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Estimated 71 Billion Barrels...
Rank: Elder Joined: 12/27/2012 Posts: 2,256 Location: Bandalungwa
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With the price of oil plummetting, viability becomes an issue. I see that Saudi Arabia cost per barrel is only $2 per barrel. So they literally dont care.
However shale oil in the US and Canada costs about $65 per barrel. At this rate the US oil boom could soon end.
Does anyone know what the average cost per barrel at Turkana will be? And what about Uganda?
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Rank: Member Joined: 12/30/2012 Posts: 545 Location: NBI
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Alba wrote:
Does anyone know what the average cost per barrel at Turkana will be? And what about Uganda? I would imagine oil drilling costs are roughly the same unless of peculiar circumstances. That is why low global oil prices are bad for capital investments in new oil rigs. BITCOIN TRADERS KENYA Whatsapp group +254 705 299 429
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Rank: Member Joined: 12/30/2012 Posts: 545 Location: NBI
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Knight-027 wrote:Good analysis. The one thing you have over looked is the benefit you gain by not importing oil/gas in a country. If the product becomes cheaper ( because its available locally) then to some extent the whole economy is benefiting starting from cheaper electricity. I would think that emphasis should be put in the refinery sector where locals will ultimately benefit. <<<Yes! VEry true. Tricle down benefits should also be accounted for. Lower energy inputs - fair pricing of goods for example. BITCOIN TRADERS KENYA Whatsapp group +254 705 299 429
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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Alba wrote:With the price of oil plummetting, viability becomes an issue. I see that Saudi Arabia cost per barrel is only $2 per barrel. So they literally dont care.
However shale oil in the US and Canada costs about $65 per barrel. At this rate the US oil boom could soon end.
Does anyone know what the average cost per barrel at Turkana will be? And what about Uganda? Its lunacy that something that costs less than Usd 20 on average should sell for over usd 100 at final consumption. Kenya's and Uganda's oil are likely to cost less than Usd 20 as they are onshore. I am assuming thats coz many onshore extractions cost less than that. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Veteran Joined: 7/5/2010 Posts: 2,061 Location: Nairobi
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Obi 1 Kanobi wrote:Alba wrote:With the price of oil plummetting, viability becomes an issue. I see that Saudi Arabia cost per barrel is only $2 per barrel. So they literally dont care.
However shale oil in the US and Canada costs about $65 per barrel. At this rate the US oil boom could soon end.
Does anyone know what the average cost per barrel at Turkana will be? And what about Uganda? Its lunacy that something that costs less than Usd 20 on average should sell for over usd 100 at final consumption. Kenya's and Uganda's oil are likely to cost less than Usd 20 as they are onshore. I am assuming thats coz many onshore extractions cost less than that. There is an interesting twist to this story that I read in one of the international news sites....Saudi Arabia and some other OPEC countries want the prices to remain low so that small and medium American producers who produce shale oil and gas by fracking would run out of business by the high costs of shale oil production. So it appears this phenomenon will correct itself. But I think its better for America to source more of its oil internally rather than engage in global geopolitical skulduggery to access cheap oil.
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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Alba wrote:With the price of oil plummetting, viability becomes an issue. I see that Saudi Arabia cost per barrel is only $2 per barrel. So they literally dont care.
However shale oil in the US and Canada costs about $65 per barrel. At this rate the US oil boom could soon end.
Does anyone know what the average cost per barrel at Turkana will be? And what about Uganda? average break even cost would around $50 per barrel but you need $90 for the explorers to compensate for the risk of exploring a new frontier. The saudis care because they need oil at $90 to balance their budget but they need some shale oil producers to go bankrupt to cut off competition. Oil boom will not end soon because by 2030 consumption will outstrip demand by far. This is a temporary price correction likely to end in 2018
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Rank: Elder Joined: 12/2/2009 Posts: 2,458 Location: Nairobi
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quicksand wrote:Obi 1 Kanobi wrote:Alba wrote:With the price of oil plummetting, viability becomes an issue. I see that Saudi Arabia cost per barrel is only $2 per barrel. So they literally dont care.
