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LY,
If you know an asset is going to increment in price , you don't sell . Saudis are now desperate to sell their priced cow Aramco , even though just a paltry 5% . yet they must not seem desperate in doing so . Fool anyone who buys into Aramco . Oil days are numbered . Just think of the turmoil Brent dropping from $100 /barrel to c $60 in the last 12 yrs . North Africa Govs and ME haven't had sufficient revenues to appease their electorate leading to internal strife . Once Crude Becomes a 0.1% necessity of our lives , peace will return to ME. Those lands Will return to insignificance
Maintenance costs for SeaLion would be not so much different to the Catcher oilfield in the North Sea (wave heights are actually lower on average where Sea Lion is located and the air temperature mostly stays above freezing even during their winter).
OiI Service companies are offering better rates all the time (workers are paying the price of austerity sadly and technology is also lowering costs within the oil industry).
There is very little maintenance needed for a conventional oilfield using modern technology (unlike fracking in the Permian basin in the USA). Once Premier Oil have the 36 wells drilled (to fully exploit the entire field) and an FPSO set up to process the raw crude then the number of staff needed to maintain safe operations would be less than 200 (possibly level than 100, or even just a handful, as many oilfields around the globe are now unmanned/automated and require no staff for years on end).
By my calculations lets be realistic and assume an average crude price of $80 over the life of the field (the USA is going to have to stop exploiting Nigeria, Saudi Arabia, Venezuela, Iran, and to start paying a better price for crude oil in the future).
Let's assume the field is slightly larger than currently stated (as most good quality oil fields tend to produce more than the initial estimate of their reserves) and will produce (along with its nearest neighbour) 1.25 billion barrels of oil from 2023-2040.
So the revenue from Sea Lion plus its nearest neighbour will be $100 Billion (i.e. $100,000,000,000).
The cost for initial development let's assume to be as much as double as those for the Catcher oilfield in the North Sea. It was $1.6 Billion for Catcher so let's assume $3.2 Billion as the joint costs for developing Sea Lion oilfield along with its nearest neighbour.
Let's assume 100 maintenance staff/engineers are needed as full time employees across the 17 year operating life of the field. Let's assume their average employment costs are $90,000 per annum. That equals $153 million.
Let's assume sundry costs and materials needed for well maintenance/ FPSO maintenance over the 17 years are a further $150 million per year. Which equals $2.55 Billion.
So from 2023-2040 the potential revenues from Sea Lion and its nearest neighbour are $100 Billion. The total costs are less than $6 Billion.
Hence there is $94 Billion in value to be extracted for the benefit of PMO's and RKH's shareholders by going ahead with oil production from the Falkland Islands. What "dark forces" are holding up this project when generally in life most people like to make money - and there is < $94 Billion to be made from turning the sea around the Falkland Islands into a safe-and-effective producer of hydrocarbons (to help alleviate poverty and also to contribute positively to the health and well-being of citizens around the globe - such as mechanising food production in Nigeria and Zimbabwe so they can earn more foreign currency from
Maintenance costs for SeaLion would be no different to Catcher.
OiI Service companies are offering better rates all the time (workers are paying the price of austerity sadly).
There is very little maintenance needed for a conventional oilfield using modern technology (unlike fracking in the Permian basin in the USA). Once Premier Oil have the 36 wells drilled (to fully exploit the entire field) and an FPSO set up to process the raw crude then the number of staff needed to maintain safe operations would be less than 200 (possibly level than 100, or even just a handful, as many oilfields around the globe are now unmanned/automated and require no staff for years on end).
By my calculations lets be realistic and assume an average crude price of $80 over the life of the field (the USA is going to have to stop exploiting Nigeria, Saudi Arabia, Venezuela, Iran, and to start paying a fir price for crude oil in the future).
Let's assume the field is slightly larger than currently stated (as most good quality oil fields tend to produce more than the initial estimate of their reserves) and will produce (along with its nearest neighbour) 1.25 billion barrels of oil from 2023-2040.
So the revenue from Sea Lion plus its nearest neighbour will be £100 Billion (i.e. $100,000,000,000).
The cost for initial development let's assume to be the same as for the Catcher oilfield in the North Sea. So $1.6 Billion.
Let's assume 100 maintenance staff/engineers are needed as full time employees across the 17 year operating life of the field. Let's assume their average employment costs are $90,000 per annum. That equals $153 million.
Let's assume sundry costs and materials needed for well maintenance/ FPSO maintenance over the 17 years are a further $150 million per year. Which equals $2.55 Billion.
