Trumps Oil Industry....

[Wombat + 1,028]

On 4/22/2020 at 2:43 AM, El Nikko said:

They've shot themselves in the foot, Saudi Arabia relies on the US to protect it in the Middle East. It has also funded extremists for decades which often causes terrorist attacks on Western soil especially in Europe and of course it's citizens were behind the 9/11 attack. People are sick of the Saudis and this time while the world economy was collapsing their actions are probably going to cause so much hostility it's hard to imagine this not becoming a major political issue once people get over the coronvirus and start paying attention to what has happened here.

Now there is such a huge oversupply it could take a year for oil prices to recover and Saudi will continue to hemorrhage money...they might be 'rich' now but that isn't going to last much longer if they're hated by just about everyone. They already have a very hostile and p*ssed off Iran who will be suffering beyond imagination and who no doubt will be ramping up shipments of arms to Yemen where the Saudi's are losing that war.

Shale might seem dead right now but you have to realise that rock and oil is still there and the cost to mobilise a rig when/if prices recover is tiny and they can do it faster than any other oil industry...so with that said shale is likely to pop back up if prices rise and will stop oil prices ever going up to where Saudi needs them to be which is $60-80.

Saudi lost they just didn't realise it yet

I think ALL fossil-fuel producers lost?

[Wombat + 1,028]

On 4/23/2020 at 4:46 AM, Valerie Williams said:

Thanks, Dan. I've actually been around before, but it's been a long time since I posted. I usually just lurk and read to get a sense of the industry as a whole.

This thread, while not quite thought-provoking, turned out to be quite provoking, after all. 😉

 

On ya bish

[Tom Kirkman + 8,860]

Food fight cleaned up in aisle 3.  Some comments are now hidden, to prevent a food fight from escalating.

Joking around is fine and encouraged.  But nastiness is not ok.

 

[Douglas Buckland + 6,308]

17 hours ago, Uvuvwevwevwe Onyetenyevwe Ugwemuhwem Osas said:

NYC is nothing like the rest of the US.  But let's assume it is.
https://www.cdc.gov/nchs/fastats/deaths.htm
Approximately 2 to 2.5 million Americans die every year from various diseases.

Currently, the weekly death rate is higher in many countries due to the virus.
But once summer begins, the weekly death rate may drop below previous years,
because people who would have died in the next 6-12 months, are dying right now.

If the virus returns in the fall, then I expect the total deaths for 2020 to be above normal,
and the death rates for 2021 and a few years beyond to be slightly below normal.

If the virus does not return in the fall, then I expect the total 2020 death rate
to be near normal (for the US as a whole).

A big chunk of "covid deaths" are people who would have died from something else within the next few years,
but instead, died from covid, or died with covid symptoms.

Or died due to comorbidities...

[Wombat + 1,028]

On 4/24/2020 at 5:12 AM, Tom Kirkman said:

Seconded.

Oh, very clever, u have only cut Canadian imports by half, why don't u go the whole hog?

[Wombat + 1,028]

On 4/24/2020 at 5:54 AM, Gerry Maddoux said:

The president can do it with one stroke of his pen. Frankly, I don't know what he's waiting for.

The Saudis used to own Motiva with Shell, but for some years they've owned it 100%, so I'm not sure we could legally block them access to their own facility, or from using whatever feedstock they deem best. But we could assuredly ban them from offloading crude to our refineries, basically undercutting any and all bids to the Cushing Hub for the nefarious purpose of bottlenecking our infrastructure. Their action is blatant and transparent. They just keep on coming, waiting to see if they're rebuffed.

Great, try using ur LTO in ur refineries and see what happens?

[Wombat + 1,028]

On 4/24/2020 at 6:36 AM, Valerie Williams said:

As with anything political, the terms are always ambiguous, and you always need to dig deeper into what one means by "free market" and other labels. I will often promote free market, perhaps in excess, and I'm aware it can make me seem like a zealot. But I do it because I think there is far too much encroachment of centralized government and crony capitalist meddling (and crony capitalists are not capitalists, IMO - closer to fascists, those buggers). I feel the need to balance it out by pushing the rhetoric the other direction.

But when you say that free market is not always best, if you mean that there should be some protections and controls (environmental safeguards, for example, etc.), then of course I totally agree. I wouldn't say I am laissez faire.

Most of the American fellas on this site sound like they Laissez faire until it comes to their own jobs? 

