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Thanks Sefton, GRH ..... appreciate the information.
Curious as to how the Scottish plan will wipe it's face given the statement that it won't be used for EOR ?
Maybe government subsidies in addition to CO2 credits ?
Thought there may be a consideration for the full up ambition of Project Rainbow.
ATB,
Vegas
Evening GRH,
As ever, your analysis is very spot-on.
I would make a couple of observations:
Where there is a proximate source of CO2 to the relevant oilfield to which CCS/EOR is to be applied, that is pretty close to an Elysian Field. PRD has that in Trinidad (awesome achievement, PG and team).
Where there is no proxiximate source of CO2 (most oilfields in the world), on-site generation of CO2 can be commerically viable - even very attractive - under some circumstances.
These include i) high levels of unrecovered resources in an existing field (ie existing infrastructure), and ii) availability of cheap energy (either subsisdised grid - China and, to some extent, the US) or solar.
Using carbon tax credits traded into Europe (so there, therefore, has to be CCS) and solar as the power source, it is possible to get the net extraction cost of un-recovered oil down to around $12 per barrel (all-in cost but heavily subsidised by the carbon tax credits related to CCS).
That cost still changes the game for many of the "heavy oil" fields or the dormant/abandoned fields and brings them significantly back into play, especially given that they will usually have extraction infrastructure still in place and transportation infrastructure (railheads, etc) still accessible.
As I said earlier GRH, loved the timing, immediately added.
Almost back to 1%
Gla
Seems to me that the economics of the 'sucking CO2 out of the air' technology
are akin to those of using steam flooding to extract oil from the tar sands...
IE: those economics simply work at the margin at best...
but VERY quickly produce big losses at anything less than top market prices
Some VERY big outfits have been trying the 'suck it out' tech for a while now...it has not gone well
PG/RP are totally 'on it' so far as tech is concerned:
The holy grail seems to be :
1. have big sources of CO2 in easy reach
2. tie it up contractually...win/win...symbiotic deals
3. save the producers from financial fines (Paris)
4. gain carbon credit payments
5. divi up all incremental spoils via JVs
6. using other people’s money and operational /reputational leverage
BTW...anyone notice something re today's terrific RNS????????
Mid day
Love it...
as...no longer will traders be able to rely on only 7am RNSs...
it was always something I was bemused by
WHY not issue RNS whenever the news is ready!!
Regarads
GRH
Hi Vegas,
Yes, I do know of the company and the technology.
It has significant potential. But, purely as a sequestering solution, it is pretty close to a total waste of time (the cost of sucking the CO2 out of the air is more than the revenue from sequestering it).
So, it would be a net loss-maker.
Sequestering on its own is ALWAYS going to be a loss-maker - simply because of the cost of sucking the stuff out of the air (it is a miniscule percentage of the air and so sucking it out is massively energy-intensive).
Even economic illiterates like Boris or Biden might be able to understand that.
On the other hand, if you can change the point of contact from cost to a force-multiplier (EOR, coupled with CCS), the economics changed almost 180 degrees.
So, I love the "sucking out the air" stuff because it is totally independent of location (air is air, whether it be Toronto, Tokyo, Timbuktu or Trinidad) - which means you can locate it right next to the oilfield (wherever that may be) - and the EOR revenues pay for the capital cost and operating cost of the CO2 capture unit.
All of which, in my view, plays perfectly to the PRD tune and the brilliant efforts of the conductor, PG.
I have said from the first days I invested in this stock that I was here for CCS/EOR. I accept that it may turn out to be the smaller of the 3 asset groups after Morocco and Ireland - but it is still an awesome part of the business and, in my view, is worth at least 200p per share on its own (I think that, structured right, that may be to the south of its real value).
And this time with the link ... Doh !!
https://www.bbc.co.uk/news/science-environment-57588248
Evening All ....
Perhaps a stretch and then again !?
Link to an article on BBC website describing the possibility of building a CO2 DAC facility in NE Scotland.
Doesn't seem a stretch to think something similar in the Cork area ...
Sefton, are you aware familiar with the technology company ?
Exciting times,
Vegas