Cost of oil production in various regions

Blue Peter · Post by **Blue Peter** » 18 Mar 2015, 10:22

Does anyone have a link to the graph showing the costs of oil production in various regions please?

Peter.

fifthcolumn · Post by **fifthcolumn** » 27 Mar 2015, 05:53

The Saudis can break even at $20 a barrel lift cost.
In the Canadian oil patch, the average break even for oil sands is about $60 lift cost.
In the US it varies a bit but the average break even for shale is about $50 lift cost.

Lift cost is getting it out of the ground, purely opex. If you have to figure capex into it you're also talking about sunk costs at the time the project was completed so the costs may vary. In other words if your capex was sunk into the project when things were booming then the interest payments on the capex are likely high. On the contrary if your capex was sunk when things are slack your interest payments are lower.

That is a gross simplification but the numbers are more or less accurate given that I'm here on the ground in the oil industry in the great state of Texas after having been in the Canadian oil patch for several years previously.

This link is I think the chart you are talking about: from these numbers I think this includes CAPEX too, though it's likely averaged out. http://www.businessinsider.com/crude-oi ... ion-2014-5

Blue Peter · Post by **Blue Peter** » 27 Mar 2015, 10:50

Yes, that's it, thank you. I just wanted it as a rough indication of relative costs. but I realize that there are lots of caveats which go with it.

As a follow-up, does "Arctic" refer to offshore arctic, or does it refer to land drilling inside the arctic circle. I had assumed the former, but I now realize that I had just assumed that,

Peter.