[Wombat + 1,028]

On 4/24/2020 at 6:48 AM, Geoff Guenther said:

To underline your numbers: if 10% of NY has been infected and it caused 20,000 deaths, we can expect 50% infected to cause 100,000 deaths. The US has 15x the population of NY, so you could expect to see 1.5 million deaths unless we can delay the pandemic until we get better treatments.

On the OPEC+ side, the government's probably too slow and too late to do anything about it. Because this market bottom is hitting so hard it also may, mercifully, be a fairly short bottom that shakes out zombies and gets back to a new normal.

A brutal but fast shakeout could see oil back in the $50 range this time next year and without the companies that had to keep drilling just to service their debt. Government intervention could just prolong the agony.

I think what will prolong the agony is the sheer size of the inventory overhang. After 2014 crash, it took 6 years just to clear an excess of 300mb, despite OPEC+ cuts! This gonna hurt oil for decades???

[Wombat + 1,028]

17 hours ago, D Coyne said:

Valerie,

Tight oil only can be utilized up to about 5000 kb/d by US refineries, the rest gets exported.  It is doubtful that North America could be self sufficient in C+C output, unless Mexico and Canada can utilize the extra tight oil from the US.  North America might produce close to enough C+C to be self sufficient if the Alberta oil sands had a pipeline to the Gulf coast (or rail capacity to move the oil (a more expensive option).  Not sure if the mix of oil is right for existing refineries.  

The oil of course does not "run out", it gets more expensive and may gradually decrease in maximum output at any given oil price level.  A reasonable estimate for remaining resources of tight oil is about 75 Gb, at 1.8 Gb per year (5 Mb/d) and with about 15 Gb already produced, we would be halfway through the resource in about 17 years (this might be the peak if the output curve was roughly bell shaped).  Other US output(besides tight oil) will likely decline over the next 17 years, so peak US output is likely to occur before 2037.  If we quickly ramp tight oil output back to 8 Mb/d or more, the peak probably occurs between 2025 and 2030, likely 2025 if we go to more than 8 Mb/d, and roughly 2025 if we plateau at around 8 Mb/d.  Tight oil doesn't compete much with offshore as it is lighter and most US refineries need heavier crude.

All the more reason to buy a friggin Tesla??????????

[James Regan + 1,776]

1 hour ago, Wombat said:

Most of the American fellas on this site sound like they Laissez faire until it comes to their own jobs? 

Laissez Faire is a term which could not exist in the Modern Oil Industry as a whole but certainly could in a regional play- Unfortunately the regional play of the day forced its way into the Oil Industry - It would have been better left on the back burner as the USAs SPR, the hand was played far to quickly. America were doing just fine extracting oil or profit around the globe. World domination tends to have consequences and unfortunately the US LTO sector was not robust enough to take on the globe, this is undeniable and what we are seeing now is proof of that.

"Drew a bad card in rub-a-dub-style"

The ace card of low gas at the pump, has always plagued the US Governments and the balancing act is precarious, better to have a healthy industry with a  lot of employment than no jobs but cheap gas - This proves how much the average Joe gives a hoot about the oil Industry or what medicine show is running around the hill.

Edited April 25, 2020 by James Regan

[Wombat + 1,028]

14 hours ago, RSD said:

If the U.S. cuts its daily production to 8.5mbbl/day then that production will survive so there won't be a lot of reliance on the Saudis - and most U.S. oil imports come from Canada anyway.  If there isn't a big hit now then there will be another over-production problem in 18 months time and it will be groundhog again and the cycle will just keep repeating itself...  OPEC is a way of matching production to demand and it works when it wants it to work (most of the time) - the U.S. just hasn't figured out a way of matching production to demand and so big boom and bust cycles will always be the result.

Well, 3 years ago, u were bragging about how u had replaced SA as the "swing" producer, so go ahead and swing?

[Wombat + 1,028]

40 minutes ago, James Regan said:

Laissez Faire is a term which could not exist in the Modern Oil Industry as a whole but certainly could in a regional play- Unfortunately the regional play of the day forced its way into the Oil Industry - It would have been better left on the back burner as the USAs SPR, the hand was played far to quickly. America were doing just fine extracting oil or profit around the globe. World domination tends to have consequences and unfortunately the US LTO sector was not robust enough to take on the globe, this is undeniable and what we are seeing now is proof of that.

"Drew a bad card in rub-a-dub-style"

The way I see it, whoever wants to "dominate" the O&G industry is the greediest? That puts US at #1, Russia at #2, and SA at #3, the same order in which the pain is felt when karma comes calling?

