Paphos People

This is going to be interesting with Sturgeon and company, oil has been discovered near Shetland, rather than me explain please read the link.
https://www.commonspace.scot/articles/10643/largest-undeveloped-oil-field-discovered-west-shetland-isles

If link does not work copy and past into your browser, then press enter

World is currently awash with oil-how much you have is irrelevant, it's the price versus the cost of extraction that is the determinant of how "valuable" it is

This latest deep water find will is still worth exactly the same as any other oil - $50 per barrel. The extraction cost is probably at least $70 per barrel and the world is requiring less and less oil as it moves towards more and more renewables

found the new post in Paphos forum, I did expect to see new discovery in oil near Cyprus
but found it's again foreign discussion, nothing interesting to us

It's relevant in a round about sort of way- Cyprus' gas reserves are worth nothing like they were 2 years ago and to be basing a country's economic future on the price of fossil fuels is folly in the extreme in the current climate

Surely this is "fake news" . Those who wanted a No vote in the Scottish referendum were adamant that the oil was running out.

I don't think the price of oil today has any bearing on this discovery, it's what will the price be in six or seven years time. Technology has come on leaps and bounds since the beginning of the oil boom in the seventies and there is no need for the massive platforms built then. Can only benefit Scotland if they decide to go it alone. Must disagree with your comment on Cypriot Gas. BP are making massive investments in Gas production off Egypt and they are discussing piping the gas from the Aphrodite Field to the Idku LNG plants in Egypt so the market must be there for gas.

Jim

so, it not benefit for Cyprus and Paphos particularly ?!

A bit 'hopeful', JimB.
They cannot even afford to dismantle the decommissioned spent rigs which they already have !
There are many full tankers, cruising the seas, at present ... hoping for the barrel price to rise.

Every ocean and sea in the world has enormous fossil fuel reserves under it , and even mainland Europe and the US have enormous fossil fuel reserves now accessible through fracking.

I suspect the biggest reserves of oil in the world lie off the Falkland Islands, but there is not enough demand for it and even with improving extraction technology it might be worth zilch ?

Even Saudi Arabia is in trouble and despite having enormous reserves of the stuff( and the most accessible oil wells) realises that much of it might never be "realised" as technology changes- not the technology to get it out, but the technology that makes the stuff redundant

Venezuela has been in the news recently- it has the cheapest oil in the world and the biggest reserves (300 times more than the latest Shetland discovery) but at $50 per barrel it doesn't have pot to pee in

http://oilprice.com/Energy/Energy-Gener ... rther.html

I must bow to your superior knowledge, this LNG Plant and Gas Plant BP are having built in Egypt by the company I work for must be a figment of my imagination. BP are investing Big Time in Egypt for Oil and Gas and Chevron are investing 34 Billion Dollars in a new Oil Plant in Kazakhstan (that's billion). There is also major investment for new refineries in Indonesia plus major developments of both Oil and Petro-Chemicals in Abu Dhabi and Oman. These companies don't invest mega bucks to make a loss, they are not looking at tomorrows oil price but six or seven years ahead and that is why this find is positive for Scotland.

Jim

No problem with this so long as Scotland are going to stand the exploration and delivery costs, or whoever. So long as it's not UK. What's the bet Sturgeon will be whingeing about UK responsibilities/duties whatever towards Scotland. That's without the decommissioning of the existing oil fields off Scotland of course.

Whichever way it goes, she'll make sure it's not Scotlands problem!

Those countries have very little other trade to rely on.
So, what else could the try to sell ?
As regards Scotland ... They have just voted to request another referendum .... I don't rate their chances of that for a long time yet !

And it's in the shelf closest to the Shetlands (who voted to stay in the UK).

