North Sea oil industry 'close to collapse'
Discussion
DJFish said:
Welshbeef said:
Bizarre comments about money being blown on Fast Audis etc.
Where has all the profits gone? Well its been returned to its investors - mainly UK pension funds over the years along with massive taxes added when oil prices rocketed which is paying for the public sector NHS etc.
The individuals who worked on it are highly skilled individuals who are also willing to work in dangerous places away from family for long periods of time. Individually those who lose a job will likely move to other engineering areas which will add competition - and in so doing badly damage the locality in Scotland where they lose the tax but also the spend they would make to support local businesses.
To me a number on here seem to be of the ilk oh they earned a lot big deal .... Shame
Precisely.Where has all the profits gone? Well its been returned to its investors - mainly UK pension funds over the years along with massive taxes added when oil prices rocketed which is paying for the public sector NHS etc.
The individuals who worked on it are highly skilled individuals who are also willing to work in dangerous places away from family for long periods of time. Individually those who lose a job will likely move to other engineering areas which will add competition - and in so doing badly damage the locality in Scotland where they lose the tax but also the spend they would make to support local businesses.
To me a number on here seem to be of the ilk oh they earned a lot big deal .... Shame
There are, at this moment, many such individuals sitting out in the North Sea in a severe gale 9,(and one or two in comfortable air conditioned shoreside offices
) keeping the oil & gas flowing which in turn is keeping your houses nice & warm while you sleep and look forward to spending Christmas with your families.The oil companies are businesses just like any other, they're not going to do what they do if it's not worth their while & neither are the guys who work for them.
Edited by DJFish on Friday 19th December 05:51
So, for example, from Aberdeen they run fields in Nigeria. Now we can all imagine that Nigeria has been using oil receipts to pay down the Islamic insurgency. With oil falling hard they will be s
tting themselves as the next thing to come will be a massive step up in the slaughtering of children and families as the lions make their play for govt. Look to most of the areas that people who live in Aberdeen tend to work out of and people will realise that most of the time they are third world s
t holes. Who fancies working in Libya or Pakistan borders? Or sitting on a plane out of West Africa pondering the pleasures of Ebola?
The malice and anger shown by an ever growing number of brain washed, under educated, non entities on PH is depressing. The irony being that while they froth, as instructed to do by their mind controlling media gods over a few people who earn more than them and are part of the two single largest economies of Britain that are part of a system that underwrite their pitiful existence, they are being fed this hatred and bile by the one industry that has never paid full tax.
So to all the angry people out there, just remember that you are angry or envious because you are either a) thick b) lazy c) under educated d) have childhood issues from the dark.
I find the resentment of people to 'oil companies' making large amounts of money quiet interesting. To people who are bothered by the money the oil industry makes, try investigating what percentage of the sale price of oil or gas is profit to the oil company. Now compare that to the percentage of the sale price of goods in high street shops that is profit - Tesco/Morrisons/John Lewis/Next... take your pic. Oil companies make big money because they sell a commodity in enormous volume. If you are selling a commodity in a massive quantity and aren't making money then I'd be more concerned! And think how much tax the industry brings in.
On a side note, to those who voted yes in the Scottish referendum, do you now realise that when the better together campaign pointed out that basing Scotland's future oil revenues on a price of 133/barrel was idiotic, they were not 'scaremongering' but making quite a sensible point. Current price $59.4.
On a side note, to those who voted yes in the Scottish referendum, do you now realise that when the better together campaign pointed out that basing Scotland's future oil revenues on a price of 133/barrel was idiotic, they were not 'scaremongering' but making quite a sensible point. Current price $59.4.
Gandahar said:
I'm sure a lot of Scottish farmers / crofters will feel sorry for them having to live in central heated off shore installations whilst they have the day long smell of wet sheep for only 1/4 the pay 
I've not been on a rig floor yet that's been central heated, apart from perhaps by a flare boom. Try pissing down with rain or -20 with windchill. I suggest educating yourself before assuming that we all sit in some sort of luxury office complex that just happens to be offshore. Gandahar said:
Like the bankers they get the rewards for the good times and then complain when the bad times are. Even the ex-head of BP admitted they under-invest in the lean periods so it causes problems at later times.
