A barrel of oil in dollars 100! It is finally!

[C moa]

The problem is that the world oil reserves are not a tank from which we still draw the maximum flow the day before the shortage, and the next day is empty.
This is what the famous and too often used R / P ratio (reserves / current production) which gives us the theoretical number of oil years remaining makes us believe.

The truth is that when you have consumed a little more than half of the total reserve (which is the case within a few years), the flow decreases more and more.
it will therefore be necessary to do without a higher percentage of oil each year than that of the year before.

Worse: the more we try to compensate for this drop in throughput by extraction technology, the faster the drop will be. extending pleasure for a few more years will be very expensive to pay because instead of being 3 or 4% in the first years, the drop is likely to reach 10% or more when it occurs.

Everyone knows that the pond is drying up but we put more pipes to pump faster.

The truth is that you have absolutely no idea what percentage of the product is available and has already been extracted.

Again, I know it will be difficult to convince you but hey ...

First of all, you should know that we consider that a well is exhausted when we have extracted around 30% of the oil present in the reservoir. This means that in all the tanks exploited and considered exhausted, there is still (on average, of course) around 70% of crude. As drilling techniques and reservoir treatments are constantly evolving, we can legitimately think that we will come back to exploit deposits considered exhausted when the techniques have evolved (the new fields are already much more efficient than 10 years ago. ).

In addition, you should know that if today drilling is done at depths between 2000 and 5000 m, there are still many possibilities because modern drilling tools can descend to 10 meters.

Finally, be aware that there have been several major discoveries in recent years (Brazil, Kazakhstan, Angola, etc.) which point to a new stage in production capacities. As has already been said, the production capacities of oil tankers depend directly on the price of a barrel. At 150 USD, all techniques and investments can be considered. At $ 35, many of these techniques are no longer profitable. Know that gold and already a certain number of projects have been frozen while waiting for "better days" by the producers (oil companies AND the owner countries).

I totally agree with what Did67 says when he says.

Suddenly, more difficult and riskier fields, the share of this expensive oil will increase in our supplies. We will be facing a sort of "geometric progression" of costs !!!

On the other hand, say

So the costs of all this oil will go up. Company profits too, by the way

is nonsense because we hope to earn more money when we take more risks.

A final remark, certainly the profits of the oil companies are significant in cash and I would not go to complain but put things into perspective !!!

In recent years, roughly speaking, TOTAL has made profits of around 12 billion Euro for a turnover exceeding 120 billion Euro, ie a net margin hovering around 10%.

Ask your local craftsman how much margin he makes. Only on the resale of the material, it makes at least 30% (plus various and varied gifts at the end of the year from the suppliers).
In mass distribution, it is accepted (whatever they say) that the margins are around 50% and the risk is still limited in this part of the economy since:
- we eat every day and they know almost by the kilo ready how many doughs and flours will be sold on Monday and Friday (very limited stock);
- unsold products are taken back by the suppliers (imagine the mouth of Leclerc if you bring back ham that you ultimately did not eat);
- they have no cash problem since when we buy we pay immediately when they will only pay their suppliers in 3 months. In petroleum, several billions or even tens of billions must be invested, several years in advance before bringing out a barrel !!!

We often talk about record profits but rarely record investments which, for your information, greatly benefits French oil companies (Technip, SAIPEM, Bourbon ...).

@Christophe and Cuicui

+1 for both.

[Did67]

In recent years, roughly speaking, TOTAL has made profits of around 12 billion Euro for a turnover exceeding 120 billion Euro, ie a net margin hovering around 10%.
.

So I don't understand why you contradicted me when I wrote that if the prices increased because more difficult deposits (and you agree), the profits of the companies too.

Suppose the price doubles. So, 240 billion in turnover (and as I said, I think it can be much more), do you think they will lower their margin ??? I doubt. So their benefits will increase ... As much as they hold us, you demonstrate it very well.

