Long term OIL

[bryant.coleman]

Thats sounds similar to the Kurds in North of Iraq and they have proved themselves invaluable in defence of the country, seems foolish not support and allow open commerce in all parts of the country.    The Kurds still argue on taxes and policies relating to oil sales but luckily nobody is at war over it.   The rebels sound on the wrong path there because the damage requires money to fix which only puts them back in the hands of main government.

If rebels gave some percentage of sales taken, they could proceed on the basis of allowing greater quantities  of oil to be processed rather then giving a higher percentage of the profits which I guess is the problem now.  Eventually government would give way  to the lost revenue situation, with broken wells it puts them into stalemate.    The country is so new now that they dont even know how to argue the points I think

The situation in Libya can't be compared to that in the Iraqi Kurdistan.

In Iraq, the government recognizes the Kurdish authorities, and vice-versa. But that is not the case in Libya. Both the sides are fighting against each other (allowing the Libyan faction of the ISIS to expand). Both of them seems to be lacking commonsense. Anyway... good for other oil producing countries such as Russia and Venezuela.

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[romero121]

Oil is big but not that big. Many different forms of energy and alternate products that are replacing oil every day. I'll laugh when OPEC is left in shambles

lol how do you mean not that big?
cant you see how much money their making with it. the only thing is
that you need allot of money to invest other wise you've got nothing at all.

Oil industry is huge compared to most of the industries. Also the industry has connection with most of the sector which runs a country's economy. Recently the price of oil has increased a little which is a good news for most of the east Asian countries.

[jaysabi]

By markets, do you mean equity markets? The crude oil market has tanked with the above news.
Crude oil fell 7% before recovering slightly.
http://www.bbc.com/news/business-36070255

It will go down to sub-40 levels. The Saudis are making unreasonable demands. They want Iran to freeze the production. How this is possible? The Saudis have increased their output by almost 50% during the past 4-5 years. On the other hand, right now the Iranian production is less than their output during the pre-sanction era.

One thing that is interesting is to watch the Saudis and Iranians jockey for regional supremacy and use oil as a proxy front in their conflict. The longer they fight, the more damage they do to themselves.

Both are rich countries, I doubt they care what happens in the short term. They're playing chess while we'll playing checkers.

They have money right now, they'll have money later on. They aren't worried when they're only losing a few million per day and they have billions in reserve.

Except Saudi Arabia is running large deficits right now, and is actively reforming the government and cutting subsidies because they're worried about their reserves. They are worried. And rightly so.

[jaysabi]

Math is not idle talk. You are idle talk. Math is math. If you want to prove your point, take a projection and mathematically show why it is not accurate. Since you cannot do this, your further assertions that projections are idle talk is actually the only idle talk happening here.

Triple lol. Could you please be so kind as to first show how are you going to describe real world events with math? A theory of chances? Okay, but what will a possibility of a given long-term projection outcome (100 years, as you said) be if you take into account the possibilities of changes in the factors that may and will actually happen during that time span? Infinitesimal or just laughable? Let's get real, after all. And how on earth are you going to factor in the events which you can't even imagine (to happen), i.e. can't account for altogether, but which, nevertheless, do happen occasionally, and more often than not with devastating consequences, wtf?

Math is math, and it points a finger at you

Here's an overly simplistic example:

Known oil reserves: 6 trillion barrels.
Global oil consumption rate: 100 million barrels/day
Oil supply: 60,000 days, or 164 years.


Then apparently you say: that's dumb. But you provide no mathematical basis to contest it, yet you just keep saying the math is wrong because.

If you don't understand what a projection is or how to do math, then commenting on how useless projections are makes you look foolish. Now as I said, and you keep ignoring, a projection takes into account everything we know right now and includes likely material changes that could impact the estimate. It could change in either direction, or not at all. That's completely irrelevant. What matters is how long we project the oil supply to last, because that determines economic priorities in an oil-based global economy. How that number changes over time as we get new information is as important as the number itself because it indicates whether and how quickly things are deteriorating.

Go read a projection ffs. They give a baseline and then a range based on likely changes, in both directions, so that they're giving an overall range that's statistically viable. What's clear is you're completely unfamiliar with economic modeling, but you naively continue to sit there and say "nope" and base your assessment on nothing but ignorance, coupled with a steadfast refusal to learn.

[bryant.coleman]

More bad news for oil producing countries such as Saudi Arabia, Russia and Venezuela. Brent crude prices are down to $44.99 per barrel.

http://www.nasdaq.com/markets/crude-oil-brent.aspx

Increased production from Iraq neutralized the supply disruption from Libya and Nigeria. Once again prices of sub-30 USD per barrel are looking increasingly possible.

