Fuel up/down again

Extraction costs are actually falling all the time as technology improves. You'd be surprised at some of the reported total costs for some of the shale oil and gas extraction projects.

They will essentially cap the price of oil as they will simply switch back on again if the price is high enough.

If demand swings are severe enough then there is a potential for a short term squeeze. However, no body is projecting the long term oil price to be above $100 a barrel for quite some time. Similarly you can have the opposite of a squeeze where supply increases further.

If it wasn't for OPEC, then the long term cost of oil would be even lower. OPEC prevents member countries from lowering the price by giving them quotas. It is in the short term interest of countries to sell an extra barrel of oil and make a large margin on that barrel (as extraction costs for OPEC members are so low), however the cartel is relatively well disciplined.

Some are actually predicting the fall of OPEC in which case you would see a rise in supply above the combined 30m quota and prices come crashing down closer to the marginal cost of extraction.
 
But, for the UK sector at least, the lift cost for many companies already exceeds the market price. That is the problem here with respect to jobs.
 
Overlag said:
exactly, more normal price would be around $30-50?
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Don't think many fields in the North Sea would be profitable at $30-50.

OPEX/Operating costs have increased significantly in places like the North Sea over the past 5 years. Not sure the exact reason, probably everyone jumping on the gravy train and milking it for all it's worth. Combine that with decreasing production and your break even point is now noticeably higher.

Will be interesting to see how much operators can realistically cut their OPEX.
 
[TW]Fox;27451598 said:
No sympathy for the contractors - they've been making enormous amounts of money precisely because they offer instant and easily expendable skill. The fact they could at any point be curtailed is why they've been able to enjoy high earning power which any half decent contractor has put enough of away.
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Absolutely this, living north the amount of people my age working offshore is ridiculous, they do absolutely nothing for 3 weeks, get paid a fortune, have 3 weeks off, then repeat. Drive around in Range Rovers and go on 15 holidays a year.

The oil industry is a lucrative business, I don't think there is anyone who works in it, that isn't on a very healthy wage.
 
rossk26 said:
Absolutely this, living north the amount of people my age working offshore is ridiculous, they do absolutely nothing for 3 weeks, get paid a fortune, have 3 weeks off, then repeat. Drive around in Range Rovers and go on 15 holidays a year.

The oil industry is a lucrative business, I don't think there is anyone who works in it, that isn't on a very healthy wage.
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Mud Loggers. They are on pretty dire wages. Somewhere around £20k I believe. Good place to start working offshore mind. Workshop techs and stuff too. There are plenty low paid jobs in the industry, just the guys working offshore, or those promoted from offshore that are on decent wages. Even a lot of the field jobs have salaries around £20k, but a lot of them make their money from their field days, which can pay anything from £75 per day to £400+ on top of their salaries.
 
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Can't imagine e there is any real need for a mud logger onshore though. And can't realistically be hugely more anyway. But it isn't a good wage, by any stretch of the imagination, for working away from home for 150+ days per year. Especially when you essentially need to be degree qualified to get that job nowadays.

As an example of how low that wage is though, the people cleaning the mud loggers sheets gets around 10k more than them.
 
£20k dire wage?

Crikey, I've been working 5 years since I completed my degree and only on 10% more than that and currently consider it a decent wage (for up north anyway).

If that's the most dire wage for the oil industry, I'm impressed. Considering it must be an entry level position too.
 
Yeah but presumably you get to sleep in your own bed at night, that is presumably not resembling a prison on top of a ticking time bomb? You presumably don't travel to work on the train, car, airplane then a helicopter for which you need 3 days training to help you survive should it ditch in the cold North Sea while wearing a survival suit without which you would likely die in a few minutes from exposure.

There is inherent risk in working offshore compared to working onshore. And people should be paid accordingly.

To be fair, I only assume a mud logger gets 20k now. Last time I spoke to one it was 16k about 4 years ago.
 
rossk26 said:
£20k dire wage?

Crikey, I've been working 5 years since I completed my degree and only on 10% more than that and currently consider it a decent wage (for up north anyway).

If that's the most dire wage for the oil industry, I'm impressed. Considering it must be an entry level position too.
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I know little of the north but that would be extremely poor in the south.

You cant really consider the oil industry as "up north" even though it geographically is. Its an isolated industry based where the oil happens to be based.
 
Jez said:
I know little of the north but that would be extremely poor in the south.

You cant really consider the oil industry as "up north" even though it geographically is. Its an isolated industry based where the oil happens to be based.
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It's above average for Northumberland

For the same job "down south" I'd be on considerably more. But I've just bought a 3 bed end terrace for £118k in a nice area, so swings in roundabouts :p
 
[TW]Fox;27450572 said:
But is also reflected in share price.
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Dividends haven't been cut yet. But if this continues then the pension funds need dividend. Share price is irrelevant as they have already been bought and seen as long term holds

I don't know the number now. But a few years ago £1 in every £6 was BP in UK pension funds.

But yes if you want to see a real impact of low oil price killing a economy look at Russia
 
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rossk26 said:
It's above average for Northumberland

For the same job "down south" I'd be on considerably more. But I've just bought a 3 bed end terrace for £118k in a nice area, so swings in roundabouts :p
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Yep, a 3 bed terraced house in a nice area here would be £300k at least :)

Joe T said:
Can we not get back to posting about how much the Amex offer reduces the prices at the pump please? :)



:p
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Of course! I purchased 46.81L for £45.04 this morning, 96.2ppl :cool:
 
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