Oil & Gas bigger picture: good news. Also, sound advice from Shell.

Nice to read some rational news about the oil & gas industry.  Haters can go on jumping up and down and panicking about trying to keep oil & gad in the ground, but meanwhile, planet Earth keeps on circling the sun, and global demand for oil & gas continues to increase, year after year after year.

Global demand for oil & gas is not going away any time soon, not for many decades.  Maybe in a century or so.  Maybe.

Anyway, I enjoyed this article, and this bit below from Shell caught my eye:

U.S. oil sector rides high in choppy seas

... The Appomattox has come to be seen as an industry bellwether for a number of reasons. To be viable, Shell had to make hundreds of small and large innovations in order to bring costs down -- by 20% even before its investment decision was taken and then by another 40% afterward, according to Rick Tallant, Shell's head of offshore in the Gulf of Mexico.

"A lot of that was structural changes, for example on drilling wells. We learned to drill 40%, 50% faster and 60% cheaper, so we use fewer logistical resources and improve and learn as we go," he said. By doing many things like that across its entire portfolio, Shell brought down costs so that the company would break even at an oil price of $30 a barrel, compared with $70 a barrel before the price collapse.

Shell's Tallant agreed that the large, highly technical projects see less job attrition. "Certainly, we have fewer people than we did five years ago, but for these big projects we still have quite a few, thousands of people. The idea is not to reduce headcount but to be more efficient and affordable."

He said also that the Appomattox illustrates how companies like Shell make decisions based on a long horizon and not on the short-term vagaries of the oil price.

"I don’t worry about the macro-economic fluxes up and down," Tallant said. "I make sure we're resilient against any price deck and that we keep our break-even costs below $30 (a barrel) on a portfolio basis. Then, if prices go higher we get the advantage of that."  ...

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Hi Tom,

What I don't understand is what's why would Trump have any interest in reducing the price of oil if the US is producing more oil than ever? Wouldn't that be good news for the shale industry?

 

Thanks, Alfonso

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6 minutes ago, alfonsosozayas said:

Hi Tom,

What I don't understand is what's why would Trump have any interest in reducing the price of oil if the US is producing more oil than ever? Wouldn't that be good news for the shale industry?

 

Thanks, Alfonso

Alfonso, I honestly don't understand Trump's rationale on oil pricing.

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Thanks Tom, you're a cool dude!

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13 hours ago, alfonsosozayas said:

Hi Tom,

What I don't understand is what's why would Trump have any interest in reducing the price of oil if the US is producing more oil than ever? Wouldn't that be good news for the shale industry?

 

Thanks, Alfonso

The political viewpoint is to please the maximum number. There might be 2 million people directly and indirectly involved in the oil industry in the US. Meanwhile about 200 million buy gasoline and kvetch when the price goes up. The macroeconomic view says oil doing well is great for America, but let's face it, statistically, 100 million of those people have an IQ below the mean, which is already an abysmal 100 points. To truly understand macroeconomics you probably need an IQ over 115. So Trump makes noises to appease the great unwashed, but isn't doing anything substantial. Remember, Clinton sold oil out of the Strategic Petroleum Reserve, explicitly to lower prices, a borderline Criminal act. But Clinton and Criminal go together like peanut butter and jelly. ;)

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1 hour ago, Ward Smith said:

The political viewpoint is to please the maximum number. There might be 2 million people directly and indirectly involved in the oil industry in the US. Meanwhile about 200 million buy gasoline and kvetch when the price goes up. The macroeconomic view says oil doing well is great for America, but let's face it, statistically, 100 million of those people have an IQ below the mean, which is already an abysmal 100 points. To truly understand macroeconomics you probably need an IQ over 115. So Trump makes noises to appease the great unwashed, but isn't doing anything substantial. Remember, Clinton sold oil out of the Strategic Petroleum Reserve, explicitly to lower prices, a borderline Criminal act. But Clinton and Criminal go together like peanut butter and jelly. ;)

The mean IQ is always 100 points, and 50% are less than 100 - by definition.

