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Scottish independence Hamsterwheel.

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Scottish independence Hamsterwheel.

Old 4th Aug 2015, 13:32
  #10701 (permalink)  
 
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SLFguy - yes it is $80/bbl. That is the ALL UP (cash and non-cash) average cost of production that includes such things as DD&A (depreciation, amortisation and decomm), ROI and taxes.

Nevertheless, you make my point when you state

The $80 number that keeps being bandied about is the reference 'SELL' price for future field development cost evaluations for many of the operators..

That "sell" price is a yardstick for the future profitability of a field. So, it needs to sell at > $80/bbl to be profitable or it won't get developed. That is my point. Much of the undeveloped UKCS reserves won't get developed in the near future (with oil circa $60/bbl), as a consequence the infrastructure systems will go down, so they will never get developed (well, maybe with a "daisy-chain" approach with FPSO's).

I see that Brent is <$50 today
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Old 4th Aug 2015, 15:20
  #10702 (permalink)  
 
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I suspect that were there to be a referendum in England as to whether Scotland should stay in the Union, the actions of the SNP would lead to a rejection of Scotland and them sent to sink or swim. A number of the people I know are rather bitter about them.
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Old 4th Aug 2015, 15:59
  #10703 (permalink)  
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I notice that prices at the pumps continue to 'fall' (albeit from a relatively high recent value).

Are the producers still producing, despite the meagre price that they are getting?

Will they, at some stage, shut up shop and we would be left without supplies?
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Old 4th Aug 2015, 16:36
  #10704 (permalink)  
 
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Na, G-CPTN, they won't shut up shop. There are places in the World where the cost of production (and transportation) is much lower than $50/bbl and quantities of the black stuff (and gas) that we can only dream about.

The high cost areas will go down (though they'll hang in for a while, in hopes that the price rises), then the current over supply will drop off and the market will come back into balance. Or, the World economy will take off and demand will increase, to mop up the oversupply of oil.That's how markets work.

In the meantime the "Mid-Streamers" (refineries) might make some money and THAT would be a change
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Old 4th Aug 2015, 17:03
  #10705 (permalink)  

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SLFguy - yes it is $80/bbl.
Hi Fellow slf - could you quote a source please - ta
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Old 4th Aug 2015, 17:10
  #10706 (permalink)  
 
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SLFguy - I could quote three but confidentiality obligations preclude. Sorry (genuinely).
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Old 4th Aug 2015, 17:33
  #10707 (permalink)  

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SLFguy - I could quote three but confidentiality obligations preclude. Sorry (genuinely)
ok - understood.

However, I very well understand operating costs in the North Sea, (it's what I do), and I can assure you that the $80 you stated is wrong.

The average operating cost is $40 - $50, and in fact with the wholesale cuts in contractors labour rates and such things as vessel rates been squeezed it's probably nearer $35 - $45.

Much of the infrastructure in the North Sea is now operating waaaay beyond its original intended lifetime and as such is fully depreciated. Yes, those assets face increasing IRM costs but those are what are driving the high side $50 Opex costs.

Likewise decomm fund provisions have been building for years in Operator's balance sheets and have always been adjusted, (read increased), as decomm reforecasts are made, (inflation/technology changes etc).

btw - so many lessons have been learned on assets like the Frigg decomm project that it's probably getting cheaper to decomm now than it was previously forecast!
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Old 4th Aug 2015, 17:45
  #10708 (permalink)  
 
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Yes, those assets face increasing IRM costs but those are what are driving the high side $50 Opex costs.

SLFguy, yep, we can agree, and it's only going to get worse as these (increasing) costs are allocated across an ever falling volume of Oil/Gas production, giving a higher unit cost/bbl.

Also my job for many, many years, right from the start of UKCS. Been through three "slumps" () but had a lot of fun(), but worried that this slump could be terminal for the UKCS, due to loss of infrastructure
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Old 14th Aug 2015, 14:31
  #10709 (permalink)  
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A Scottish 'success'.

Edinburgh Trams lost almost £450,000 in 2014 - BBC News

Edinburgh city council to spend up to £2m on tram inquiry - BBC News

https://en.wikipedia.org/wiki/Edinburgh_Trams

The scheme had an initial estimated cost of £375 million in 2003, but by May 2008 the cost had risen to £521 million.
the final cost is expected to top £1 billion
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Old 14th Aug 2015, 15:14
  #10710 (permalink)  
 
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Originally Posted by G-CPTN View Post
the final cost is expected to top £1 billion
Thank the Lord that the price of oil is above the $100 a barrel as promised and budgeted for by Alec, Nic and the rest of the gang.................

Independence in our life time
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Old 14th Aug 2015, 15:45
  #10711 (permalink)  
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Old 21st Aug 2015, 11:43
  #10712 (permalink)  
 
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........and the Scottish government continues to demonstrate what a shining example of competence and financial management it isn't:-

EU suspends £45m cash for Scotland over 'irregularities' - Telegraph

The European Union has suspended around £45 million of payments to Scotland after the discovery of accounting “irregularities”, it emerged today.

The EU said that the Scottish Government had done too little to resolve concerns about its accounting, seven months after the problems were first reported.
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Old 21st Aug 2015, 11:51
  #10713 (permalink)  
 
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Fair enough, but the EU are the last ones to give sermons on accounting practices......

The audit, published this morning, found that £109 billion out of a total of £117 billion spent by the EU in 2013 was "affected by material error”.

It means that the Brussels accounts have not been given the all clear for 19 years running.
EU auditors refuse to sign off more than £100billion of its own spending - Telegraph
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Old 30th Aug 2015, 11:20
  #10714 (permalink)  
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Plans for Scottish government budget delayed - BBC News
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Old 30th Aug 2015, 14:10
  #10715 (permalink)  
 
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If I were Scottish I would want my independence recognised, but I would be very worried about living in a virtually one-party state with no upper house, or any other checks or balances. In the light of that, the outcome of the Scottish parliamentary election is going to be very interesting to see how they cope with all this.
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Old 1st Sep 2015, 10:01
  #10716 (permalink)  
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Scotland's First Minister Nicola Sturgeon to unveil legislative plans - BBC News
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Old 2nd Sep 2015, 21:23
  #10718 (permalink)  
 
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Someone else in cloud cuckoo land LOL

A large number of people might think they want independence - but they sure will not like the bill for it
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Old 2nd Sep 2015, 21:48
  #10719 (permalink)  
 
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Originally Posted by longer ron View Post
Someone else in cloud cuckoo land LOL

A large number of people might think they want independence - but they sure will not like the bill for it
Ah but they are too clever to vote for Independence because they know that given it, they would lose all the financial support and imbalanced "investment" provided by the English.


Politicians know that given a chance, England would divest itself of the Albatross that is Scotland in a millisecond, and be better for it.
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Old 2nd Sep 2015, 22:01
  #10720 (permalink)  
 
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- but they sure will not like the bill for it
At $30-something a barrel, there would be no bill! Just no money. Ask the Greeks!! (One consolation though, it is further from Turkey to Scotland in an inflatable that from Turkey to Greece.)
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