SFD
When you say these countries have very little else to trade on in most cases that's not true most have other commodities for instance minerals, coal, sunflower oil, caviar, cattle etc however oil and gas is the product most in demand hence the high prices.... At the moment there is a market value of around 50 $ a barrel most companies operate at 30 $ break even there has been drastic cuts in both manpower and salarys as much as 50% over the last 6 to 12 months ..but the big companies are now investing billions in the future having decided to concentrate on certain areas of potentials and not have their fingers in too many pies... Chevron , Shell, etc
As for the Shetlands well that's always been in dispute !!

I've a simple question to lowvoltage: why topic is so ambiguous ? Why not name it "Oil near Shetland" ?

There will of course be demand for fossil fuels in the future-it is how much they cost to get on stream and how much each government wants in revenues that will determine where the money is invested. That is why there is still huge investment in low cost areas such as Egypt and Kazakhstan desperate for petrodollars, and diddly squat currently in the North Sea (where production is falling and revenues are plummeting)

If Scotland is to ever become a viable independent country the first thing they have to do is use their tax raising and spending powers to produce a balanced budget- until then it's a pipe dream

Sergio, What is your problem, you come on here and moan you never have anything nice to say, but to answer your posts then please allow me to enlighten you.
1. It is of interest to the expats who still have a vested interest in their country, especially as Scotland has asked for a second referendum, this is a major issue regarding the financial issues in the UK as a whole and does warrant a debate amongst members.
2. Ambiguous thread OIL! well excuse me for not being perfect, got your juices going though did it not.
So at the point of repeating myself sorry for not being perfect

did I ask you to be "perfect" ?! it was mere an attempt to ask you make topic name less ambiguous

The Oil companies generally put the money up (or at least a large percentage ) and are given the Operators License. The Majors will be falling over themselves to get a piece of the action in Scotland; there has just been a major expansion at Sullom Voe so the Majors must be seeing something that Ilex and SFD are saying isn't there. As BMW said, the likes of Kazakhstan has a multitude of resources that make most countries look barren. So don't worry , the Majors will be beating a path to the Scottish Governments front door trying to see how they can help them extract the oil and it won't be the UK's oil it will be Scotland's if they get independence.

Jim

Perhaps you can give us a link to this "major expansion" at Sullom Voe ? the most recent article I can find about it is this (and I don't think improving the existing gas sweetening techniques is a sign of an upcoming boom-possibly more an expensive regulatory requirement ?)

http://www.bbc.com/news/uk-scotland-sco ... s-36496554

Much of the major companies activities in the Shetland Area were undertaken circa 2013 when oil was around $100 per barrel with no sign of it falling.I know some guys who were on paper billionaires then and have since sold their shares for buttons

https://www.oilandgaspeople.com/news/80 ... t-by-120m/

Kazakhstan also manufacture cigarettes .... but I can tell you that smokers do not like them .... I know !

They have lots of minerals etc, but most of their oil reserves are onshore, and getting oil out from the ground is a lot cheaper than drilling for it in an ocean

Per capita GDP is lower than Bulgaria, so operating costs will be far lower as well (and also less regulated)

Deepwater Horizon has put a lot of doubt about the future of deep water drilling in the more "advanced" countries , so it will NOT be a priority for the majors

it would be interesting to now news about oil mining by fracking method in USA...

Agreed.
But even with directional drilling, in the wilderness of a massive country, poses problems with delivery costs.

Online pipes are cheaper to build and maintain than underwater ones too - uglier, but cheaper

I understand that there are some problem areas which are susceptible to earthquakes, which could cause pollution.

The US is now the world's largest producer of oil of which more than half now comes from fracking- I don't believe the earthquake incidence has changed ?

As I know, some researcher claimed the method is invoke earthquakes in that areas

An earthquake is a major seismic shift cause by movement of the tectonic plates - a tremor is something you can get when a juggernaut passes your house.

I can believe that fracking could cause tremors, how it could shift the earth's tectonic plates I really have no idea

we are not going to dive into details of definition or classification, right ?

if there happened seismic activity , unusual activity for that regions and it begin after using the method, then why we should discuss plates' movement instead of thinking logically about future of people living there ?