I'm sure a lot of Scottish farmers / crofters will feel sorry for them having to live in central heated off shore installations whilst they have the day long smell of wet sheep for only 1/4 the pay
Have you not heard how much farmers complain whenever wheat prices change (depending on which type of farming)? All businesses do it, small or large, not just banks and oil. Good businesses invest, save and survive, bad ones wither in hard times.I'm sure a lot of Scottish farmers / crofters will feel sorry for them having to live in central heated off shore installations whilst they have the day long smell of wet sheep for only 1/4 the pay
SteveSteveson said:
Have you not heard how much farmers complain whenever wheat prices change (depending on which type of farming)? All businesses do it, small or large, not just banks and oil. Good businesses invest, save and survive, bad ones wither in hard times.
Yup and interestingly I was drinking with a few local farmers last week and one was explaining to me how the low gas price was having a big knock on effect to the price he get for some of his cereal crops and he had fields that were now losing him money because of it. I'll be honest and say that I didn't follow the whole link when he explained but I had consumed rather a lot of gin by then 
RichTT said:
Gandahar said:
I'm sure a lot of Scottish farmers / crofters will feel sorry for them having to live in central heated off shore installations whilst they have the day long smell of wet sheep for only 1/4 the pay
I've not been on a rig floor yet that's been central heated, apart from perhaps by a flare boom. Try pissing down with rain or -20 with windchill. I suggest educating yourself before assuming that we all sit in some sort of luxury office complex that just happens to be offshore. DonkeyApple said:
Don't forget that Aberdeen is less and less about North Sea production. It's one of the global oil hubs (although the only one not linked by a 747 airport so will die within years of North Sea production falling below a productive level) and as a hub it is linked to other key production zones.
So, for example, from Aberdeen they run fields in Nigeria. Now we can all imagine that Nigeria has been using oil receipts to pay down the Islamic insurgency. With oil falling hard they will be stting themselves as the next thing to come will be a massive step up in the slaughtering of children and families as the lions make their play for govt.
Look to most of the areas that people who live in Aberdeen tend to work out of and people will realise that most of the time they are third world st holes.
Who fancies working in Libya or Pakistan borders? Or sitting on a plane out of West Africa pondering the pleasures of Ebola?
The malice and anger shown by an ever growing number of brain washed, under educated, non entities on PH is depressing. The irony being that while they froth, as instructed to do by their mind controlling media gods over a few people who earn more than them and are part of the two single largest economies of Britain that are part of a system that underwrite their pitiful existence, they are being fed this hatred and bile by the one industry that has never paid full tax.
So to all the angry people out there, just remember that you are angry or envious because you are either a) thick b) lazy c) under educated d) have childhood issues from the dark.
I'm normally one of the first to roll my eyes at politics of envy, but the problem *you* perhaps have to appreciate is a lot of the have-not's haven't successfully partaken in the economic boom, either todays or the last, in fact they've suffered the "effect of success"- high house prices, oil prices etc while their wages have stagnated for ages leading to a real term drop in social standards for many. So to come on here and read the tragedy that oil prices dipping below the stratosphere is a burden we must all fear at risk of being denigrated "stupid" does make the apparent imminent popping of your little bubble something quite enticing.So, for example, from Aberdeen they run fields in Nigeria. Now we can all imagine that Nigeria has been using oil receipts to pay down the Islamic insurgency. With oil falling hard they will be s
tting themselves as the next thing to come will be a massive step up in the slaughtering of children and families as the lions make their play for govt. Look to most of the areas that people who live in Aberdeen tend to work out of and people will realise that most of the time they are third world s
t holes. Who fancies working in Libya or Pakistan borders? Or sitting on a plane out of West Africa pondering the pleasures of Ebola?
The malice and anger shown by an ever growing number of brain washed, under educated, non entities on PH is depressing. The irony being that while they froth, as instructed to do by their mind controlling media gods over a few people who earn more than them and are part of the two single largest economies of Britain that are part of a system that underwrite their pitiful existence, they are being fed this hatred and bile by the one industry that has never paid full tax.