To expect on the contrary, from a strict economic point of view, would be to admit that the oil companies become ... philanthropist !!! I have a vague doubt ...

Finally, proof if one was needed: when the price of oil goes up, the share price of oil companies too !!! Because the margin is supposed to have remained stable (or perhaps increase), the turnover increasing, the profit will increase ...

So I think you were wrong to challenge my point of view.

[Did67]

Since when does an industrialist produce equipment or materials that are useless

Uh, "servà rien": to be defined.

All the question on the concept of "need".

Someone who has taken a step back from our consumer society will tell you that the majority of things sold by companies are useless.

"Getting a deal" is another story - and, in your demonstration, a little more accurate !!!

Without speaking of 'intoxication, via media, pubs, stars, etc ... to "create the market by making believe that there is a need" ...

When we see that today, it is "over-junk food" that is becoming a real public health problem, this perfectly illustrates the question of need / desire / market / creating needs. ...

[C moa]

So I think you were wrong to challenge my point of view.

I probably expressed myself badly because I did not dispute your link between the growing difficulty of extracting (therefore the increase in risk-taking) and the increase in profits. I just wanted to put into perspective the margin that was made in particular because you said:

that's why they love this idea

In my opinion as good financiers who are the bosses of these big majors, I don't think they are crazy about this situation because the business is getting harder and harder and they are taking more and more risks in order to ultimately not earn more. (from a margin point of view). In fact, I would totally agree that they are abusing it if their margins increase with the price of oil (as is the case with the state for all things fuel taxes and VAT). In reality, the fact that their margin remains stable means that they are investing more and more money (in cash) in R&D and in the development of fields.

Now that the price of a barrel is dropping, it immediately becomes a problem because many companies have frozen their investments, particularly in exploration.

Suppose the price doubles. So, 240 billion in turnover (and as I said, I think it can be much more), do you think they will lower their margin ???

Of course not and if they did they would be in danger given the investments involved. Just to finish on this notion of margin, what I wanted to highlight is:
1) admittedly the oil companies make big profits but it is also because they have big turnover;
2) in comparison with other companies (small or large) the level of their margin is very reasonable even if they are not teddy bears;
3) that we should not forget the notion of industrial / financial risk taken when we invest several hundreds of millions of euros in exploration and that at the end there is nothing or very little. Extracting petroleum is a little more complicated and risky than selling peas (and yet mass retailers earn 5 times more on average).

Finally, proof if one was needed: when the price of oil goes up, the share price of oil companies too !!! Because the margin is supposed to have remained stable (or perhaps increase), the turnover increasing, the profit will increase ...

it is also (and perhaps above all) that we can legitimately say that they will have the means to develop their activity.

So their benefits will increase ... As much as they hold us, you demonstrate it very well.

Are they holding us that much ?? I say that the question is worth asking.

As you said in your other message, the notion of utility and need (real or created) is very subjective and recent events have shown that nothing is irreversible. This summer, there has been a sharp drop in fuel sales (around 12%) and this seems to continue sincein November, the fall is also 12%.
Until now, with each increase, we thought that consumption was going to drop and finally nothing happened. Reaching € 1,50 per liter was probably the limit too much since people have since drastically reduced their consumption.
AMHA, they didn't even cut back on their trips, they just eased off and adopted a more economical driving style and which they have now kept (let's hope it lasts as long as possible). In addition, there was a significant drop in the number of visitors to supermarkets a few months ago (unfortunately I no longer have the figures) and there again, the great thinkers saw nothing coming and they find it difficult to understand and therefore react.

This proves to me that the "power" is in our hands. Whatever people try to make us believe, I am convinced that we can influence a lot of things by changing our consumption patterns without changing our comfort and everything that goes with it.
To take your example related to food, by buying our food products in AMAP, we will eat better, the farmer will be better paid and in the end, less energy will have been spent to produce and eat these products. ..

[Did67]

In my opinion as good financiers who are the bosses of these big majors, I do not think they love this situation because the business becomes more and more hard and they take more and more risks to finally not gain more (from a margin point of view). ....