[deisik]

Math is not idle talk. You are idle talk. Math is math. If you want to prove your point, take a projection and mathematically show why it is not accurate. Since you cannot do this, your further assertions that projections are idle talk is actually the only idle talk happening here.

Triple lol. Could you please be so kind as to first show how are you going to describe real world events with math? A theory of chances? Okay, but what will a possibility of a given long-term projection outcome (100 years, as you said) be if you take into account the possibilities of changes in the factors that may and will actually happen during that time span? Infinitesimal or just laughable? Let's get real, after all. And how on earth are you going to factor in the events which you can't even imagine (to happen), i.e. can't account for altogether, but which, nevertheless, do happen occasionally, and more often than not with devastating consequences, wtf?

Math is math, and it points a finger at you

Here's an overly simplistic example:

Known oil reserves: 6 trillion barrels.
Global oil consumption rate: 100 million barrels/day
Oil supply: 60,000 days, or 164 years.

Such projections are as meaningless as misleading, math or no math

But you can't even be sure of the accuracy and consistency of the input parameters right now (otherwise we wouldn't see the price of oil galloping up and down). So this projection doesn't make much sense even from a mathematical (probabilistic) point of view

[deisik]

a projection takes into account everything we know right now and includes likely material changes that could impact the estimate. It could change in either direction, or not at all. That's completely irrelevant. What matters is how long we project the oil supply to last, because that determines economic priorities in an oil-based global economy. How that number changes over time as we get new information is as important as the number itself because it indicates whether and how quickly things are deteriorating

There are no "known oil reserves", to begin (or end up) with. These are not even estimates but guesses, and wild guesses at work I'd say. The top oil producer, the Saudi, is keeping their oil reserves numbers a top state secret. The same most certainly pertains to Russia, the Saudi's match and rival. Do you really think that the math of multiplying two numbers (as well as the use of pompous language and repetition of buzzwords) would somehow give more credibility to the result thereof?

What the fuck are you doing here, lol?

[bryant.coleman]

Except Saudi Arabia is running large deficits right now, and is actively reforming the government and cutting subsidies because they're worried about their reserves. They are worried. And rightly so.

The Saudis still have a few advantages. Aramco produces crude at very low cost. In some of the fields, the cost of production is as low as $2 per barrel. No other country is having this advantage. So even if the price drops to $45 per barrel, they will still be getting a healthy profit. If they control their spending, then everything will be OK.

[STT]

Oil supply: 60,000 days, or 164 years.


Then apparently you say: that's dumb. But you provide no mathematical basis to contest it, yet you just keep saying the math is wrong because.

Its all an estimate of course as we know for sure that world population will not be similar over 164 years.    It could vary greatly as it has over the previous 164 years so its hard to say how long oil will last even if we had a hard limit for amount available.    Much oil drilled is never extracted completely (or even close) as it becomes uneconomical, similar to how coal was taken from mines abandoned but later further mined as technology allowed closer mining and safer limits to how far they could expand

Nobodys dumb, in 164 years I expect we rely on oil less - just a guess!

[jaysabi]

a projection takes into account everything we know right now and includes likely material changes that could impact the estimate. It could change in either direction, or not at all. That's completely irrelevant. What matters is how long we project the oil supply to last, because that determines economic priorities in an oil-based global economy. How that number changes over time as we get new information is as important as the number itself because it indicates whether and how quickly things are deteriorating

There are no "known oil reserves", to begin (or end up) with. These are not even estimates but guesses, and wild guesses at work I'd say. The top oil producer, the Saudi, is keeping their oil reserves numbers a top state secret. The same most certainly pertains to Russia, the Saudi's match and rival. Do you really think that the math of multiplying two numbers (as well as the use of pompous language and repetition of buzzwords) would somehow give more credibility to the result thereof?

What the fuck are you doing here, lol?

A known oil reserve is oil we've found in the ground or countries have declared they have access to. So much for "top state secrets":  https://en.wikipedia.org/wiki/Oil_reserves#OPEC_countries  Quit being such an ignorant fuckwit already. I stopped reading everything you wrote after that because you've proven yourself unable to post anything worth reading.

[jaysabi]

Oil supply: 60,000 days, or 164 years.


Then apparently you say: that's dumb. But you provide no mathematical basis to contest it, yet you just keep saying the math is wrong because.

Its all an estimate of course as we know for sure that world population will not be similar over 164 years.    It could vary greatly as it has over the previous 164 years so its hard to say how long oil will last even if we had a hard limit for amount available.    Much oil drilled is never extracted completely (or even close) as it becomes uneconomical, similar to how coal was taken from mines abandoned but later further mined as technology allowed closer mining and safer limits to how far they could expand

Nobodys dumb, in 164 years I expect we rely on oil less - just a guess!