So to all the angry people out there, just remember that you are angry or envious because you are either a) thick b) lazy c) under educated d) have childhood issues from the dark.
anonymous said:
[redacted]
No they aren't, at least in the case of onshore skilled workers like geophysicists. As I said before a significant number of them are bailing out of overtaxed and expensive locations like the UK and heading for places like Malaysia.
Unfairly tax an industry and as others have said your revenue drops to nothing.
hairyben said:
DonkeyApple said:
Don't forget that Aberdeen is less and less about North Sea production. It's one of the global oil hubs (although the only one not linked by a 747 airport so will die within years of North Sea production falling below a productive level) and as a hub it is linked to other key production zones.
So, for example, from Aberdeen they run fields in Nigeria. Now we can all imagine that Nigeria has been using oil receipts to pay down the Islamic insurgency. With oil falling hard they will be stting themselves as the next thing to come will be a massive step up in the slaughtering of children and families as the lions make their play for govt.
Look to most of the areas that people who live in Aberdeen tend to work out of and people will realise that most of the time they are third world st holes.
Who fancies working in Libya or Pakistan borders? Or sitting on a plane out of West Africa pondering the pleasures of Ebola?
The malice and anger shown by an ever growing number of brain washed, under educated, non entities on PH is depressing. The irony being that while they froth, as instructed to do by their mind controlling media gods over a few people who earn more than them and are part of the two single largest economies of Britain that are part of a system that underwrite their pitiful existence, they are being fed this hatred and bile by the one industry that has never paid full tax.
So to all the angry people out there, just remember that you are angry or envious because you are either a) thick b) lazy c) under educated d) have childhood issues from the dark.
I'm normally one of the first to roll my eyes at politics of envy, but the problem *you* perhaps have to appreciate is a lot of the have-not's haven't successfully partaken in the economic boom, either todays or the last, in fact they've suffered the "effect of success"- high house prices, oil prices etc while their wages have stagnated for ages leading to a real term drop in social standards for many. So to come on here and read the tragedy that oil prices dipping below the stratosphere is a burden we must all fear at risk of being denigrated "stupid" does make the apparent imminent popping of your little bubble something quite enticing.So, for example, from Aberdeen they run fields in Nigeria. Now we can all imagine that Nigeria has been using oil receipts to pay down the Islamic insurgency. With oil falling hard they will be s
tting themselves as the next thing to come will be a massive step up in the slaughtering of children and families as the lions make their play for govt. Look to most of the areas that people who live in Aberdeen tend to work out of and people will realise that most of the time they are third world s
t holes. Who fancies working in Libya or Pakistan borders? Or sitting on a plane out of West Africa pondering the pleasures of Ebola?
The malice and anger shown by an ever growing number of brain washed, under educated, non entities on PH is depressing. The irony being that while they froth, as instructed to do by their mind controlling media gods over a few people who earn more than them and are part of the two single largest economies of Britain that are part of a system that underwrite their pitiful existence, they are being fed this hatred and bile by the one industry that has never paid full tax.
So to all the angry people out there, just remember that you are angry or envious because you are either a) thick b) lazy c) under educated d) have childhood issues from the dark.
I see nothing but ill in the deregulation of debt that has created the cost of living crisis.
Attacking those on the other side however is the act of the foolish and hardly warrants any respect or sympathy. Bitterness is a horrible affliction that curses many of the mindless Britons who are slaves to the media industry and the drivel they spew.
When you have idiots bleating about crofters then you can see how farcical it has become amongst little britons.
There is nothing positive, pleasant of dignified in revelling in others' misfortunes.
I work in the offshore oil industry, and have done since 1981. I started out as a painter and cleaner, and considered that my salary then was pretty good. I thought that I would do this for a couple of years before going back onshore for a "proper job".
To put this in perspective, I was a graduate with an engineering degree, with very few jobs on offer onshore, and on the advice of an old family friend, and his connections, took a job on an exploration rig. My fellow graduates, in 1980, who had gone straight in to jobs with British Leyland, Vauxhall and Ford, were earning around £2000 to £3000 p.a. This was the time when the motor industry had been doing very well, in 1979, followed by a period of near collapse after 1981.
