Originally Posted by Gregs300CD
In April issues of The New York Times, the chief was revealed to have received such an extravagant bonus that even veteran industry observers were said to be shocked. While customers are chronically panicked about rising prices, Lee Raymond, who retired as CEO of ExxonMobil in December, was reported by the Times to have received the equivalent of $144,000 every day for 13 years. [New York Times, 4-15-06]
It costs less than $5 to produce a barrel of oil.
Shipping, on the other hand, is getting more expensive all the time.
And I said the THREAT of bad weather. Just like the THREAT of a missile. How long is your memory working for you? Seems not longer than a year.
About 30% of the offshore rigs in the Gulf of MX are still out of production following Katrina/Rita. Some of the rigs were completely swept away and all that the operators have to go on for rebuilding is a GPS position. Also, most of the offshore oil comes ashore in submarine and subterranean pipelines. These can be damaged by the heaving of the sea during the storm surge. All submarine damage is repaired manually by divers. There is not an unlimited number of divers so repairs wait for opportunity. Want a high paying job without the need for a diploma? Learn mixed gas diving. Learn how to use a NewtSuit. Instant job.
When a rig is abandoned, the crew shuts all the valves down to the well head. If the rig is undamaged it still takes a week or so to bring them online. If the pipelines are damaged, too then they have to be repaired or replaced. Many of the pipelines were damaged by Katrina/Rita. I understand that some rigs will not be back into production this year because of combined pipeline and rig damage.
We are about to enter a new hurricane season. Prognostications are to have a similar pattern as last year but with more storms going up the East coast.
The cost of a barrel of oil is mostly set by the cartel. They also receive most of the profits from the crude sale. Some companies like ARAMCO (Arab-American Oil Company) are majority locally-owned and slowly being turned-over to the locals at the upper and mid-management levels. But at the technical levels it is still mostly foreign technicians. ARAMCO is majority owned by KSA and they get the majority of profits.
To explore and drill a well inshore in the USA costs about $3-$5 M. Wells are being brought in about 1/7 times. If you have money to risk, it beats the hell out of online poker but you also better be able to take a hit because if the well doesn't come in (6/7 don't) your investment in that venture is wiped-out.