However shale oil in the US and Canada costs about $65 per barrel. At this rate the US oil boom could soon end.
Does anyone know what the average cost per barrel at Turkana will be? And what about Uganda? Its lunacy that something that costs less than Usd 20 on average should sell for over usd 100 at final consumption. Kenya's and Uganda's oil are likely to cost less than Usd 20 as they are onshore. I am assuming thats coz many onshore extractions cost less than that. There is an interesting twist to this story that I read in one of the international news sites....Saudi Arabia and some other OPEC countries want the prices to remain low so that small and medium American producers who produce shale oil and gas by fracking would run out of business by the high costs of shale oil production. So it appears this phenomenon will correct itself. But I think its better for America to source more of its oil internally rather than engage in global geopolitical skulduggery to access cheap oil. If i were the Americans, then i would 'halt' the shales and buy now from OPEC, when prices go up I again dig mine to stabilise or bring down the prices as it is happening now. Till the last man standing! But if Saudis are okey with current trend, then i would imagine they are happy to debilitate the Iranians and Russians
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Rank: Elder Joined: 12/4/2009 Posts: 10,701 Location: NAIROBI
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All sub Saharan oil producing countries are suffering budget deficits and lower than expected revenues due to the fall in oil prices. Nigeria had initially budgeted with crude prices at $90 which was revised downwards to $73 when the 78 mark was breached. Last week they revised downwards to $65 when OPEC couldn't agree on oil production cuts.Now its at $66 I don't know what next for them. Same case applies to Angola and equatorial Guinea who also together with Nigeria were major exporters to America but now America is no longer buying their oil. Nigeria wanted to start selling oil to S Africa but they couldn't agree because to S Africa its cheaper buying oil from Iran than Nigeria. Meanwhile the glut continues Wealth is built through a relatively simple equation Wealth=Income + Investments - Lifestyle
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Rank: Veteran Joined: 7/5/2010 Posts: 2,061 Location: Nairobi
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poundfoolish wrote:quicksand wrote:Obi 1 Kanobi wrote:Alba wrote:With the price of oil plummetting, viability becomes an issue. I see that Saudi Arabia cost per barrel is only $2 per barrel. So they literally dont care.
However shale oil in the US and Canada costs about $65 per barrel. At this rate the US oil boom could soon end.
Does anyone know what the average cost per barrel at Turkana will be? And what about Uganda? Its lunacy that something that costs less than Usd 20 on average should sell for over usd 100 at final consumption. Kenya's and Uganda's oil are likely to cost less than Usd 20 as they are onshore. I am assuming thats coz many onshore extractions cost less than that. There is an interesting twist to this story that I read in one of the international news sites....Saudi Arabia and some other OPEC countries want the prices to remain low so that small and medium American producers who produce shale oil and gas by fracking would run out of business by the high costs of shale oil production. So it appears this phenomenon will correct itself. But I think its better for America to source more of its oil internally rather than engage in global geopolitical skulduggery to access cheap oil. If i were the Americans, then i would 'halt' the shales and buy now from OPEC, when prices go up I again dig mine to stabilise or bring down the prices as it is happening now. Till the last man standing! But if Saudis are okey with current trend, then i would imagine they are happy to debilitate the Iranians and Russians But then these prices are just cycles. The previous one was expensive, which prompted investors to think it must be cheaper to invest and develop new fields rather than import. But mid cycle the tide turned, there is a glut and prices fell. Those who sunk money in will want their money back, at least the principals. Investments cannot wait for a good market outlook, human resources will shift, equipment depreciate (whats that term for idle assets?), futures, contracts and the like shift wildly; the best they can do is hold on tight and hope they don't get shaven or-increase the efficiencies and reduce the costs of shale oil production.