My starting salary in 1981 was around £8000 p.a. This was monumental in comparison to my graduate chums, but it only lasted 6 weeks, as I got promoted, and was now on £9000 p.a. Oh dear, two days later I was promoted again, to roughneck, and was suddenly on £10,000 p.a. and getting a "proper job" onshore went out the window.
This was great stuff. This huge salary, effectively 6 months vacation a year, 23 years old. What's not to like? This was still a relatively "frontiersman" type of job, the girls thought that we were all hard men, we got to commute by helicopter, and were well fed. Yes, the conditions were tough, especially when the weather got bad. I was on an exploration rig, a semi-submersible, that rolled about quite badly in rough weather, and in those days if you couldn't read, time off was pretty dull. No phones, no internet, no satellite TV. 3 movies a week delivered by chopper, on reels of film, and a table tennis table. If we were watching the movie, the table tennis had to stop, as it was in the same room.
At the end of the day, if you didn't like it, you quit. I certainly went in to the job with my eyes open, and knew that I had to man up pretty quickly.
By 1984, I was a derrickman, and earning good money. I got married in 1985, bought a house, then saw the collapse of the price of oil and by 1986 I found myself redundant, with no income, a mortgage and a young wife to impress.
After a period working in South Africa, I came back to the industry in 1987. I managed to get the same job, but now with a 25% pay cut, and all of the little benefits that we had had removed. It was a bit of a struggle, but with a change of job in 1988 to Drilling Fluids Engineer, I regained some of my faith in the industry. I managed to weather the next couple of potential crises, when others were laid off, and still consider it to be well paid.
However, things are not as rosy as most of you seem to think. The Hollywood salaries of the early 1980's disappeared after the first crisis in 1985. If I was earning today what a similar engineer was earning in 1984, my pay would be 3 times higher than it is. I'm not complaining, I have roof over my head, I can feed myself, and I have a good life/work balance. I am, however, getting on in years, and while I might be a little annoyed at being made redundant now, I have managed to put something aside for this particular rainy day. That can't be said for the younger employees, who will suffer for what appears to be a drop in prices brought about by world politics, well out of their control.
If I were them, I wouldn't be complaining about pay cuts. Better to keep their jobs than lose them altogether. It's not as tough out there as it used to be, but it's still tough, and it's the exploration guys at the sharp end that will get shafted first. They are costing money, not generating it. The production boys will carry on, possibly with reduced manning, but the platforms will continue to operate. An exploration rig will get parked at Invergordon, and the crews mostly laid off.
To put this in perspective, I was a graduate with an engineering degree, with very few jobs on offer onshore, and on the advice of an old family friend, and his connections, took a job on an exploration rig. My fellow graduates, in 1980, who had gone straight in to jobs with British Leyland, Vauxhall and Ford, were earning around £2000 to £3000 p.a. This was the time when the motor industry had been doing very well, in 1979, followed by a period of near collapse after 1981.
My starting salary in 1981 was around £8000 p.a. This was monumental in comparison to my graduate chums, but it only lasted 6 weeks, as I got promoted, and was now on £9000 p.a. Oh dear, two days later I was promoted again, to roughneck, and was suddenly on £10,000 p.a. and getting a "proper job" onshore went out the window.
This was great stuff. This huge salary, effectively 6 months vacation a year, 23 years old. What's not to like? This was still a relatively "frontiersman" type of job, the girls thought that we were all hard men, we got to commute by helicopter, and were well fed. Yes, the conditions were tough, especially when the weather got bad. I was on an exploration rig, a semi-submersible, that rolled about quite badly in rough weather, and in those days if you couldn't read, time off was pretty dull. No phones, no internet, no satellite TV. 3 movies a week delivered by chopper, on reels of film, and a table tennis table. If we were watching the movie, the table tennis had to stop, as it was in the same room.
At the end of the day, if you didn't like it, you quit. I certainly went in to the job with my eyes open, and knew that I had to man up pretty quickly.
