Scottish independence Hamsterwheel.
Join Date: Aug 2009
Location: Aberdeenshire
Posts: 8
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
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
Join Date: May 2001
Location: south of Cirencester, north of Lyneham
Age: 72
Posts: 1,243
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.
Resident insomniac
Join Date: Aug 2005
Location: N54 58 34 W02 01 21
Age: 75
Posts: 1,859
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?
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?
Join Date: Aug 2009
Location: Aberdeenshire
Posts: 8
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
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
Rotate on this!
Join Date: Jan 2004
Location: Aberdeen
Age: 60
Posts: 402
SLFguy - I could quote three but confidentiality obligations preclude. Sorry (genuinely)
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!
Join Date: Aug 2009
Location: Aberdeenshire
Posts: 8
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
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
Resident insomniac
Join Date: Aug 2005
Location: N54 58 34 W02 01 21
Age: 75
Posts: 1,859
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
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
Join Date: Feb 2007
Location: Oxon
Age: 62
Posts: 1,945
Originally Posted by G-CPTN
the final cost is expected to top £1 billion
Independence in our life time
Join Date: May 2005
Location: uk
Posts: 88
........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
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.
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.
Join Date: Apr 2007
Location: The Luberon
Age: 67
Posts: 900
Fair enough, but the EU are the last ones to give sermons on accounting practices......
EU auditors refuse to sign off more than £100billion of its own spending - Telegraph
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.
It means that the Brussels accounts have not been given the all clear for 19 years running.
Resident insomniac
Join Date: Aug 2005
Location: N54 58 34 W02 01 21
Age: 75
Posts: 1,859
Join Date: Oct 2013
Location: London, Monte Carlo and Bermuda (I wish!)
Age: 76
Posts: 119
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.
Resident insomniac
Join Date: Aug 2005
Location: N54 58 34 W02 01 21
Age: 75
Posts: 1,859
Join Date: May 2002
Location: glasgow
Posts: 301
Join Date: Jan 2012
Location: Midlands
Posts: 32
Originally Posted by longer ron
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
A large number of people might think they want independence - but they sure will not like the bill for it
Politicians know that given a chance, England would divest itself of the Albatross that is Scotland in a millisecond, and be better for it.
Join Date: Sep 2007
Location: A little south of the "Black Sheep" brewery
Posts: 372
- but they sure will not like the bill for it
