North Sea oil industry 'close to collapse'

[TA14]

RichTT said:

Hotels in Aberdeen are a prime example of this. Over the past 12 months I have spent many a night staying in hotels in Aberdeen. Either working ad-hoc in the office or prior to travel offshore. Finding a hotel room under £120 is rare. During periods of bad weather when hotels are fully booked we've seen crap holes that would normally barely be able to rent a room for £40-60 a night charging up to £350 ...

Sounds just like hoteliers in countries that host the world cup.

[mikerons88]

RichTT said:

The problem these days is also a lot to do with all the industries that support the oil companies.

You only have to see prices in Aberdeen and the attitudes of offshore companies to see how they are milking the industry for every single penny they can while times are good. Hotels in Aberdeen are a prime example of this. Over the past 12 months I have spent many a night staying in hotels in Aberdeen. Either working ad-hoc in the office or prior to travel offshore. Finding a hotel room under £120 is rare. During periods of bad weather when hotels are fully booked we've seen crap holes that would normally barely be able to rent a room for £40-60 a night charging up to £350 purely because they know the oil companies are paying.

I've seen first hand the attitude of some people offshore which is basically 'milk the company for as much as possible while doing as little as possible'. This is the attitude that changes profitability from $10 a bbl to $60 a bbl. You can barely place the blame solely on the large oil companies.

Welcome to the real world.

[SteveSteveson]

RichTT said:

I've seen first hand the attitude of some people offshore which is basically 'milk the company for as much as possible while doing as little as possible'. This is the attitude that changes profitability from $10 a bbl to $60 a bbl. You can barely place the blame solely on the large oil companies.

No, thats supply and demand. Same reason holidays are more expensive in summer and oil costs more when OPEC cuts production. Thats the way it works. If the oil companies reduce the business and stop using the hotels because they don't have the money prices will drop again. It's not milking the oil companies, it's economics. I'll feel sympathy for the oil companies being exposed to market forces when they stop selling oil the same way.

[DonkeyApple]

TA14 said:

DonkeyApple said:

Devil2575 said:

DonkeyApple said:

No it isn't. Simple as that. History from the dawn of money lending right up to today proves that irrevocably. End of, I'm afraid.

Back to the oil industry.

Sorry but that's rubbish. Just because they haven't historically been able too doesn't mean it isn't possible.

That is exactly what it means. What you are expecting is lovely and would be wonderful but it simply cannot be done.

I'm a little bit staggered that the lesson of 2008 and self regulation, or what Brown referred to as his 'light touch' has been so quickly forgotten!!!

I'm afraid that you are 100% incorrect. Morally it would be lovely but it's a dreamworld and a total failing to understand both human and crowd culture as well as ignore both recent and all history to try and put forward a belief that financial institutions or any group involved in any aspect of money can do so without regulation to protect the population.

I'm with Devil there. Just because it may not have been done in the last 5,000 years or so doesn't mean it can't be done although it does make it more than a little unlikely

Well I guess if humans are replaced by aliens then it's a possibility.

The simple fact that you are willing to discount all knowledge, understanding, evidence and proof is totally compelling. I'm in.

Let's remove all regulation and let everyone self police. Speaking of police, let's get rid of them as people will be able to self regulate.

now that we've solved 5000 years of usary issues let's get back to North Sea Oil and mocking the tts losing their jobs.

[mikerons88]

DonkeyApple said:

now that we've solved 5000 years of usary issues let's get back to North Sea Oil and mocking the tts losing their jobs.

There are plenty doing just fine

[RichTT]

SteveSteveson said:

No, thats supply and demand. Same reason holidays are more expensive in summer and oil costs more when OPEC cuts production. Thats the way it works. If the oil companies reduce the business and stop using the hotels because they don't have the money prices will drop again. It's not milking the oil companies, it's economics. I'll feel sympathy for the oil companies being exposed to market forces when they stop selling oil the same way.

It's blatant profiteering well beyond what could be defensible.

[jamieduff1981]

RichTT said:

SteveSteveson said:

No, thats supply and demand. Same reason holidays are more expensive in summer and oil costs more when OPEC cuts production. Thats the way it works. If the oil companies reduce the business and stop using the hotels because they don't have the money prices will drop again. It's not milking the oil companies, it's economics. I'll feel sympathy for the oil companies being exposed to market forces when they stop selling oil the same way.

It's blatant profiteering well beyond what could be defensible.

It is, but it's also spreading oil money far outwards into the community who then spend it paying brickies and joiners excessive rates to build conservatories or buying overpriced flashy cars to depreciate and sell on to people with less money. The very fact that individuals are not very good at hoarding the money means that a high percentage of people who do not work in the industry enjoy the benefits.

[J4CKO]

jamieduff1981 said:

RichTT said:

SteveSteveson said:

No, thats supply and demand. Same reason holidays are more expensive in summer and oil costs more when OPEC cuts production. Thats the way it works. If the oil companies reduce the business and stop using the hotels because they don't have the money prices will drop again. It's not milking the oil companies, it's economics. I'll feel sympathy for the oil companies being exposed to market forces when they stop selling oil the same way.