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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quicksand wrote:poundfoolish wrote:quicksand wrote:Obi 1 Kanobi wrote:Alba wrote:With the price of oil plummetting, viability becomes an issue. I see that Saudi Arabia cost per barrel is only $2 per barrel. So they literally dont care.
However shale oil in the US and Canada costs about $65 per barrel. At this rate the US oil boom could soon end.
Does anyone know what the average cost per barrel at Turkana will be? And what about Uganda? Its lunacy that something that costs less than Usd 20 on average should sell for over usd 100 at final consumption. Kenya's and Uganda's oil are likely to cost less than Usd 20 as they are onshore. I am assuming thats coz many onshore extractions cost less than that. There is an interesting twist to this story that I read in one of the international news sites....Saudi Arabia and some other OPEC countries want the prices to remain low so that small and medium American producers who produce shale oil and gas by fracking would run out of business by the high costs of shale oil production. So it appears this phenomenon will correct itself. But I think its better for America to source more of its oil internally rather than engage in global geopolitical skulduggery to access cheap oil. If i were the Americans, then i would 'halt' the shales and buy now from OPEC, when prices go up I again dig mine to stabilise or bring down the prices as it is happening now. Till the last man standing! But if Saudis are okey with current trend, then i would imagine they are happy to debilitate the Iranians and Russians But then these prices are just cycles. The previous one was expensive, which prompted investors to think it must be cheaper to invest and develop new fields rather than import. But mid cycle the tide turned, there is a glut and prices fell. Those who sunk money in will want their money back, at least the principals. Investments cannot wait for a good market outlook, human resources will shift, equipment depreciate (whats that term for idle assets?), futures, contracts and the like shift wildly; the best they can do is hold on tight and hope they don't get shaven or-increase the efficiencies and reduce the costs of shale oil production. Now this is going to be one of the most interesting high stakes poker games ever. @Quicksand, as you are saying, the Saudi Arabians are happy to keep the international prices low so as to drive capital away from US shale investments, including research. Saudi has enough cheap production and can afford the steep price cuts, plus most of their oil revenues go into sovereign funds. Other Opec countries like Nigeria, Venezuela and Angola have very expensive deep sea wells and generally consume all their oil revenue, so they are facing huge budget deficits, their problems are compunded by the fact that they cannot increase production due to a supply glut. Where does this leave Russia, their oil production also happens to be very expensive but they have huge supplies. They are likewise loosing. For the new oil frontiers like Kenya, TZ and Mozambique, its a mixed bag. I think for Kenya, the gava is very committed to seeing production plus our finds are onshore and easily accessible. For Mozambique and TZ, those huge gas deposits are in real deep waters and may hav eto be placed on ice until the market settles. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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Whilst the production breakeven price is $50, I highly doubt that is the breakeven price once you factor capital costs. Why do I say this? both Tullow and Africa Oil have been facing down since January i.e. before the oil price collapsed and have been unable to raise capital. Reason? The demand for oil is no longer $100, but something close to $70. That implies that your expected return is no longer $50 but more like $20. Would be surprised if we get to sell any oil from Turkana by 2016 as earlier predicted. Sehemu ndio nyumba
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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Mainat wrote:Whilst the production breakeven price is $50, I highly doubt that is the breakeven price once you factor capital costs. Why do I say this? both Tullow and Africa Oil have been facing down since January i.e. before the oil price collapsed and have been unable to raise capital. Reason? The demand for oil is no longer $100, but something close to $70. That implies that your expected return is no longer $50 but more like $20. Would be surprised if we get to sell any oil from Turkana by 2016 as earlier predicted.
But you are forgetting that tullow and africaoil borrowed to fund the exploration in turkana field and GoK took on eurobonds in the hope of paying back when the oil from turkana kicks in 2017
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Mainat wrote:Whilst the production breakeven price is $50, I highly doubt that is the breakeven price once you factor capital costs. Why do I say this? both Tullow and Africa Oil have been facing down since January i.e. before the oil price collapsed and have been unable to raise capital. Reason? The demand for oil is no longer $100, but something close to $70. That implies that your expected return is no longer $50 but more like $20. Would be surprised if we get to sell any oil from Turkana by 2016 as earlier predicted.
