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1/14/2005 12:48:00 AM
Since we have so much of it, how come Canada doesn't become the #1 producer of it? I know it is harder to get to and costs more per barrel, but if you start producing more it should be cheaper, should it not?
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1/14/2005 12:48:00 AM
sorry if I sound dumb
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1/14/2005 1:11:00 AM
either im really drunk or that pic has four eyes
thats not bad logic but the governments of both countries would never allow it to happen
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1/14/2005 1:43:00 AM
guess who owns much of the companys drilling for oil in canada
ta da halliburton
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1/14/2005 2:32:00 AM
no no it's simple economics.
Let's say the market price for crude is $50 barrel
If you're Canadian_Drill_Co, you work out the cost to buy/acquire land, explore, drill, bring to market, and you end up at a cost base of $60 per barrel.
Clearly it doesn't make sense to invest in this venture.
You allude to the point of 'the more you make the cheaper it will be'. But this economy of scale calculation can at most say take your cost base down to $58/barrel.
So if/when the market price of oil actually inflates to say $100/barrel, which it should, it will make more sense to increase Canadian drilling, because the margins will actulaly be there.
The government recognizes this, and beleive it or not, their policy now is to promote 'drilling and exploration'. That doesn't mean actual production and taking to market. Why? Well say you drill for 10 years and explore the land, and map out where the reserves are - okay great - now you've got a roadmap when the price does warrant drilling in the NWT.
It's interesting because the government offers a tax kick-back if you invest in flow-through shares that support oil and gas exploration companies. So you can get an immediate tax writeoff - up to 70% of your investment if you invest in such flow-through vehicles that support the exploration industry.
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1/14/2005 5:40:00 AM
we said the same thing.
btw, i was wrong on the flow through shares. the one i was offered gives 70% back, but most give 90% back!
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1/14/2005 10:20:00 AM
*nod*
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1/14/2005 11:37:00 AM
Interesting thread. Neu and Engineer save the day again!
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1/14/2005 2:26:00 PM
Heres something interesting that I just learned. Our office is working on a new oil sands project for a client. According to them they will be producing a barrel of oil for about $5.64 cdn. Other oil sands based projects are producing oil at around $11-12 / barrel.
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1/14/2005 2:28:00 PM
Those excavators up in Ft. McMurray are really something else... I heard that every one of them grinds off enough steel off themselves to made a midsize car, EVERY DAY.
That is a big freakin' machine......
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1/14/2005 3:05:00 PM
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1/14/2005 3:59:00 PM
vinyl - production is just part of the value chain. refinement, distribution, retail etc.
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