By 1984, I was a derrickman, and earning good money. I got married in 1985, bought a house, then saw the collapse of the price of oil and by 1986 I found myself redundant, with no income, a mortgage and a young wife to impress.
After a period working in South Africa, I came back to the industry in 1987. I managed to get the same job, but now with a 25% pay cut, and all of the little benefits that we had had removed. It was a bit of a struggle, but with a change of job in 1988 to Drilling Fluids Engineer, I regained some of my faith in the industry. I managed to weather the next couple of potential crises, when others were laid off, and still consider it to be well paid.
However, things are not as rosy as most of you seem to think. The Hollywood salaries of the early 1980's disappeared after the first crisis in 1985. If I was earning today what a similar engineer was earning in 1984, my pay would be 3 times higher than it is. I'm not complaining, I have roof over my head, I can feed myself, and I have a good life/work balance. I am, however, getting on in years, and while I might be a little annoyed at being made redundant now, I have managed to put something aside for this particular rainy day. That can't be said for the younger employees, who will suffer for what appears to be a drop in prices brought about by world politics, well out of their control.
If I were them, I wouldn't be complaining about pay cuts. Better to keep their jobs than lose them altogether. It's not as tough out there as it used to be, but it's still tough, and it's the exploration guys at the sharp end that will get shafted first. They are costing money, not generating it. The production boys will carry on, possibly with reduced manning, but the platforms will continue to operate. An exploration rig will get parked at Invergordon, and the crews mostly laid off.
rovermorris999 said:
IIRC it was stated in the Economist that Saudi crude production costs are around $5-$7 per barrel.
Saudi oil is amongst the cheapest to extract with things like shake oil amongst the most expensive. In the middle you have deep sea then shallow sea like North Sea basin. Then there are different types of oil, Saudi oil is quite heavy so contains less of the higher another fractions, such as hexane that make up petrol but is great for burning in our power stations of for other core industrial purposes, North Sea oil is light and very rich in hexanes and the other octane fractions that make up our fuel needs.
The cost of US oil is much higher than Moddle East so OPEC can drive the US really hard if it wants to.
Aberdeen will contract as projects get shelved but it is a central hub for much of the globe''s production so there will still be plenty or work and revenue just leaner and just as has happened before.
What is interesting is that off the exchanges oil is trading well under $50 and this suggests there is more to go on the fall of the exchange prices. Our 'house' view is that the fall has gone too far for a quick recovery. That there is no extra storage capacity so propping up the price via central buying isn't an option so high end producers are going to have to fail and s
t down to remove supply from the system. So in short, prices could go much lower potentially.
In addition, Russia is totally f
ked. Wheat is up 30% from lows as Russia will not be exporting if the ruble stays so low. And industry is screwed as they cannot buy in resources due to the cost of USD to them and the massive fall in oil dollar revenue isn't going to improve soon. In short, Russia is on the edge of repeating 1998/9 and it will take banks like Barclays with it as well as Deutsche and others.
Frankly, Aberdeen contracting off oil boom highs is a total irrelevance compared to what the whole of the UK might face again.
One could almost believe that the West may be incentivised to knock out some overseas production?
rovermorris999 said:
IIRC it was stated in the Economist that Saudi crude production costs are around $5-$7 per barrel.
Not whats stated in the Gulf itself, UAE and Qatar have about the lowest production costs being relatively small nations and little in the way of transport costs, Saudi according to the numbers here has one of the higher costs, however it does have by far the most cash in the bank to weather the storm.Another interesting article here.
http://oil-price.net/en/articles/falling-oil-price...
Especially this bit
http://oil-price.net/en/articles/falling-oil-price...
Especially this bit
article said:
According to Morgan Stanley Commodity Research, some Middle-Eastern onshore production can break even at $10 per barrel. Others in that region need around $37 per barrel, with the average breakeven point for onshore wells in the Gulf states at around $27 per barrel. US shale oil doesn't start to pay back until it achieves a price of at least $50 per barrel. Current production costs vary between that breakeven point and a price of $80 per barrel.
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