[Wombat + 1,028]

47 minutes ago, James Regan said:

Laissez Faire is a term which could not exist in the Modern Oil Industry as a whole but certainly could in a regional play- Unfortunately the regional play of the day forced its way into the Oil Industry - It would have been better left on the back burner as the USAs SPR, the hand was played far to quickly. America were doing just fine extracting oil or profit around the globe. World domination tends to have consequences and unfortunately the US LTO sector was not robust enough to take on the globe, this is undeniable and what we are seeing now is proof of that.

"Drew a bad card in rub-a-dub-style"

U know, Australia has just pipped Qatar as worlds largest LNG producer but US plans to sell more LNG than Australia and Qatar COMBINED???????? WTF was America thinking? Where is the market? U only have 5 trains out of 42 so far, but that is a lot of LNG with nowhere to go. I have heard that Chevron wants to TRIPLE output of the Permian within 5 years, again, where on Earth is the market? There is a graph that has been shown on this site several times explaining that "every time the Saudis try to kill US shale, they fail". Perhaps the dopey US oil execs shld turn their focus to Russia, given they are the main competitor? Indeed, they would do well to read Aesop's Fables. There is a tale about the bear and the lion fighting over a bit of food, and the fox comes and takes the food while they busy fighting. Russia has "stolen" America's chance to export LNG to Europe and China (Power of Siberia, Nordstream 2, TurkStream), coz US was too busy focusing on Australia, and has lost market share in oil to Russia coz it was too busy focussing on SA? Talk about dumb. The fox has already eaten America's dinner, all gone now!

[James Regan + 1,776]

10 minutes ago, Wombat said:

U know, Australia has just pipped Qatar as worlds largest LNG producer but US plans to sell more LNG than Australia and Qatar COMBINED???????? WTF was America thinking? Where is the market? U only have 5 trains out of 42 so far, but that is a lot of LNG with nowhere to go. I have heard that Chevron wants to TRIPLE output of the Permian within 5 years, again, where on Earth is the market? There is a graph that has been shown on this site several times explaining that "every time the Saudis try to kill US shale, they fail". Perhaps the dopey US oil execs shld turn their focus to Russia, given they are the main competitor? Indeed, they would do well to read Aesop's Fables. There is a tale about the bear and the lion fighting over a bit of food, and the fox comes and takes the food while they busy fighting. Russia has "stolen" America's chance to export LNG to Europe and China (Power of Siberia, Nordstream 2, TurkStream), coz US was too busy focusing on Australia, and has lost market share in oil to Russia coz it was too busy focussing on SA? Talk about dumb. The fox has already eaten America's dinner, all gone now!

Recent trip to Caratha I saw how big you guys are hitting LNG, fair dinkum, ridgydidge and all that keep it going, from what I saw the Industry was looking stronger, Perth had a certain buzz about it that I hadn't seen in years. Woodside and Beach etc all look like solid companies. Hope it continues. Dont go into the sea there are Noahs at PE, haha, you guys crack me up Kin Oath maate....

Edited April 25, 2020 by James Regan
Currently watching a fight where an Aussie rules football game broke out...

[Douglas Buckland + 6,308]

Wombat is on a roll again, good time to grab a coffee...

[Tom Kirkman + 8,860]

6 minutes ago, Douglas Buckland said:

Wombat is on a roll again, good time to grab a coffee...

Yep.  I already did one cleanup this morning.  If I have to do another cleanup, I'm going to get annoyed.

@Wombat, you make some good points.  Some fair enough jabs that sting.  Just please keep it clean, no punches below the belt.

[Wombat + 1,028]

5 minutes ago, Tom Kirkman said:

Yep.  I already did one cleanup this morning.  If I have to do another cleanup, I'm going to get annoyed.

@Wombat, you make some good points.  Some fair enough jabs that sting.  Just please keep it clean, no punches below the belt.

No worries, sometimes things get lost in translation. James Regan pointed out to me that what was "standard fare" here is sometimes "pie in the face" to a yank, so my apologies to Dougie.

[Tom Kirkman + 8,860]

1 minute ago, Wombat said:

No worries, sometimes things get lost in translation. James Regan pointed out to me that what was "standard fare" here is sometimes "pie in the face" to a yank, so my apologies to Dougie.

Fair enough.  Carry on.

[Douglas Buckland + 6,308]

5 minutes ago, Wombat said:

No worries, sometimes things get lost in translation. James Regan pointed out to me that what was "standard fare" here is sometimes "pie in the face" to a yank, so my apologies to Dougie.