You missed the point. All the numbers in that example were completely made up to demonstrate how the math works in an overly simplified hypothetical, since some people in this thread have demonstrated an inability to understand simple math. Economic modeling is actually far more complex and takes into account a great number of variables and complex data sets. But it follows that if you can't understand simple math problems, you won't understand complex ones.

[jaysabi]

Except Saudi Arabia is running large deficits right now, and is actively reforming the government and cutting subsidies because they're worried about their reserves. They are worried. And rightly so.

The Saudis still have a few advantages. Aramco produces crude at very low cost. In some of the fields, the cost of production is as low as $2 per barrel. No other country is having this advantage. So even if the price drops to $45 per barrel, they will still be getting a healthy profit. If they control their spending, then everything will be OK.

I found this interesting: http://www.msn.com/en-us/news/world/saudi-arabia-ousts-longtime-oil-minister/ar-BBsKjIO?ocid=ansmsnnews11

Saudi Arabia has sacked their long term oil minister among a broader government reshuffling.

He has presided over a controversial strategy of keeping production levels high despite the drop in prices over the past two years in an effort to drive more expensive producers in the U.S. and elsewhere out of the market. That has led to a glut of supply.

At a talk in February in Houston, he stood by that strategy, arguing that cuts by lower-cost producers like Saudi Arabia would simply subsidize higher-cost ones.

...

Lower oil prices since mid-2014 pushed Saudi Arabia into a budget deficit of nearly $100 billion last year and a projected deficit this year of $87 billion. Despite efforts to limit reliance on its main export, oil accounted for more than 70 percent of the state's revenue in 2015.

Among the changes planned by Mohammed bin Salman and announced last month was a plan to publicly list less than five percent of Aramco to create a massive sovereign wealth fund to develop its cities.

...

The deputy crown prince put the estimated value of Aramco at more than $2 trillion.

The problem is they can't control spending to the point they need to. They are selling off a piece of Aramco to raise funds in light of their massive deficits and a need to transition the economy away from oil and not currently having the resources to do it.

[bryant.coleman]

I found this interesting: http://www.msn.com/en-us/news/world/saudi-arabia-ousts-longtime-oil-minister/ar-BBsKjIO?ocid=ansmsnnews11

Saudi Arabia has sacked their long term oil minister among a broader government reshuffling.

Obviously things didn't worked out the way they had hoped for. Most of the American shale oil producers are still there, pumping out the oil. Iran and Russia have also increased their daily output.

The problem is they can't control spending to the point they need to. They are selling off a piece of Aramco to raise funds in light of their massive deficits and a need to transition the economy away from oil and not currently having the resources to do it.

I have seen many articles in Bloomberg and Google Finance claiming that Aramco might be worth up to $3 trillion. I am quite skeptical about this. Rosneft produces about 4.5 million barrels a day, and still its market cap is only around $50 billion. What makes Aramco 100 times more expensive than Rosneft?

[deisik]

a projection takes into account everything we know right now and includes likely material changes that could impact the estimate. It could change in either direction, or not at all. That's completely irrelevant. What matters is how long we project the oil supply to last, because that determines economic priorities in an oil-based global economy. How that number changes over time as we get new information is as important as the number itself because it indicates whether and how quickly things are deteriorating

There are no "known oil reserves", to begin (or end up) with. These are not even estimates but guesses, and wild guesses at work I'd say. The top oil producer, the Saudi, is keeping their oil reserves numbers a top state secret. The same most certainly pertains to Russia, the Saudi's match and rival. Do you really think that the math of multiplying two numbers (as well as the use of pompous language and repetition of buzzwords) would somehow give more credibility to the result thereof?

What the fuck are you doing here, lol?

A known oil reserve is oil we've found in the ground or countries have declared they have access to. So much for "top state secrets":  https://en.wikipedia.org/wiki/Oil_reserves#OPEC_countries  Quit being such an ignorant fuckwit already. I stopped reading everything you wrote after that because you've proven yourself unable to post anything worth reading.

Do you understand this means that the notion is mostly useless for 'economic modelling' on a global scale? That for one group of people (which has access to one source of data) this number ('a known oil reserve', lol) will have one value, and for another group (which works with a different source) quite another? While a third think tank, most knowledgeable of all and having most reliable sources of information, will obviously refrain from making any projections at all (God forbid making a truthful one) and just keep silence, to retain their competitive edge and preserve obscurity...

I don't mind you posting nonsense (but welcome reading everything I write, wow) since you are cornering yourself further down and making a funnier fool of yourself with all your petty math (which is irrelevant)

[deisik]

I'm sorry but you turn out to be wrong not only in your conclusions, but in your premises too, wtf. Naturally, you could produce a correct result by offsetting one error with another, but you insist so much on the correctness of the math applied (as if it could fix things or let you get away, huh), so you really don't have any choice in this aspect. I mean the projection for one hundred years you mentioned, not your hypothetical example, of course (you won't get away with that either)

Which happens to be bullshit now, so we don't have to wait a hundred years to actually see that with our own eyes

[jaysabi]

You: there are no such things as known oil reserves.
You: Saudi Arabia doesn't disclose oil reserves because it's a "top state secret."