So from 2023-2040 the potential revenues from Sea Lion and its nearest neighbour are $100 Billion. The total costs are less than $6 Billion.
Hence there is $94 Billion in value to be extracted for the benefit of PMO's and RKH's shareholders by going ahead with oil production from the Falkland Islands. What "dark forces" are holding up this project when generally in life most people like to make money - and there is a shed load of money to be made from turning the sea around the Falkland Islands into a safe-and-effective producers of hydrocarbons (to help alleviate poverty and contribute positive to the health and well-being of citizens around the globe - especially the investors/shareholders and the Falkland Island citizens).
So
John46,
I still think natural resources are a blessing. It is very easy to create cheap transport, and electricity to every home, if one has an abundant supply of oil and natural gas underneath one's country.
It is the mismanagement of these resources which leads to civil wars and the economics of chaos (such as seems to be what has happened in Nigeria).
Wouldn't we prefer to buy a house identical to an alternative (including in price), except for the first house having 20 tonnes of coal, 10 tonnes of seasoned logs, 50,000 litres of petrol, and 40,000 litres of LPG all stored just 2 metres underneath the back lawn?
I think we both know the real problem is security - perhaps once our neighbours realised what was under our back lawn they would attempt to distract us at the front door whilst looting our energy resources from under our back lawn.
Poor Nigerians have suffered from a lack of security ...not sure this is really the same as Dutch syndrome ... although I thank you for drawing my attention to Dutch syndrome, and I can see that it is partially related to the problem of security (as an appreciating currency makes it easy for the stronger to leave for a country with a long history of the rule of law (such as the UK) whilst the weaker have no choice but to remain and act as a drag on that economy's potential).
John46,
I still think natural resources are a blessing. It is very easy to create cheap transport, and electricity to every home, if one has and abundant supply of oil and natural gas underneath one's country.
It is the mismanagement of these resources which leads to civil wars and the economics of chaos (such as seems to be what has happened in Nigeria).
Wouldn't we prefer to buy a house identical to an alternative (including in price), except for the first house having 20 tonnes of coal, 10 tonnes of seasoned logs, 50,000 litres of petrol, and 40,000 litres of LPG all stored just 2 metres underneath the back lawn?
I think we both know the real problem is security - perhaps once our neighbours realised what was under our back lawn they would attempt to distract us at the front door whilst looting our energy resources from under our back lawn.
Poor Nigerians have suffered from a lack of security ...not sure this is really the same as Dutch syndrome ... although I thank you for drawing my attention to Dutch syndrome, and I can see that it is partially related to the problem of security (as an appreciating currency makes it easy for the stronger to leave for a country with a long history of the rule of law (such as the UK) whilst the weaker have no choice but to remain and act as a drag on that economy's potential).
LY,
Addendum , it will take 10 yrs to build infrastructure in Falklands for Rockhopper , by which stage Brent will be down to $20 /barrel . Maintenance costs due to remoteness , ludicrously high , unviable , another Afren in the making . If you want to profit from Rockhopper short it . Wait for the spike first , to suck in victims .
Hi Taskmaster,
How is the battery recharged when an electric car brakes?
Could you explain the process in detail please.
And rather than spending thousands of man hours developing this technology - wouldn't it have been more fun to just take more holidays and leisure time by continuing to use the technology we already had?
I view people who are always wanting to work as weirdoes. We can all have a flipping good time if we just stick at the current level of technology society has reached. Computers don't seem to be making people happier. University degrees don't seem to be making people happier. In fact I reckon society needs more mechanics and more people resurfacing our roads.
Society has chosen a bad direction if you ask me. We already reached an optimum level of technology about a decade ago. Best idea for the government back in 2005 would of been just to get more people to go into practical trades such as mechanics, plumbers, electricians, builders, brewers, farmers etc.
Funding more and more youngsters to go to uni has only increased prices and massively distorted the day-to-day economy of maintaining a warm and well-furnished home, a working and safe car, and plenty of leisure time for fun with family and friends. The aim of life is not to be constantly working or stressed - it is to be having fun and we already had enough technology for that as a society once we had good quality cars (late 1990s onwards) and efficient extractive industries (oil extraction, natural gas extraction, and quarrying).
Why people are working hard to build Teslas for peanuts (in the grand scheme of thing their wages are peanuts compared to what people at GM, Ford, Chrysler, etc were being paid before they got shafted in 2008 and all the promises to them were broken and all their benefits, salaries, and pensions were forcibly renegotiated - almost at gunpoint with the government stepping in and telling private companies what they 'had to do' because the FED wanted to make people unhappier on the whole -- a stupid aim really when I can't think of a better reason for being alive than to be happy and to be having fun with friends and family).
