A number of variables would determine its attraction to investors, including the stock exchange or exchanges it would be listed on. That this confirms about the oil market and the price of oil.
In a recent interview with 'The Economist,' Saudi Arabian deputy crown prince Muhammad bin Salman said one of the things he's taking into consideration as a way to relieve the financial burden on the government from an expected prolonged period of low oil prices, is to go the IPO route with state-owned oil giant Saudi Aramco.
Not only is it the most valuable oil or energy company in the world, it's probably the valuable company in the world too. We'll look at the implications of this to investors if it does go this route. Meanwhile, it's worth mentioning it confirms my thesis that Saudi Arabia knows the price of oil will remain subdued for a prolonged period. With the emergence of shale oil competitors, it will inevitably come to the place it will lose global market share.
One thing to keep in mind is the demand for oil, over time, should increase, which means the size of the market will grow with it. That will shrink the market share of Saudi Aramco on that basis, assuming it doesn't have a lot more supply it can release.
more on whether or not Saudi Aramco IPO would make sense
Showing posts with label Shale Oil. Show all posts
Showing posts with label Shale Oil. Show all posts
Saturday, January 23, 2016
Wednesday, December 16, 2015
Can OPEC Break Shale Oil?
Summary
There is nothing Saudi Arabia or OPEC can do about shale oil over the long term.
At best they can only delay the inevitable.
Millions of barrels of shale oil will be introduced into the market over the next decade.
Companies with shale exposure, over time, will take market share away from OPEC.
From some of the headlines I've read recently, you would think the U.S. shale industry has been defeated by Saudi Arabia and OPEC, and everything in the oil sector going to return to where things were before shale producers entered the market.
Not only is this a fallacy, it is the exact opposite, which is why the strategy of oversupplying the market will remain in place for now in order to keep the price of oil low, which in turn makes it more difficult to invest in new exploration and development.
The idea of market share being the battleground being fought over is a misguided one because, that would suggest shale oil can be defeated around the world. It's not going to happen. It won't even happen in the U.S., let alone the world.
more on OPEC's war on shale oil
There is nothing Saudi Arabia or OPEC can do about shale oil over the long term.
At best they can only delay the inevitable.
Millions of barrels of shale oil will be introduced into the market over the next decade.
Companies with shale exposure, over time, will take market share away from OPEC.
From some of the headlines I've read recently, you would think the U.S. shale industry has been defeated by Saudi Arabia and OPEC, and everything in the oil sector going to return to where things were before shale producers entered the market.
Not only is this a fallacy, it is the exact opposite, which is why the strategy of oversupplying the market will remain in place for now in order to keep the price of oil low, which in turn makes it more difficult to invest in new exploration and development.
The idea of market share being the battleground being fought over is a misguided one because, that would suggest shale oil can be defeated around the world. It's not going to happen. It won't even happen in the U.S., let alone the world.
more on OPEC's war on shale oil
Monday, March 4, 2013
Arckaringa Basin Lays Peak Oil Myth to Rest
Many commodity and investment experts I respect have asserted for quite some time that we have in fact reached an end to easy oil deposits in the world, even though there are many places that haven't even been explored that carefully to be able to make that assumption and assertion.
The most recent and obvious case in point is the discovery of the giant shale oil reserves in the Arckaringa Basin in Australia.
Yet even in Australia it's highly likely there are more huge oil deposits to be discovered, which would boost the idea that we have a ways to go yet before peak oil is based upon any semblance of reality.
Even when other large shale oil discoveries were made in North America, peak oil adherents refused to acknowledge that there could be a lot more oil available than we know of in the world.
Of course most are coming from the point of view of geopolitical concerns, meaning some governments and parts of the world - including America - refuse to allow energy companies to explore off their coasts in inland.
In the northeastern part of the United States, even after huge oil and gas deposits were found, they are trying to keep companies from extracting it and selling it to the world.
The other major factor is the religious belief in mythological global warming issue, which is a total lie, as the world hasn't warmed for well over a decade, and the true believers have had to change the name to "climate change" in an attempt to silence those who have exposed the lie for what it is.
After all, when the term climate change is used it's impossible to refute because in fact the climate has always been changing, and it has nothing to do with fossil fuels whatsoever, as past long-term weather cycles have proven.
This is why the term peak oil continues to be used by some who assert no significant deposits of oil have been discovered recently, even after the numerous shale oil and gas deposits were found.
Some of done this through habit and assumptions, while others have willfully and willingly perpetuated the peak oil myth.
After the Arckaringa Basin discovery and estimates of oil in it, there can no longer be an excuse for the peak oil assumption, as it has, for now, been laid to rest. I personally believe we're only at the beginning of more major oil discoveries, which will change the world for decades; not only in energy provision, but in the geopolitical realm as well.
The most recent and obvious case in point is the discovery of the giant shale oil reserves in the Arckaringa Basin in Australia.