By explaining, we end up being quite in agreement ...

Except on this point.

Increasing turnover, at least stable margins (if not more), rising stocks, and a quasi-captive market! There is nothing to worry about for a manager.

There must be enough to pick up some good performance bonuses ...

Of course, not too comfortable with the media on the Burmese situation, some ecologists who upset them in Alaska or in Alberta, some cronyism with Omar Bongo ... But nothing insurmountable with good coms service! !!

And our dependence: you pass on what you have yet mentioned. Invisible addiction: drugs, plastics (including prostheses - I always find it heartbreaking to flambé a product with which we make replacement heart valves! Let's go over the silicone breasts ...), clothes, keyboards, ... It is it's true that on fuel, it got a little tilted this summer.

And there, on fuel, it's the boom! 15 days waiting !!! (this noon, in the news of FRance 2). Not so easy to change the boiler! I know something to testify about it on another thread ...

[dirk pitt]

The truth is that you have absolutely no idea what percentage of the product is available and has already been extracted.

Again, I know it will be difficult to convince you but hey ...

cmoa,
Well, if we know, well, it's not me but some amateurs like Colin Campbell, Richard Duncan or others. and in addition there is more or less consensus on what is called the URR (ultimately recoverable resource) I invite you to consult the different books that talk about it. About half of the recoverable resource has been consumed.
Concerning the recovery rates, I also invite you to consult the same works and you will see that we are just doing the opposite of an increase in the recovery rate. it has been shown that the faster you pump the lower the recovery rate. to make the boreholes "last", it would be necessary to pump at lower flow rates.
a very instructive site above is resornoir.org of Emmanuel Broto who also knows what he is talking about.

regarding recent discoveries, you have to look at the figures and you quickly realize that they do not represent much in terms of current world consumption (85 Mb / d) and it is also shown that they only influence little the date of the depletion.

Finally, I am not at all a fan of the conspiracy theory and the so-called petroleum mechanics. Oil imposed itself during the 20th century mainly thanks to its extraordinary energy density and its ease of use: Rockefeller repeated to whoever wanted to hear it: oil is liquid!
no pun intended, liquids are very practical for their use, much more than gases or electricity (which is not an energy in itself but a vector)
We have all benefited from this energy windfall, but what is certain is that we will have to do without it. what I wanted to say is that after a century of intensive use, our dependence is such that nothing will make us do without it voluntarily (well it's my opinion) I think we will do without it only constrained and forced because the available quantities will decrease .... tomorrow.

one last biblio link: I recommend to everyone the excellent book by Richard Heinberg: oil, the party is over.
reference work on the subject, which also makes the link between abundant energy and world population growth. Very interesting and sometimes a little depressing.

Good evening,

[cosinus]

Excuse me if the current discussion takes but i think
that the discussion can be informed by the video that Jancovici made available from its site www.manicore.com
The direct link is
http://storage02.brainsonic.com/custome ... index.html

Sorry if you already know her ...

[Capt_Maloche]

Those who bought wind have lost.
Those who sold them (swindled) won. I wonder what accounts they stashed the cash on.

No, that's not quite it: everyone who bought on the stock market has lost.

Some sold, causing prices to fall and all others lost

but hey, we say that until we have sold, nothing is lost ...

so, aren't you lost?

[Remundo]

Hi Cosine, yes we already know it, but it is an excellent reference for new visitors

In the meantime, we can have fun ...

Here is the herald of high finance of the third millennium.

[Obamot]

Well the price of a barrel is around US$ 100.— (threshold crossed 14 years ago! And once during the first oil shock)

It has started to fall (will prices at the pump start to fall? This is already the case with E85, which has lost 20ct/l)

FC940311-455B-4CFD-90FB-07B2C01870A2.jpeg (287.97 KiB) Viewed 1124 times

European hypocrisy is doing well, thank you!