Re: New Discovery Boosts US Oil Reserves By 50%?

"Jerry Okamura" <okamuraj005@xxxxxxxxxxxxx> wrote in
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"Earl" <neptune@xxxxxx> wrote in message
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"Jerry Okamura" <okamuraj005@xxxxxxxxxxxxx> wrote in
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"Earl" <neptune@xxxxxx> wrote in message
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"California Poppy" <GoldenStatePoppy@xxxxxxx> wrote in



Some background info.

This discovery is located about 175 miles east of
Brownsville, just about on the EEZ border with Mexico.

It is in 7000 ft of water which ups cost considerably.

It is beneath 20,000 feet of rock which makes it really
questionable.

Cost of production goes up with the square of depth.

Saudi produces at 2000 ft with a cost around $2 a barrel
We produce around 5000 ft which means a cost around $15 a
barrel

This find at 20,000 ft (+7000) will be about 16 times as
expensive as land production at normal depths.

So it will be a great producer -- when oil is priced at
$240 a barrel.

Perhaps I do not understand the point you are trying to
make, but "if" you can only make money out of this new
find, when oil is priced at $240 a barrel, why even
explore for the existence of oil at that depth? Why go
through the initial expense, which in an of itself has got
to have cost a bundle?




There are a lot of minerals at depths or in locations too
expensive to mine commercially, with existing technology
and prices.

It is the story of the old miner coming back with samples
of gold that incredibly rich. To check that they are not
being scamed the company sends its own geologist. He is
gone for what seems like forever, then they receive a
telegram. Mine is as described, send pack train of eagles.

Part of the issue of exploration is to find the reserves.

That is why we differentiate exploration and production.

But to answer your basic question. It will be worth sinking
production wells after oil passes $240 -- a price that is
going to come.

Well, that is most likely a true statement, but it seems to
me the basic question is "when"?




My personal opinion would be in about 10 years. (and that
specific discovery will not be capable of delivering oil for at
least 5-10 years)

The demand for oil, minerals and other raw materials is going to
skyrocket as India and China economies advance. We are already
at full capacity on most minerals.

Remember that the doubling rate is 72/percentage. A 4% increase
in our economy each year means that our total use will double in
18 years. Put the whole world increase in the picture and you
have a problem The supply will have a hard time increasing --
many materials like iron ore and copper are using tertiary ores
-- the orginal good sites are long gone.

The oil fields that supplied the allies with load of oil in ww2
are long since dry (actually they just produce salt water).
The monster oil fields in Mexico are dropping production about
30% this year.

The Mid East has reached max pumping capability.

The only place with significant reserve increases is Russia.


Oil prices will be dropping for the next few months.
World labor stife is reduced, war risk is lower, the hurricane
season looks to be mild/over, and the normal summer driving
season is over hense lower demand.
.

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