"Upstream costs and the price of oil Upstream costs"
Upstream costs and the price of oil Upstream costs and the price of oil Oil costs are regarded by many commentators as the principal reason for the surge in oil prices seen over the last few years.The CGES study Upstream costs and the price of oil tests the validity of this claim by investigating the cost of oil production around the world and the relationship between costs and oil prices. Are oil costs behind the rise in oil prices? The study draws upon: How will this study benefit you? The research for this study shows that even • an exhaustive search of key data sources Upstream costs and the price of oil will the most expensive oil in the most hostile of • the CGES’ own extensive data banks help you dissect the cost of oil production environments cannot justify oil prices anywhere • data covering the last 20-30 years globally and the relationship between costs near the levels reached in 2008.This indicates and high oil prices. A thorough and up-to-date This provides you with an impressive set that high oil prices are not cost-related. Order knowledge of oil costs is essential to good of statistics of oil costs around the world. your copy of Upstream costs and the price decision-making in the oil and gas business of oil to see the statistics and expert analysis and among those who invest in or lend to it. The well-researched examination of oil costs that lead to this conclusion. and their evolution over time presented in Upstream costs and the price of oil will Who will benefit from this study? Finding, development and operating costs for help you define the floor price of oil in the onshore and offshore oilfields in most areas • Upstream Oil Companies longer term and offers a series of benchmarks of the world are compared and contrasted, • Oil Service Companies for oil producers in various parts of the world, and the current levels of such costs are set allowing you to compare your costs with • Integrated Oil Companies against previous levels, providing you with a average costs in the country or region in • National Oil Companies clear picture of the evolution of costs over which you operate. • Banks time.The study also examines investment intensities in different areas and from such • Hedge Funds intensities derives fully-built-up costs per • Pension Funds barrel, offering you an alternative evaluation • Governments of oil costs. • Speculators and Investors Available in CD, pdf or printed format Contents Executive Summary List of Tables Figure 3 – Monthly (2004 - July 2008) drilling rig count world (excl FSU & on land China) and the price of oil Oil production costs today Table 1 – Recent estimates of unit production costs • Defining ‘production cost’ (dollars per barrel) Figure 4 – Current & medium-term ‘cost of crude • Searching for and compiling information on costs oil supply’ curve Table 2 – Decrease (actual & forecast) in unit costs • Recent estimates suggest oil production costs are Figure 5 – USA: monthly drilling rig count and the (dollars per barrel) in the 1980s, 1990s and early 2000s not too high price of oil (1978-1988) Table 3 – Increase (actual & forecast) in unit costs The oil industry experienced decades (dollars per barrel) – development plus operating when Figure 6 – USA: monthly drilling rig count and the of reduction in the cost of production not specified – in the 1980s, 1990s and early 2000s price of oil (1994-2004) Oil production costs and the value of Table 4 – Increase in other reported costs (recent years) Figure 7 – International: monthly drilling rig count subsurface reserves have increased, and the price of oil (1978-1988) Table 5 – Increase (actual & forecast) in cost of drilling especially in recent years wells and other services & materials Figure 8 – International: monthly drilling rig count Rise in the cost of oil field services and the price of oil (1996-2004) Table 6 – Computing unit production costs from • Rising daily rates for drilling rigs investment intensities using decline rates of 5%, 7.5%, Appendices 10% and 15% (with 10% for discount rate and 5% for Investment intensity in oil and gas projects calculating operating cost) Appendix 1 – Some reported estimates of unit costs Estimating unit production costs from per barrel (for different countries, regions and years) Table 7 – World crude oil production and its costs investment intensities Appendix 2 – Some reported estimates of unit cost (development plus operating) • The investment intensities changes over time (costs per barrel) • The computed unit cost Table 8 – Decrease (actual & forecast) in the cost of drilling wells and other services & materials Appendix 3 – Some reported estimates of changes A cost of supply curve for world crude oil in upstream cost indices, costs of drilling rigs, daily List of Figures rates for rigs and various other services & materials Signs of slackening in oil field services market Figure 1 – Price of oil (Dated Brent, 2003 Appendix 4 – Some estimates of investment intensity Rise in the cost of services follows the rise – October 2008) (dollars/peak daily barrel or barrel oil equivalent) - in the price of oil and not vice versa various countries and regions (for different years) Figure 2 – Monthly (2004-July 2008) drilling rig Putting the cart before the horse count world (excl US, Canada, FSU & on land China) Appendix 5 – Unit costs computed from and the price of oil investment intensities Abbreviations and Acronyms CGES Order Form Founded in 1990 by Sheikh Upstream costs and the price of oil Ahmed Zaki Yamani, the Please indicate quantity and format in the appropriate boxes: Centre for Global Energy Studies is a leading forecasting organisation, specialising in the CD Price £950 PDF Price £950 Printed Price £950 Multiple Users £2,250 analysis of the oil market and the economics and politics of energy.The CGES is well Details Name known for the high quality of its in-depth studies, which are Position based on thorough research Company and are written by experts in their fields.The CGES’ Address particular expertise lies in the analysis of oil markets, OPEC Postcode policy, oil, gas, politics and economics of the Middle Telephone Fax East, the FSU,West Africa, E-mail Venezuela and the North Sea. The Centre also offers advice and consultancy, undertakes Payment Credit Card Cheque Invoice US Invoice special projects for clients, I enclose a cheque payable to Please issue an invoice Please issue an invoice Centre for Global Energy Studies containing full bank details in US dollars publishes regular publications available by subscription and holds energy-related events. Credit Card No. Expiry Date Card Type Security Code (Required for Visa and Mastercard only) Author : Dr Manouchehr Takin Signature Date Dr.Takin is the Senior Petroleum Upstream Analyst at CGES. He is a Cambridge PhD who worked for VAT No. (EU clients) 16 years in oil industry operations with the Iranian Oil Consortium, Delivery Method Please note that we will send your order by Royal Mail within the UK and by airmail for overseas the Geological Survey, Amoco orders unless a courier is requested.The courier will be an additional charge. International, Ultramar (Exploration Manager) and NIOC (acting head Please send my order by courier E & P Research). He worked for nine years on the international aspects of How to Order energy and oil as a senior researcher Telephone: +44 (0)20 7309 3610/3612/5657 at OPEC in Vienna and has been with the CGES in London since 1990. Fax: +44 (0)20 7235 4338 E-mail: firstname.lastname@example.org Directed by: Dr Leo Drollas Website: www.cges.co.uk Post: Marketing Department, Centre for Global Energy Studies, 17 Knightsbridge, London, SW1X 7LY, UK www.cges.co.uk