Article

2014-10-18 Caribbean-Latin America

Oil prices free fall: Why Venezuela stands to lose the most

Archived material is restricted to Rantburg regulars and members. If you need access email fred.pruitt=at=gmail.com with your nick to be added to the members list. There is no charge to join Rantburg as a member.

Posted by Fred 2014-10-18 00:00|| || Front Page|| [11127 views ] Top

#1 No worries for any of them as the margins are still there:
Saudi Arabian crude is the cheapest in the world to extract
because of its location near the surface of the desert and the
size of the fields, which allow economies of scale.
The operating cost (stripping out capital expenditure) of
extracting a barrel in Saudi Arabia has been estimated to be
around $1-$2, and the total cost (including capital expenditure)
$4-$6 a barrel.
In Venezuela, where fields tend to be mature and small and
it is difficult to make new discoveries, production costs were
generally estimated at $20 a barrel (operating and capital
costs).
Those figures do not include the more expensive Orinoco oil
from the country's sand deposits.
One analyst said the extraction of one barrel of Orinoco was
around $30 (operating and capital costs).

Posted by Airandee 2014-10-18 07:54|| 2014-10-18 07:54|| Front Page Top

#2 The problem is Venezuela's production infrastructure is breaking down, and no one will sell anything to them except cash in advance. Mainly because they have a history of not paying.
On the up side, now they can give Cuba all the oil they want.

Posted by ed in texas 2014-10-18 08:02|| 2014-10-18 08:02|| Front Page Top

#3 ..yep, the barter market, oil for 'security personnel'. Works.

Posted by Procopius2k 2014-10-18 08:49|| 2014-10-18 08:49|| Front Page Top

#4 plus - haven't they already promised a lotta cut-rate oil to Cuba and China?

Posted by Frank G on the road 2014-10-18 10:48|| 2014-10-18 10:48|| Front Page Top

#5 Only about 4 percent of U.S. shale oil production needs prices above $80 for drillers to break even, the International Energy Agency said today in its monthly oil market report. Producers are getting more oil per dollar spent drilling, driving costs down as much as $30 a barrel since 2012, Morgan Stanley (MS) analyst Adam Longson said in a report yesterday.

"Prices aren't low enough to put these projects at risk," Matthew Jurecky, head of oil and gas research for the London-based research company GlobalData Ltd., said by e-mail today from New York. "The profit margin on most commercial unconventional oil plays will support prices as low as $50, many below that even."

From U.S. Shale Oil Output Seen Growing Even as Prices Drop

Posted by Woozle Glereng6363 2014-10-18 13:59|| 2014-10-18 13:59|| Front Page Top

#6 Yes Frank. 100k plus barrels/day to Cuba in exchange for doctors, security expertise and socialist solidarity. Petro Caribe gets a smaller amount on give away terms. China is due over 400k barrels/day in return for loans, the proceeds of which have already been spent. Venezuela also uses 765K barrels of refined transportation fuel per day, essentially giving it away. So not so much to export for cash as ustabe.

Posted by Shipman 2014-10-18 14:05|| 2014-10-18 14:05|| Front Page Top

23:33 anon1
21:07 Anguper Hupomosing9418
20:20 BrerRabbit
20:08 BrerRabbit
19:51 Steve White
19:25 Pappy
19:19 Pappy
19:07 SteveS
18:52 Pappy
18:52 KBK
18:40 trailing wife
18:35 trailing wife
18:34 trailing wife
18:09 Grunter
18:08 Woozle Glereng6363
17:52 Rupert Bonaparte7124
17:31 irishrageboy
17:28 phil_b
17:03 Jumbo Clase4730
16:58 Jumbo Clase4730
16:58 Ebbomosh Hupemp2664
16:57 OldSpook
16:56 OldSpook
16:54 OldSpook