No apologies necessary, but thanks anyway!

[Wombat + 1,028]

44 minutes ago, James Regan said:

Recent trip to Caratha I saw how big you guys are hitting LNG, fair dinkum, ridgydidge and all that keep it going, from what I saw the Industry was looking stronger, Perth had a certain buzz about it that I hadn't seen in years. Woodside and Beach etc all look like solid companies. Hope it continues. Dont go into the sea there are Noahs at PE, haha, you guys crack me up Kin Oath maate....

Actually, Woodside, Santos and Beach are all losing money hand over fist at the moment, cutting capex to the bone just like every other O&G company on the planet. I have thought of buying in while the price so low but tbh, I don't think LNG prices will recover for at least a decade, if ever. It's not just US LNG coming on stream, also Qatar, Russia, Africa etc. Gonna be trillions of stranded assets, even worse than oil. I really don't see oil demand going back to normal once the lockdowns lifted, maybe back to 85-90%, with an enormous overhang of inventories. It's not just O&G, share markets in general will likely crash big in August when Q2 earnings revealed. This just the beginning of the slow moving train wreck unfortunately. Property prices only just starting to tank, but give it 4 months, everyone be talkin about banking crises again?

[James Regan + 1,776]

1 minute ago, Wombat said:

Actually, Woodside, Santos and Beach are all losing money hand over fist at the moment, cutting capex to the bone just like every other O&G company on the planet. I have thought of buying in while the price so low but tbh, I don't think LNG prices will recover for at least a decade, if ever. It's not just US LNG coming on stream, also Qatar, Russia, Africa etc. Gonna be trillions of stranded assets, even worse than oil. I really don't see oil demand going back to normal once the lockdowns lifted, maybe back to 85-90%, with an enormous overhang of inventories. It's not just O&G, share markets in general will likely crash big in August when Q2 earnings revealed. This just the beginning of the slow moving train wreck unfortunately. Property prices only just starting to tank, but give it 4 months, everyone be talkin about banking crises again?

Yes you maybe right the Wango Contango and bat eaters coupled with the camel jockeys and meddling bears alongside the pump and dumpers and that pesky virus has put us into untravelled waters, who know maybe the world is flat after all. Plus we managed this without Iran or Israel getting into a fight behind the bike shed, meanwhile Syria still in tatters apparently taking a halftime breather, Brexit looks like school kids gambling for fags (cigarettes to the heathens), Luxembourg suddenly seems to not exist, did it ever? 

Future looks bright 😎

[Wombat + 1,028]

3 minutes ago, James Regan said:

Yes you maybe right the Wango Contango and bat eaters coupled with the camel jockeys and meddling bears alongside the pump and dumpers and that pesky virus has put us into untravelled waters, who know maybe the world is flat after all. Plus we managed this without Iran or Israel getting into a fight behind the bike shed, meanwhile Syria still in tatters apparently taking a halftime breather, Brexit looks like school kids gambling for fags (cigarettes to the heathens), Luxembourg suddenly seems to not exist, did it ever? 

Future looks bright 😎

I'm just glad my eldest daughter speaks fluent Mandarin, gonna need an interpreter soon

[Tom Kirkman + 8,860]

3 minutes ago, James Regan said:

Yes you maybe right the Wango Contango and bat eaters coupled with the camel jockeys and meddling bears alongside the pump and dumpers and that pesky virus has put us into untravelled waters, who know maybe the world is flat after all.

[James Regan + 1,776]

2 minutes ago, James Regan said:

Actually, Woodside, Santos and Beach are all losing money hand over fist at the moment, cutting capex to the bone just like every other O&G company on the planet.

In reality the virus has been used wrongly by the IOCs in particular, that part of the contract "act of God" has been abused in order to readjust day rates etc, this has really put the contractors up against the wall and show bad faith, the business is not going away its just going to get tighter. Who will suffer in the end will be the IOCs as they are cutting their own noses off, the old adage of "Good work aint Cheap and Cheap work aint good" doesn't seem to bother them until they drop a stack on a rig that costs 650K a day (and worth every penny). We may have a surplus at the moment but being short sighted has damaged this Industry before and continues to do so.

We will be building rigs again in the next 5 years.......

[James Regan + 1,776]

2 minutes ago, Tom Kirkman said:

That brute in the middle was stolen from India, and rests on the head of the rightful owner. What did the Romans ever do for us? We are just sitting back watching the fun, we will rule the waves again.