I would suggest that millions of people may die as a result of emissions from the burning of hydrocarbons .

I doubt anyone has died as a result of a fracking induced "earthquake" and maybe/probably never will - if they can live with the effects of burning fossil fuels they can surely live with the effects of fracking for them ?

Ilex

Try

http://www.shetnews.co.uk/news/10552-wo ... ant-delays

My Pal was Construction Manager on the Project.

And Google Karabaton in Kazakhstan, a massive offshore development that is just starting to produce. I've seen it, I've flown over it. when travelling to Tengiz where the 34 Billion Dollar expansion is taking place.

Abu Dhabi, just recently left there after working at their massive Ruwais complex which is oil and Petro Chemicals and now in Egypt working on an LNG and Gas Plant. Didn't read about them in the papers.

I think the cigarettes come from Kyrgyzstan, not Kazakhstan

Jim

No one really knows what the price of oil is going to be in the future.

Last time Scotland had a referendum the oil resources lying off the Shetlands were already known about and oil was over $100 per barrel. The long term revenues from oil were “secure” and the exploitation of new fields feasible at that price- Scotland still voted to Remain in the Union

What will happen next time who knows- if oil is to play as big a part in the decision then il will have to be back to something like the same level, and that seems unlikely with the global glut of oil and the ever decreasing ability of OPEC to fix the market price

In the meantime at $50 per barrel the North Sea is in crisis, there will be no new investment in new Scottish fields (although projects already started and planned when the price of oil and gas was through the roof will have to be finished off and utilised) and oil revenues are currently projected to be in the region of £60 million per annum- that compares to 2008-2009 peak of £11.6 billion (which is the trifling little difference of £11.54 billion ) and leaves Scotland currently with a budget deficit of about £15 billion per annum

Developments in Kazakhstan and Egypt may rely on Scottish technology and the North Sea continues to produce oil, but they do not produce the revenues the Scottish government needs to balance it's books

ps it's Borat who comes from Kazakhstan and the project you outlined was completed at a £500 million loss for Petrofac- not figures normally associated with a booming industry, although granted that was down to Petrofac's incompetence and not Total's decision to build it ? The cost of it to the banks of it not being fully utilised will be included in that link I placed above

quick ps- Total obviously commissioned this when fossil fuels were much higher in value. Whether they would start it now given the current price is obviously debatable /doubtful) BP had the option of scaling back back at Sullom Voe, Total were already committed before the oil/gas price plummeted

Here's what Total's UK's Operation manager says about it's prospects (you may notice that their main concern is simply getting their investment repaid as much as making buckets of money)

"The investment boom was due to tail off after 2014. But it has fallen off a cliff, due to the fall in oil and gas prices.
Elisabeth Proust laughs wryly at the question of whether Laggan-Tormore would get the go-ahead now, suggesting the project might at least be "postponed a bit".

Will Total make a return on its investment at current gas prices? "We can, but it requires extremely good performance in production, and to be extremely strict on cost," she replies.


http://www.bbc.com/news/uk-scotland-sco ... s-35520575

I know where my cigarettes came from ....Kazakhstan !
Google ... Halliburton Kazakhstan.

http://www.shell.co.uk/sustainability/d ... ry2017.pdf

Interesting article on the decommissioning of the Brent field other companies such as BP are also preparing such programs.

On a side note Phillip Morris ltd have been producing and manufacturing tobacco products in RoK since buying out the Almaty Tobacco Company in 1994 Many of the tobacco farms are run by guest workers from Kyrgyzstan who grow tobacco in Kazakhstan. In December, when the tobacco they have grown is sold, they return to Kyrgyzstan to their families.