If you want to compare nations use other measures.  US ranks 31st

http://factsmaps.com/pisa-worldwide-ranking-average-score-of-math-science-reading/

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2 hours ago, Ward Smith said:

Remember, Clinton sold oil out of the Strategic Petroleum Reserve, explicitly to lower prices, a borderline Criminal act. But Clinton and Criminal go together like peanut butter and jelly. ;)

Trump sold oil out of the reserves, and then had to pay clean up costs because the oil was loaded in H2S.

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Shell can be commended for long-term thinking.

https://www.shell.com/sustainability/environment/climate-change.html

"Shell has long recognized the climate challenge and the role of energy in enabling a decent quality of life. We believe that, while technological developments will emerge, effective policy and cultural change is essential to drive low-carbon business and consumer choices and opportunities. The transition to low-carbon solutions is best underpinned by meaningful government-led carbon “pricing” mechanisms.

We welcome efforts made by governments to cooperatively reach the global climate agreement and support long-term climate goals that balance environmental pressures with development opportunities. We particularly welcomed the United Nations Paris Agreement on climate change, which came into force on November 4, 2016. The agreement seeks to limit global warming to well below 2 degrees Celsius by managing climate and environmental pressures while ensuring economic development.

Today, Shell is still primarily an oil and gas company, but we have a long tradition of innovation. We know that long-term success depends on our ability to anticipate the types of energy and fuels people will need in the future and remain commercially competitive and environmentally relevant."

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12 hours ago, Enthalpic said:

but we have a long tradition of innovation

I don't like the sound or look of these Carbon capture things myself.

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13 hours ago, Enthalpic said:

The agreement seeks to limit global warming to well below 2 degrees Celsius by managing climate and environmental pressures while ensuring economic development.

Well, when they can figure out how to put a shield in front of the sun so it stops overheating the earth(its not its actually cold historically speaking) when its magnetic field fluctuates, let us know.  Until then, pretending to sign pieces of paper by flying hypocrites around is disingenuous at best.  Conservation is best. 

What is really humorous is that the "natural" warming happening between 1850 til 1970(majority of warming+cooling, glacial melt, sea ice, and sea level rise) is A-ok in their book...

Answering WHY it happened so can model something called the future? 

Ban those Scientists ASAP!  Gettin' in the way of the UN's ability to tax!  Its not the sun; they SCREAM. In temper tantrum outbursts anytime anyone points it out.... as there literally IS no other cause...   Yet, they drum up the BS its CO2 over last 50 years with zero warming for last 20 if you remove biased city heat island data...  Uh huh. 

Its all about power.  99% of things on this earth happen because of POWER.  Those without who envy those with it who want to maintain.

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Sorry for the dose of cold water Tom. But data does not support the thesis.

Shell lost money (modest, by their standards) in their upstream division in 2016 at Brent/WTI avg price of US$43-44.

Shell 2016 financials.jpg

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On 5/28/2019 at 4:42 AM, Wastral said:

Well, when they can figure out how to put a shield in front of the sun so it stops overheating the earth(its not its actually cold historically speaking) when its magnetic field fluctuates, let us know.  Until then, pretending to sign pieces of paper by flying hypocrites around is disingenuous at best.  Conservation is best. 

What is really humorous is that the "natural" warming happening between 1850 til 1970(majority of warming+cooling, glacial melt, sea ice, and sea level rise) is A-ok in their book...

Answering WHY it happened so can model something called the future? 

Ban those Scientists ASAP!  Gettin' in the way of the UN's ability to tax!  Its not the sun; they SCREAM. In temper tantrum outbursts anytime anyone points it out.... as there literally IS no other cause...   Yet, they drum up the BS its CO2 over last 50 years with zero warming for last 20 if you remove biased city heat island data...  Uh huh. 

Its all about power.  99% of things on this earth happen because of POWER.  Those without who envy those with it who want to maintain.

They're not pretending... they really did sign that piece of paper by flying hypocrites around! 😜

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11 hours ago, Otis11 said:

They're not pretending... they really did sign that piece of paper by flying hypocrites around! 😜

DOH!  Grammer!

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