Yet even in Australia it's highly likely there are more huge oil deposits to be discovered, which would boost the idea that we have a ways to go yet before peak oil is based upon any semblance of reality.
Even when other large shale oil discoveries were made in North America, peak oil adherents refused to acknowledge that there could be a lot more oil available than we know of in the world.
Of course most are coming from the point of view of geopolitical concerns, meaning some governments and parts of the world - including America - refuse to allow energy companies to explore off their coasts in inland.
In the northeastern part of the United States, even after huge oil and gas deposits were found, they are trying to keep companies from extracting it and selling it to the world.
The other major factor is the religious belief in mythological global warming issue, which is a total lie, as the world hasn't warmed for well over a decade, and the true believers have had to change the name to "climate change" in an attempt to silence those who have exposed the lie for what it is.
After all, when the term climate change is used it's impossible to refute because in fact the climate has always been changing, and it has nothing to do with fossil fuels whatsoever, as past long-term weather cycles have proven.
This is why the term peak oil continues to be used by some who assert no significant deposits of oil have been discovered recently, even after the numerous shale oil and gas deposits were found.
Some of done this through habit and assumptions, while others have willfully and willingly perpetuated the peak oil myth.
After the Arckaringa Basin discovery and estimates of oil in it, there can no longer be an excuse for the peak oil assumption, as it has, for now, been laid to rest. I personally believe we're only at the beginning of more major oil discoveries, which will change the world for decades; not only in energy provision, but in the geopolitical realm as well.
Friday, July 27, 2012
Marathon (MPC) Margins Could be Pressured
Over the short term it appears Marathon Petroleum should do well, and the company apparently believes that also, recently boosting its quarterly dividend 40 percent to $0.35 a share.
But for the next five years Marathon may come under strong pressure from what could be a big drop in margins. Wood Mackenzie Senior Energy Research Analyst Jonathan Leitch said the margins of the company could fall as much as 40 percent during that period.
This is because of the lighter crude oil being extracted from shale plays around the United States, which is the primary market served by the oil refiner.
Marathon Petroleum has refinery exposure of approximately 50 percent in the heavy crude market, which is the source behind the probably pressure on its margins going forward.
At this time there is an oversupply of refining capacity in that segment of the market.
This shouldn't affect the performance of the stock in the very short term, but over time it is something that must be carefully watched.
Marathon Petroleum closed Friday at $47.04, climbing $1.22, or 2.66 percent.
But for the next five years Marathon may come under strong pressure from what could be a big drop in margins. Wood Mackenzie Senior Energy Research Analyst Jonathan Leitch said the margins of the company could fall as much as 40 percent during that period.
This is because of the lighter crude oil being extracted from shale plays around the United States, which is the primary market served by the oil refiner.
Marathon Petroleum has refinery exposure of approximately 50 percent in the heavy crude market, which is the source behind the probably pressure on its margins going forward.
At this time there is an oversupply of refining capacity in that segment of the market.
This shouldn't affect the performance of the stock in the very short term, but over time it is something that must be carefully watched.
Marathon Petroleum closed Friday at $47.04, climbing $1.22, or 2.66 percent.
Wednesday, March 10, 2010
Marathon Oil (NYSE:MRO) Drilling 25 New Wells
Marathon Oil Drilling 25 New Oil Wells
Oil wells in the Oregon Basin have been producing oil for close to 100 years, and even though Marathon Oil (NYSE:MRO) hasn't been drilling there for a couple of years, they're poised to start again with a goal of drilling another 25 new wells in the region.
Along with the search for new oil, Marathon will also be employing new techniques to extract known oil resources for existing wells, possibly through the use of carbon dioxide or steam to push the oil to the surface; although that is more costly and will depend on market prices at the time whether it's feasible or not.
Crude in the Oregon Basin is called asphaltic crude, and is used in highway construction. Increased demand and prices make it worth the effort to start drilling for it again.
In general, this type of crude is close to 30 percent in value than light sweet crude, but that has narrowed recently, again, making it economically feasible to puruse by Marathon Oil and other energy companies.
Marathon Oil Drilling 25 New Oil Wells
Oil wells in the Oregon Basin have been producing oil for close to 100 years, and even though Marathon Oil (NYSE:MRO) hasn't been drilling there for a couple of years, they're poised to start again with a goal of drilling another 25 new wells in the region.
Along with the search for new oil, Marathon will also be employing new techniques to extract known oil resources for existing wells, possibly through the use of carbon dioxide or steam to push the oil to the surface; although that is more costly and will depend on market prices at the time whether it's feasible or not.
Crude in the Oregon Basin is called asphaltic crude, and is used in highway construction. Increased demand and prices make it worth the effort to start drilling for it again.
In general, this type of crude is close to 30 percent in value than light sweet crude, but that has narrowed recently, again, making it economically feasible to puruse by Marathon Oil and other energy companies.
Marathon Oil Drilling 25 New Oil Wells
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