The point was not about the competency of Petrofac ( which those in the industry are aware of) but about whether there had been new developments in Sullom Voe and as the article showed, there has. Developments in Kazakhstan and Egypt have nothing to do with Scotland; you stated Kazakh Oil Reserves were located onshore and again I provided a name of one their major fields that is offshore as are those in Egypt, Giza, Fayoum, Taurus and Raven. You can keep talking the Scottish oil finds down but they are significant and as shown by the amount of development taking place the Major Oil Producers do not share the same negative outlook that you appear to have. I can recall oil falling to $16 a barrel when I was on the Forties though eventually the prices started climbing and as I keep repeating, technology has improved so much that the prices for producing a barrel of oil has also fallen dramatically.

Jim

SFD

I thought you were referring to the dodgy cigarettes, I know Marlboro are made there but never liked them anyway when I smoked but fortunately I managed to stop nine years ago.

Jim B quoted ;_ "I thought you were referring to the dodgy cigarettes, I know Marlboro are made there but never liked them anyway when I smoked but fortunately I managed to stop nine years ago."

No Jim ... They were a local Brand.

It appears to me that you are suggesting that oil companies do not care about the short term cost of oil and that the price of extraction in relation to cost is insignificant

You might think that to to the case, but I can assure you it's not and there are lot of business overdraft managers in the oil business who have very squeaky bottoms about their clients accounts after they factored in a price of $100 per barrel for their latest developments

Deep water exploration requires a minimum price of about $70 dollars a barrel to break even - at the current price they are losing at least $20 for every barrel they take out and there is no sign whatsoever that oil prices are going to rise. That's just a simple set of facts, nothing to do with my opinion

There is plenty of oil off the coast of Scotland, but it is to expensive to exploit and will not produce the necessary revenues at the current price - it's that simple

I'm not suggesting anything of the kind but I do know from conception to operating a refinery or LNG Plant it takes between five and seven years to completion. as I have stated and confirmed, these plants and Fields are being developed now, even with oil at the price it is; they have to plan ahead so the Oil Companies must have a positive outlook if they're investing that kind of money. You're talking as if everything happens overnight, well it doesn't and yes maybe today it maybe not be viable financially but in five or six years time it could quite possibly be very profitable.

Jim

I'll try and make this simple - the price of oil indeed goes up and down like a fiddlers elbow.

The technology that makes it cheaper to get out is available to every country in the world and the world can currently produce more oil than it can consume because of the technology - hence the low price (or is that too difficult to comprehend)

In Scotland's case what it needs is an oil price that enables sufficiently high levels of oil to be extracted at a price that enables it to levy the oil companies about £11.6 billion to plug the gaping hole in its budget. Without that revenue an independent Scotland has a budget deficit of about 15%, without the means or financial credibility to support it

Had Scotland voted for independence in 2014 on the basis of a continued oil price of circa $115 per barrel it would have been OK. As it turned out the first visiting dignitaries to Scotland had it become become independent would have been the IMF. That is still the case with oil at $50 per barrel.

Scotland does not have the breathing room to wait for volatile oil prices to rise to a level that suits them- it may be that oil prices will not rise in the foreseeable future. If that is the case the big oil companies will concentrate on developments where an oil price of $50 per barrel will enable them to make a profit (if only to enable them to pay the costs of the unviable fields the have invested in)

The $50 per barrel is not the price that makes Shetland in any way viable and leaves the North Sea marginal at best.Most of the current development was based on a 3 year period where oil ranged from $90-$150 per barrel. That is not typical and is unlikely to be repeated in the short to medium term -$50 is actually the long term "weighted" average

You don't have to make simple an industry I have worked in over the last 40 plus years. So I'll make it simple for you: Scotland don't have to find the money to develop these fields, the major oil companies will make that calculation and act accordingly. You are also only looking at Up Stream whereas most of the profit comes from Downstream Products and that is where the real money is made. Unfortunately your fixation with the price at the well is not allowing you to take into account the big picture and include the massive amounts of money to be made from Downstream Products. Why do you think all the Oil Producers are building their own Downstream Plants, because that's where the money is and there is nothing to stop these being built in Scotland.