Will that be applicable to the planting of Billions of Elm trees by Jo Swinson.
LY,
You're not conversant with Dutch syndrome . Natural resources under your ground is more of a handicap than blessing .
"Dutch disease is a concept that describes an economic phenomenon when the rapid development of one sector of the economy (particularly natural resources) and the decline of other sectors lead to the substantial appreciation of the domestic currency. It is a powerful tool to regulate the."
https://corporatefinanceinstitute.com › ...
Dutch Disease - Definition, Disadvantages, and How to Avoid
Just ask Saudis , Venezuelans and Nigerians how'll they'll manage in 15 yrs time when their natural resources aren't wanted.
It is very fortunate for the climate change protesters that the majority of Nigerians and Venezuelans are extremely poor despite Nigeria producing 2,200,000 barrels of crude oil every single day (mostly for export) and Venezuela, over the past decade, producing over 3,650,000,000 barrels of crude oil. And these are only small producers compared to the USA, Russia, and Saudi Arabia.
It is a choice between either keep people poor and their economies largely undeveloped or we need to invest more into increasing oil production at a global level (including from around the Falkland Islands). The Rockhopper share price is ludicrously undervalued currently - get yourself some shares and you may do very well if the bankers act rationally (i.e. it is better to exploit the oil and use it to pay for alleviating poverty and past wrongs rather than to run out of oil and thus continue keeping more than half the world's population farming using donkeys and horses.
Currently the US government chooses to keep people poor by supporting crackpot governments in Nigeria and Venezuela whereby they fund the military with the sole aim of making sure less than 01% of the population becomes rich and the rest still have to use donkeys/camels to plough their fields. The productivity in Nigeria and Venezuela is atrocious because they simply aren't operating as fully mechanised economies. They are equivalent to how the United States was back in about 1905. And the United States is very happy with this because it has been importing Nigerian oil for the past five decades at an average oil price always manipulated to the downside, and generally ripping off investors and ripping off anyone trying to make a modest living from investing in Nigerian oil production on a fairer basis (with more of the benefits going towards the Nigerian economy).
Afren was an example of a company that sought to employ mostly Nigerian staff and to channel the tax revenues back into the Nigerian economy. Went bankrupt due to fraud but it had quite large oil fields (a low cost of production) and there was no reason for it to have gone bankrupt except that the oil price was manipulated artificially low by the Trump administration.
How can anyone make sense of what has gone one? Anyone would think money had no use in the "real world" because the amount of fraud that has gone on in financial markets there ought to have been a lot more wars/protests as a result of the huge amount of financial fraud plaguing the global economy since 2007 and the beginning of Quantitative Easing (free money for some and not for others - biggest unfairness in human history).
Climate change protesters really annoy me. They are really being manipulated by the media because Western governments (especially the USA) want to keep people poor - they don't want Nigerians to have the benefits of a mechanised economy. They don't want Brazil to have a self-sufficient farming industry that can compete with farmers in the mi
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No, me neither
Re Longtimeinvestor:
It is very fortunate for the climate change protesters that the majority of Nigerians and Venezuela are extremely poor despite Nigeria producing 2,200,000 barrels of crude oil every single day (mostly for export) and Venezuela, over the past decade, producing over 3,650,000,000 barrels of crude oil. And these are only small producers compared to the United States, Russia, and Saudi Arabia.
It is a choice between either keep people poor and their economies largely undeveloped or we need to invest more into increasing oil production at a global level (and on a micro level that means UK banks funding Sea Lion and making sure we extract the oil from around the Falkland Islands, both to the North as well as the condensate and prospective oil resources to the South).
Currently the US government chooses to keep people poor by supporting crackpot governments in Nigeria and Venezuela whereby they fund the military with the sole aim of making sure less than 1% of the population becomes rich and the rest still have to use donkeys/camels to plough their fields. The productivity in Nigeria and Venezuela is atrocious because they simply aren't operating as fully mechanised economies. They are equivalent to how the United States was back in about 1905. And the United States is very happy with this because it has been importing Nigerian oil for the past five decades at an average oil price always manipulated to the downside, and generally ripping off investors and ripping off anyone trying to make a modest living from investing in Nigerian oil production on a fairer basis (with more of the benefits going towards the Nigerian economy).
