. It's tough to be a collateral damage

[JustMe]

Originally Posted by mich

You and the leaf lickers can wish for all the pretty rainbows and flowers you want but here is the reality------------>>>The world has not changed and renewable's are a fantasy<<<. They cannot compete straight up...ever



Have a look around you, almost everything is petroleum based or requires carbon based energy somewhere in its history. We and the world we live in are carbon based, always have been and always will.



You want cheap energy or cheap wages? You can only have one.... think on that for awhile....



That last statement you made is almost there, we need to do it...not encourage it

And there in may lay the problem. A lot of the other producers have both, cheap oil and cheap labour. The only way we're going to get back into the game is to lower our costs, and wages play a big part of our current costs. The Saudis just made it abundantly clear..... Lower our costs or shut it down. Not a lot of options....

[stefk]

Originally Posted by JustMe

And there in may lay the problem. A lot of the other producers have both, cheap oil and cheap labour. The only way we're going to get back into the game is to lower our costs, and wages play a big part of our current costs. The Saudis just made it abundantly clear..... Lower our costs or shut it down. Not a lot of options....

Well then, everything else that we pay money for is going to have to fall in line with lower wages. That in itself is a pipe dream. Too many greedy people and corporations out there for that to happen, coupled with the fact that a lot of things were built/purchased on credit when times were good, payments stay the same, wages won't…f#c*ed up situation for a lot of folks out there..

[avb3]

Originally Posted by mich

You and the leaf lickers can wish for all the pretty rainbows and flowers you want but here is the reality------------>>>The world has not changed and renewable's are a fantasy<<<. They cannot compete straight up...ever

Have a look around you, almost everything is petroleum based or requires carbon based energy somewhere in its history. We and the world we live in are carbon based, always have been and always will.

You want cheap energy or cheap wages? You can only have one.... think on that for awhile....

That last statement you made is almost there, we need to do it...not encourage it

You may want to reconsider your comment after reading this Bloomberg Finance analysis. Particularly pay attention to why power companies prefer renewables from a cost factor perspective.

The change is already happening.

From the report:

Wind power is now the cheapest electricity to produce in both Germany and the U.K., even without government subsidies, according to a new analysis by Bloomberg New Energy Finance (BNEF). It's the first time that threshold has been crossed by a G7 economy.

http://www.bloomberg.com/news/articl...ing-point-bnef

[straight]

Originally Posted by Headdamage

Saudi oil minister's message for high-cost crude producers: 'get out' of market

http://www.cbc.ca/news/business/saud...ston-1.3459539

It is a threat!!! They should be given a lesson of democracy. Libya and Iraq were destroyed for less.