A little insight as to why "our" oil and gas is so attractive.

I have a geologist friend who works for Chevron at the Tengiz oil field in Kazakhstan.    Was at a (non oil/gas related) conference with her this weekend.   She has been doing 28 day rotations in Kazakhstan and then 28 days back in the US for several years now.   After talking "shop" with her a little this weekend it is very apparent as to why our region's resources are so attractive.   In fact it makes me think perhaps we have sold ourselves short and I have not been one to feel that way in the past.

This field is extremely remote.  Even the "local" workers are flown or railed in to work and live on site while working.   Obviously the logistics of the non-nationals are incredible when you are flying people across the world and paying all their living expenses.  The thing that struck me the most - they have constant need for interpreters at all times.  The logistics add whole layers to the enterprise.   Hearing her experiences the cost to produce these fields must be absolutely staggering.  

I believe she said they are producing 75-100 million/day.  I also believe the Kazakhstan govt owns all the mineral or "mining" rights.  

http://www.chevron.com/news/currentissues/tengiz/

Makes getting oil/gas from our area look like a piece of cake.  

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Permalink Reply by Dan on January 16, 2012 at 3:13am

Yesterday a segment on the news about oil prices being to high.  Their veiw was oil prices most likely will not adjust down due to futures trading and limiting production because-------------Top oil producing nations need more revenues to meet their countries budgets.  10 years ago Saudi needed $25 / barrel and today needs $80.  On the other end of the spectrum Russia needs upwards of $150 / barrel to keep theier economy flat.  The more expensive a play, the more a barrel you need.  High oil prices keep exploration going.  Folks are worried about how we extract the energy but the real concern is how energy, metals and FOOD are traded in the futures markets and how prices can be manipulated and massive amounts of wealth taken with out product ever leaving the docks.  Brokers bought rice futures over and over never offering to sell the futures.  They just kept buying them until it looked like a massive shortage then sold them for a huge profit.  The price of rice skyrocketed breifly.  It's estimated 6 million people in the world starved to death from that one deal.   In a true supply and demand world economy the price of oil should be lower today.

Permalink Reply by craig on January 16, 2012 at 5:06am

Over time, most regulatory solutions to a problem tend to foster the exact opposite of what is desired. This is true in the futures market as well. No history lesson here, but the futures markets were developed for various reasons, one of which was to tame the fast wild swings in commodity prices that were occurring which did in fact impede manufacturing/processing industries at the time. Now futures have evolved into a money making machine in their own right to some extent, while having the effect of inflating values because of a perceived 'situation'.

Permalink Reply by dr j on January 16, 2012 at 8:40am

So true.  They did a major expansion on this field in 2008 - no coincidence as the 100/barrel mark was considered the break even point for this particular play.  

Of interest to me also- the whole "sour gas" logistics of this field. 

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