Are you going to applaud that George?

Jim

There is nothing to stop them being built anywhere else either with less regulation and lower cost Kazakhstan and Egypt spring to mind

I'm sorry but you have just shown your complete ignorance of the Oil and Gas Industry. All the regulations and standards are to the same International specifications whether built in Kazakhstan, Egypt or Scotland and more than likely the Plants would be built much quicker with a highly skilled Scottish workforce. Operating costs once a plant is operating are negligible due to reductions in Operations staff and Multi-Tasking; Scotland are sitting on a pot of gold.

Jim

A highly skilled workforce like the Petrofac mob that built the Total plant ? If you think local labour in Kazakhstan is the same price and subject to the same labour laws as the equivalent in Scotland you are off your head

Speaking from experience again I see. The Labour Laws in Kazakhstan are very strict and the salaries in the industry are quite high these days and considering you have to employ double the amount of workers due to the limited amount of hours the locals can work then the costs are comparative, plus the very harsh climate conditions limit production though of course you know all that. Petrofac are a company from Sharjah and are known for undercutting the competition and I'm sure Total knew what they were doing when they awarded them the contract. Big losses are quite common in the industry, very little loss is caused by the actual workforce and more to do with materials and design changes; Scottish workers in general ARE highly skilled, especially their Engineers and Artisans and to try and rubbish them to try and score a political point , to my mind is very sad.

Jim

"Scottish workers in general ARE highly skilled, especially their Engineers and Artisans and to try and rubbish them to try and score a political point , to my mind is very sad."

Think you've missed the point there Jim, I'm pretty sure Ilex was saying quite the reverse.

I hold my hands up and say I know nothing about the oil industry, but I do know accounting and a little less about economics. I have no knowledge of your specific role in the oil industry but would guess it's neither accounting nor economics. Whilst I'm sure you're very skilled at what you do, I would guess that you work nearer the coal face as it were. Consequently I would be inclined to accept wholeheartedly what Ilex is saying. The coal face rarely understands the specifics of the accounts or economics and I do think that this really is the focus of the oil industry, particularly in Scotland at the moment.

Little I've seen outside of the wholly biased Scottish press gives much hope for Sturgeons pipe dreams of wealth for Scotland on the back of oil. As Ilex says, Scotland is in no position to play a waiting game, that £15b hole needs plugging, fast. Particularly if she's hoping to pull out of the UK. She has not managed the budget WITH the input from the UK, so just how is she going to manage it without that income??? Oil is not going to do that in the current climate. Whatever the future may hold for Scotland, and I emphasise MAY, it's not oil.

Someone in Scotland really, really needs to get to the bottom of Sturgeons economic aspirations.

I think it's you that is trying to prove the political point Jim

Fact of the matter is that for the last 30 years the world has been producing more and more oil and for the last 17 years the UK has been producing less (it's all here in those graphs)

http://peakoilbarrel.com/world-oil-year ... on-charts/

Aberdeen in particular has developed a hugely skilled and technologically advanced service industry that is employed to produce and develop the rest of the world's oil and increasingly less of the UK's (that's why so many based in Aberdeen are losing their jobs and local service companies are going bust)

The major players are not beating a path to Scotland because the exploration costs, labour costs and taxation regime are high- if that was not the case production would not be falling

They are taking Scottish experience and using it to make money for themselves in other areas of the world- they are not investing in Scottish oil and it's downstream products because there are more profitable alternatives elsewhere.

The majors do have a expensively developed UK base that they would indeed prefer to utilise locally and with oil at $130 a barrel Scottish deep water production was financially feasible- at $50 it is not

The SNP has embarked on an independence campaign for reasons of desperation and spite - to be trying to justify that by claiming Scotland is on the cusp of a an oil revenue boom when nothing of the sort is on the cards is preposterous and rather sad