It's blatant profiteering well beyond what could be defensible.

It is, but it's also spreading oil money far outwards into the community who then spend it paying brickies and joiners excessive rates to build conservatories or buying overpriced flashy cars to depreciate and sell on to people with less money. The very fact that individuals are not very good at hoarding the money means that a high percentage of people who do not work in the industry enjoy the benefits.

Yeah, great point, spent a bit of time in Aberdeen and you could feel it was in a boom, everyone from taxi drivers, bar staff, lap dancers, waiters etc etc saw a little bit of what was coming in, especially hoteliers as mentioned, stayed in some very average hotels up there and was astounded at the bill.

I worked on projects where I offered to save money and was told JFDI, client is paying, so another knock on.

[DonkeyApple]

jamieduff1981 said:

RichTT said:

SteveSteveson said:

No, thats supply and demand. Same reason holidays are more expensive in summer and oil costs more when OPEC cuts production. Thats the way it works. If the oil companies reduce the business and stop using the hotels because they don't have the money prices will drop again. It's not milking the oil companies, it's economics. I'll feel sympathy for the oil companies being exposed to market forces when they stop selling oil the same way.

It's blatant profiteering well beyond what could be defensible.

It is, but it's also spreading oil money far outwards into the community who then spend it paying brickies and joiners excessive rates to build conservatories or buying overpriced flashy cars to depreciate and sell on to people with less money. The very fact that individuals are not very good at hoarding the money means that a high percentage of people who do not work in the industry enjoy the benefits.

Yup. When the woman in the new white Range Rover is sprayed orange by another woman who has a new white Range Rover then you can see this effect all too clearly.

And then there are people like me who live in the South yet a good chunk of my company income comes from selling broking services to people in Aberdeen.

[MissChief]

So wouldn't it be cheaper in the long run for these companies to actually rent a house or houses for less than a week in said Hotel?

[jamieduff1981]

Probably not, because all that would do would be to put more pressure on the house rental market thus affecting prices, and the houses would need housekeeping personnel paid to look after them - thus basically putting you back to what the definition of a hotel.

[MissChief]

But wouldn't it still be cheaper than paying for a hotel room at £250+ a night when you could even pay £1.5k for a month for a house. Hire a part time cleaner to visit once a day and it would be several times cheaper than paying for multiple hotel rooms.

[rossub]

MissChief said:

So wouldn't it be cheaper in the long run for these companies to actually rent a house or houses for less than a week in said Hotel?

There are hundreds of properties in the Aberdeen area owned or rented by oil related companies, so yes in a lot of cases it is.

A 1 bed flat in a half decent area will set you back £700 pcm or about £150k. Finding a property for less than £500 pcm in Aberdeen is not really possible.

[mikerons88]

rossub said:

There are hundreds of properties in the Aberdeen area owned or rented by oil related companies, so yes in a lot of cases it is.

A 1 bed flat in a half decent area will set you back £700 pcm or about £150k. Finding a property for less than £500 pcm in Aberdeen is not really possible.

Indeed. House across road from us is rented out at >4k / month by a company (we are not in a very expensive property).

[DonkeyApple]

MissChief said:

So wouldn't it be cheaper in the long run for these companies to actually rent a house or houses for less than a week in said Hotel?

They do. Lots of corporate rentals for contractors and expats. But market forces still make hotels cheaper for many purposes.

[DonkeyApple]

MissChief said:

But wouldn't it still be cheaper than paying for a hotel room at £250+ a night when you could even pay £1.5k for a month for a house. Hire a part time cleaner to visit once a day and it would be several times cheaper than paying for multiple hotel rooms.

However, you'd then have to pay that contractor a higher rate to compensate for the fact that he'll be living self catered, with others as if he was still a 19 year old student instead of a market professional who's peers are all being treated with a bit more respect and put up in hotels.

[RichTT]

Not sure where you're living mate. Prices have fallen pretty drastically in the last quarter of the year.

https://www.gov.uk/government/statistical-data-set...

Margins on petrol have dropped by 23% since start of the year and on Diesel by 22%. Duty has remained constant at 57.95 pence per litre yet prices continue to fall.



This is pump price per litre through the year.

[DonkeyApple]

hora said:

So if the barrel prices are collapsing why aren't Bp, Shell etc collapsing their pump prices?

Well they have. About 20p has come off since the more recent peak.

Don't forget that that most of the price of a litre is tax followed by refining and delivery cost (inc forward hedging) and then you get towards the much smaller bit which is the actual cost of the raw material.

The crude rule of thumb is that per litre, 60% is tax to govt and 30% is oil company revenue.

So, when fuel was 130p about 45p was fuel cost. The 20p drop comes out of that 45p plus the fall in the VAT element as its a %.

So in short the oil companies are passing on the savings as vending petrol is actually a competitive market. But I'm sure that we can blame them, the banks, terrorists or immigrants somehow instead of looking at the real data and seeing why out fuel is really the price it is.