Off-Shore Heli Industry vs Oil Price

[FlexShaft]

A query for the Ol Offshore Heads out there,

Being a Freshman in the Global Off-Shore market, can someone shine some light historically speaking, on how dwindling foreign markets and a poor Oil price has affected the Off-Shore Heli Industry.

Logic tells me stand bye for contractual cutbacks,reduced capital expenditure(read new aircraft) and possible job losses?

[Troglodita]

Flex,

If we learn from history - which as may be seen in Afghanistan is rarely the case!

What happened in the Middle East back in 1999 - 2000 when the price fell to less than US$10.00 a barrel?
There were some short term knee jerk cut backs in the Aviation sector and offshore exploration was curtailed causing Drilling Rig Rental rates and associated pay rates to drop dramatically. OPEC cut production drastically to reduce supply and prices began to steady then recover. Because it was now cheap to drill, rigs began to be taken back on at very low rates. Helicopter business picked up in no time and by 2001 was higher than 1998 levels.

This is incredibly over simplified but remember that in shallow waters and onshore it costs very little to produce a barrel of oil ($3 - $5 a barrel)
Deepwater the figure can be closer to $15 - $25 a barrel but even at that, there is still a long way to go down from the mid $60's before profit becomes a loss! Also remember that almost all if not all BIG OIL Companies are in minority partnership with National Governments and there is a limit price per barrel above which all the money goes to the Government and the Oil Company profit is not directly affected (typically $40 a barrel in many places) These figures are just a handful are I am sure many better informed people can be more accurate but that is my guess.

In the words of the song - "Don't worry - Be Happy!":)

Trog

[FlexShaft]

Hey Trog,

Enlightening. Much appreciated:ok:

Never realized cost per barrel was so low? Kinda figured that Oil will continue to make the World go round and round and round.

Been reading some interesting stories from the local Bunny Hugger Societies, who claim Fossil Fuel supplies will start waning worldwide within the next twenty years. Not sure I see that as being too accurate, although I'm sure Governments Worldwide will be looking into Greener and more sustainable alternatives long term.

Ciao

[cpt]

I have just read a book from Eric Laurent,a well documented investigation journalist (french) who even declares that the famous "production peak" is already far behind, and that, even with the latest big discoveries the worldwide rise in demand doesn't match with the actual and future production forecast.
According to him, a colapse in energy supply, with all it's consequences is closer than we may think.
For many different reasons,these figures are difficult to check, and are said to be shaded by "majors" since they don't serve their interests.
Just a point of view....