Ignoring the fact that your two premises directly contradict each other, I demonstrated both to be wrong, and yet you persist in posting garbage about how right you are. It's tired, and you haven't had an intelligent or thoughtful post in several weeks on the topic, so welcome to my block list. It's very sparse, but you've definitely earned it. I'll check back after awhile to see if you've improved the quality of your posts any to warrant unblocking, but I won't be engaging any more of your nonsense posts.

[jaysabi]

I found this interesting: http://www.msn.com/en-us/news/world/saudi-arabia-ousts-longtime-oil-minister/ar-BBsKjIO?ocid=ansmsnnews11

Saudi Arabia has sacked their long term oil minister among a broader government reshuffling.

Obviously things didn't worked out the way they had hoped for. Most of the American shale oil producers are still there, pumping out the oil. Iran and Russia have also increased their daily output.

The problem is they can't control spending to the point they need to. They are selling off a piece of Aramco to raise funds in light of their massive deficits and a need to transition the economy away from oil and not currently having the resources to do it.

I have seen many articles in Bloomberg and Google Finance claiming that Aramco might be worth up to $3 trillion. I am quite skeptical about this. Rosneft produces about 4.5 million barrels a day, and still its market cap is only around $50 billion. What makes Aramco 100 times more expensive than Rosneft?

Well, I think the value has less to do with how many bpd it produces and more to do with total assets. The oil reserves Aramco owns are where the 2-3 trillion dollar valuation would come from. When Aramco files an IPO, they will have to disclose with the SEC exactly what their reserves are in their S-1 statement, which will give investors a clear picture of the financial asshets of the company, and let everyone calculate for themselves what the valuation should be.

[jaysabi]

I found this interesting: http://www.msn.com/en-us/news/world/saudi-arabia-ousts-longtime-oil-minister/ar-BBsKjIO?ocid=ansmsnnews11

Saudi Arabia has sacked their long term oil minister among a broader government reshuffling.

Obviously things didn't worked out the way they had hoped for. Most of the American shale oil producers are still there, pumping out the oil. Iran and Russia have also increased their daily output.

The problem is they can't control spending to the point they need to. They are selling off a piece of Aramco to raise funds in light of their massive deficits and a need to transition the economy away from oil and not currently having the resources to do it.

I have seen many articles in Bloomberg and Google Finance claiming that Aramco might be worth up to $3 trillion. I am quite skeptical about this. Rosneft produces about 4.5 million barrels a day, and still its market cap is only around $50 billion. What makes Aramco 100 times more expensive than Rosneft?

Well, I think the value has less to do with how many bpd it produces and more to do with total assets. The oil reserves Aramco owns are where the 2-3 trillion dollar valuation would come from. When Aramco files an IPO, they will have to disclose with the SEC exactly what their reserves are in their S-1 statement, which will give investors a clear picture of the financial asshets of the company, and let everyone calculate for themselves what the valuation should be.

And also, if the company is only selling 5% of itself publicly, a 2 trillion dollar valuation would raise $100 billion dollars. That's a phenomenal asset to be able to monetize. From what I've read, the prince wants to use all the proceeds from the sale in the sovereign wealth fund, which will be used to help transform the economy from an oil-dependent one. Currently, 70% of GDP comes from oil production.

[deisik]

You: there are no such things as known oil reserves.
You: Saudi Arabia doesn't disclose oil reserves because it's a "top state secret."

Oh, now, in an effort to get away from the bullshit you posted about 100 years projections, you are switching from petty math to petty semantics, wtf? And even came up with threatening me with an ignore list?

I'm curious if you really think I care

[bryant.coleman]

Well, I think the value has less to do with how many bpd it produces and more to do with total assets. The oil reserves Aramco owns are where the 2-3 trillion dollar valuation would come from. When Aramco files an IPO, they will have to disclose with the SEC exactly what their reserves are in their S-1 statement, which will give investors a clear picture of the financial asshets of the company, and let everyone calculate for themselves what the valuation should be.

I am not sure whether the Saudis will be honest in their S-1 statement. I have seen varying figures, claiming anywhere from 50 billion barrels to 500 billion barrels. The Wikipedia claims the amount to be 260 billion barrels. At a rate of 11 million barrels per day, the reserves will last at least 65 years. But the question is whether petroleum will remain in use up to that date?

For comparison, Rosneft claims a total of 77.118 billion barrels (Proven + Probable + Possible Reserves), with another 193.196 billion barrels in Prospective Resources.