Afren was an example of a company that sought to employ mostly Nigerian staff and to channel the tax revenues back into the Nigerian economy. Went bankrupt due to fraud but it had quite large, shallow water, oil fields and there was no reason for it to have gone bankrupt except that the oil price was manipulated artificially low in order to further benefit/increase the oil consumption of US citizens (when the USA already consumes four times as much oil per capita as any other country on planet Earth!).
How can anyone make sense of what has gone one? Anyone would think money had no use in the "real world" because the amount of fraud that has gone on in financial markets there ought to have been a lot more wars/protests as a result of the huge amount of financial fraud plaguing the global economy since 2007 and the beginning of Quantitative Easing (free money for some and not for others - biggest unfairness in human history).
Different particulates Got
Need to know what u emit
Taskmaster, I really wouldn't know where to look now, but try World Economic Forum - the carbon footprint of electric vehicles. From memory they quote twice the energy and twice the pollution than making an ICE car and there are plenty of articles stating the pollution and energy used for the battery pack represents 50% of the total figure.
Callisto.I have a nephew in the RAF who has served two tours of the Falklands.If any poster thinks that it would be as easy to extract oil from the Falkands than it was from the North Sea.I can give them his email address and he will tell them what he as told our Family,The Falklands are hell on earth during the winter.
@Richard "I have read that the energy required to make the battery pack for a mid size EV is the the same to manufacture a complete ICE car"
Can you send me the link to that, I'd be interested to read it.
Micro particles from tyre wear is a major problem already and much heavier EVs will make this worse.
Latest diesels with adblue are very clean and of course more economical than petrol, but the furore over dieselgate and government misinformation has turned us against them.
I have read that the energy required to make the battery pack for a mid size EV is the the same to manufacture a complete ICE car. Then there is the energy required for the car itself. We run the danger of not being given the full facts, particularly concerning the mining and processing of the lithium and cobalt - the lithium is a finite resource and the cost to reprocess spent batteries is about five times higher than manufacturing from new. If we had the pollution figures for the manufacturing of EVs compared to ICE cars, it would be a start but I guess the powers that be don't want us to give these facts.
Jt5006 .When you say that diesel engines was always a sooty product.Does this mean that they emit more "dirty coloured smoke" than petrol engines.I have had a diesel car for about 10 years(more than one).As I have it serviced every year there is never any visible smoke whatever the conditions,even harsh acceleration.My current model Vauxhall Corsa 1.2 diesel ecoflex,returns average 65mpg and 89gms emissions.I read an article recently that Siemens were developing a diesel engine that produced 55gms emiisions.Now is the problem that a diesel engine emits more pollution into the atomosphere than a petrol engine that cannot come anywhere near the diesel.I am at a lost to understand which is the heavier polluter a diesel engine emitting 89gms or a Vauxhall Corsa Petrol emitting 110 gms upwards.
J46
ONCE THE WORLD- yes - let us be - we are not the sinners-
JL,
Once the world masters harnessing its natural power resources there will be no acid rain . Lloy should encourage it through cheaper lending rates and lower equity criteria , following assessment of risk factor .
And has been said before- what is the cost of the extraction of the minerals needed to manufacture the batteries?
Is that source infinite - no!
Diesel was always a sooty product - tho Tony Bliar said it deserved a reduction in duty. That was his green contribution.
Now we rant about LLOY funding so called "green" products - no more green than before considering the birth to grave analysis.
Circle of paradox - I guess - with nobody really understanding - plus ca change - plus c'est la meme chose.
J46
U & Snige - skins waterproof - fat lot of good that is it t is not impervious to chemicals and other factors - disease etc
Forget the green thought - just another metoo fad.
green means getting ur fingers dirty - not something the snowflakes know about and they have never seen anything but washed carrots and other root veg - catering for urself
Auson "so more tyres brakes etc"
I can say electric car brakes get light use due to regenerative braking, all the friction energy normally wasted pad to disk goes back in the battery. Taxis in London would change a set of pads at 25k now it's over 100k. Tyres may be subject to more wear I suppose with the heavier vehicles that will come down, I've not noticed it myself. Always beware scrappage schemes in my opinion.
Snige
''but most of that oil will never see the light of day''
Do you realise that thousands of products use oil
Richard5634234,
Add to that most SUV EV are over 2 tons so more tyres brakes etc. Much more Aluminium and carbon fibre used in EVs energy heavy to manufacture. Also upgrades to power lines charging stations incentive schemes to scrap perfectly good older vehicles to replace with cleaner ones all extravenergy now to save later.