Ditto, i'd be shocked too. Seems like the Saudis are hellbent at stopping all the exploration going on everywhere "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore .
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Rank: Veteran Joined: 7/1/2014 Posts: 903 Location: sky
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murchr wrote:Mainat wrote:Whilst the production breakeven price is $50, I highly doubt that is the breakeven price once you factor capital costs. Why do I say this? both Tullow and Africa Oil have been facing down since January i.e. before the oil price collapsed and have been unable to raise capital. Reason? The demand for oil is no longer $100, but something close to $70. That implies that your expected return is no longer $50 but more like $20. Would be surprised if we get to sell any oil from Turkana by 2016 as earlier predicted.
Ditto, i'd be shocked too. Seems like the Saudis are hellbent at stopping all the exploration going on everywhere http://nypost.com/2014/12/14/saudi-arabias-oil-war-against-iran-and-russia-2/There are only two emotions in the stock market, fear and hope. The problem is, you hope when you should fear and fear when you should hope
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore .
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Rank: Member Joined: 7/17/2011 Posts: 627 Location: Mbui-Nzau, Kikumbulyu
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Now crude oil at $50's this is headed to 30's
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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littledove wrote:murchr wrote:Mainat wrote:Whilst the production breakeven price is $50, I highly doubt that is the breakeven price once you factor capital costs. Why do I say this? both Tullow and Africa Oil have been facing down since January i.e. before the oil price collapsed and have been unable to raise capital. Reason? The demand for oil is no longer $100, but something close to $70. That implies that your expected return is no longer $50 but more like $20. Would be surprised if we get to sell any oil from Turkana by 2016 as earlier predicted.
Ditto, i'd be shocked too. Seems like the Saudis are hellbent at stopping all the exploration going on everywhere http://nypost.com/2014/12/14/saudi-arabias-oil-war-against-iran-and-russia-2/ The Saudis are fighting a proxy economic war for NATO. NATO wants to break Putin's back but the US does not want to be seen as acting against its own shale oil producers. Life is short. Live passionately.
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Business Daily wrote:Tullow Oil said on Wednesday that it had found oil in two new wells in the South Lokichar Basin in Turkana.
An operations update by the UK explorer found that the Ngamia-7 appraisal well found 132 metres of oil net of costs of extraction (also called net oil pay) while the Ekales-2 appraisal well found net oil pay of between 50 and 70 metres. "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore .
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Rank: Veteran Joined: 11/15/2013 Posts: 1,977 Location: Here
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murchr wrote:Business Daily wrote:Tullow Oil said on Wednesday that it had found oil in two new wells in the South Lokichar Basin in Turkana.
An operations update by the UK explorer found that the Ngamia-7 appraisal well found 132 metres of oil net of costs of extraction (also called net oil pay) while the Ekales-2 appraisal well found net oil pay of between 50 and 70 metres. Tullow is hogwash! it will discover and discover and diacover...but has not exported a single barrell. Foreigners know how to cheat black Africans. Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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Boris Boyka wrote:murchr wrote:Business Daily wrote:Tullow Oil said on Wednesday that it had found oil in two new wells in the South Lokichar Basin in Turkana.
An operations update by the UK explorer found that the Ngamia-7 appraisal well found 132 metres of oil net of costs of extraction (also called net oil pay) while the Ekales-2 appraisal well found net oil pay of between 50 and 70 metres. Tullow is hogwash! it will discover and discover and diacover...but has not exported a single barrell. Foreigners know how to cheat black Africans. Where is the infrastructure? You have no roads leave alone the pipeline how do you expect them to export? FYI before they start pumping out oil, they have to know how big the resource is, is it worth the investment? "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore .
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