Text 17079, 53 rader
Skriven 2011-04-19 15:38:04 av Robert Bashe (2:2448/44)
  Kommentar till text 17030 av Björn Felten (2:203/2)
Ärende: Oil prices and economics (was: Taxes)
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Björn Felten wrote to Robert Bashe on Monday April 18 2011 at 20:28:

RB>> _gross_ profit may be that high, but the _net_ profit after all
RB>> expenses of transportation from the wellhead to the terminal at
RB>> Rotterdam,

BF> That *is* what costs $4/brl. The oil out of the ground is supplied for
BF> free ($0/brl) by Mother Nature.

Jeez, maybe you'd better book a remedial course for people not ready for
Economics I. And oil wells drill themselves...

BF> The capital and other related investment costs were paid for in full
BF> circa 1960.

Bullshit. Oil wells don't run without maintenance and replacements for 30 years
(and many don't even produce that long). That was part of the problem, that
Saddam had simply neglected the infrastructure.

BF> The cost to pump it up and to the nearby harbour amounts to around
BF> $0.5/brl (labour, admin and maintenance costs). The rest is shipping
BF> costs.

"Nearby" harbor? Hey, you better check your geography. They use pipelines for
oil in Iraq too. But they cost real money.

BF> How much did *you* think it cost to ship a barrel of oil from Iraq to
BF> Rotterdam?

No idea, same as you. But it's not free, even though "mother nature" proivides
the ocean free of charge.

BF> And yes, of course the puppy regime that USA installed in Iraq is
BF> making a net profit too ($16/brl), but nowhere near the $80-100/brl
BF> that Halliburton was making.

You conveniently ignored everything else. The five years ran out in 2008-2009.
And the production in 2007 was miniscule even compared to Kuweit, where the
wells were torched by Saddam's people before they were forced out.

There's also the question as to what precisely the terms of the contracts were.
Tapping into a running well isn't that costly - although you have maintenance
and repairs, and even in Iraq an oil well doesn't produce forever (ever hear of
"depletion"?). But drilling a new one is very costly indeed. And depending on
the field, a well can run dry after as little as around 10 years.

You're ignoring so much to try to "prove" a point that doesn't exist anymore if
it ever did that all I can advise is to do your homework first the next time.

Cheers, Bob

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