Oil and gas, acround the globe .....!~!

Hi folks,

There's some evidence to suggest, that the current
"oil shortage" is a myth generated by oil companies
to keep crude prices high.

Over the past couple of years, we have seen crude
prices high, but still relatively stable, transiting a
range, roughly from $25 to $35/bbl.

With less dependence on Middle East oil, it is
in the interest of US-based oil companies to keep
their production, from other countries, flowing at
international prices.

With crude oil prices high, gas-to-liquids plants
have also become an important income stream
for the oil companies.

So instead of the focus being on crude oil, the oil
companies have been able to utilize their huge
reserves of gas around the globe, that were
previously idle ..... a sure cashflow, without the
exploration risks.

Evidence of this can be seen in global rig
utilization figures over the same period.

Using offshore rigs, in 12 monitored categories,
we can see that 2 years ago, oil companies were
still exploring vigorously and the "modern" rig
fleet was fully employed worldwide.

Today, NONE of the 12 rig categories are 100%
employed, rig rates are down and 6 of the 12
monitored rig categories rate between 33 to 72%
utilization.

Only shallow-water jackups 200-300 feet and
the high-tech 5th generation, deep-water
semisubs are currently around 90% employed.

So, it is evident that oil companies have shelved
their oil exploration efforts, in preference for a
switch to processing their gas reserves and
adding to oil reserves, by acquisition.

=====

We can also see, that despite high crude prices,
drilling contractors and oil service companies are
still at the mercy of the oil companies.

Skeptics will say this is just part of the "normal
cycle of price-tug-of-war", between the drilling
contractors and the oil companies ..... that may
be correct to a small degree, but this time the
slide may be extended for a much longer period.

Of course, as the spoils in Iraq are eventually
allocated, by way of Iraqi-awarded contracts,
then the pressure to do more expensive and risky
exploration, is lessened considerably.

Other known fields, like West Africa, South America
and the Russian states will likely be developed to
lessen our dependence on Middle-east crude,
even further.

In summary, we will probably have to get used
to a high crude oil price, for whatever reason the
oil companies can justify.

Meanwhile, the oil services sector may get much
tougher for all players, in the foreseeable future.
..... and that equation never changes, it's the
oil companies' money and they will always keep
the costs down, even if it means shelving
exploration for extended periods.

Twenty years ago, there was a similar wave of
disinterest in exploration ... it lasted about 5 years
from 1983-to-1988 ..... tough times for the
oil services companies.

At one point in 1986, there was 29 offshore rigs
idle and stacked in ONE of Singapore's anchorages.

=====

An energy shortage??

..... not for the want of an energy source.

Your comments, questions and suggestions,
all welcome here .....

happy trading all

yogi