Re: How Much Oil Will the US Lose

Gas fields in the far east are not big. Unocal is not a successful company.
China can get into far east without Unocal. It will be too stupid for China
to spend money to bid this way.


"Fritz Schlunder" <me@xxxxxxxxxxx> wrote in message
news:d9i032$587$1@xxxxxxxxxxxxxxxxxxxxx
>
> "Maximust" <maxi_must@xxxxxxxxxxx> wrote in message
> news:aIYue.86967$_o.66121@xxxxxxxxxxxx
> > Tan wrote:
> >
> > > You need to study Unocal in Brunei, Malaysia and Indonesia in detail.
> All
> > > those fields are belong to Brunei, Malaysia and Indonesia. Those
> countries
> > > don't need Unocal to operate their fields.
> >
> > Unocal pays them to operate their fields and pays them for the oil.
Hello?
>
>
> That isn't primarily how the oil industry is aligned. Oil occurs in a
wide
> variety of place including poor and developing countries. These types of
> countries do not normally have any internal expertise in
exploring/producing
> oil or natural gas deposits. Additionally they do not usually have the
> capital resources available for developing oil resources. Similarly, oil
> exploration is a risky business. Large quantities of investment are
> required merely to discover the existence of oil resources: first to study
> geological cues to identify a region where oil might have a chance of
being
> found, then to conduct seismic surveys (kind of like baby ultrasounds
except
> for the earth) of underground geology to look for potential oil cap rocks
> (inverted bowl shape but non-porous to oil, thus trapping the oil in
place),
> and then finally to actually drill wildcat wells to see if any oil
actually
> exists (seismic surveys can't prove the existence of oil, they can only
find
> the cap rocks which are a prerequisite for oil deposits). All of these
> processes are quite risky (in that they definitely cost money, but may
yield
> absolutely nothing) and require the availability of specialized worker
> skills and high technology products.
>
> As a consequence the barrier to entry into the oil producing market is
> usually too large for developing countries to manage by themselves.
>
> So what they do instead is their governments make arrangements to work
with
> foreign oil companies (which have the financial means, skills, and
> technology/equipment needed) to come up with mutually beneficial and
> acceptable contracts. What kind of benefits the oil companies receives
> depends on the country and local policies, but often times they end up
> "owning" some share of the total oil reserves in the ground. In this
> fashion oil companies (primarily American and western European) all over
the
> world get to own and operate percentage shares of oil fields which are
> nowhere near their home country. This means even the poorest countries
will
> often have access to all of the latest and most expensive oilfield
> technologies. This may have some interesting implications as to how the
> world oil production capability will eventually fall off.
>
> As for Unocal you can learn a bit more about them from their website:
>
> http://www.unocal.com/aboutucl/glance.htm
>
> http://www.unocal.com/aboutucl/uclataglance.pdf
>
> It would appear worldwide Unocal "owns" about 659 mega barrels of crude
oil,
> condensate, and natural gas liquids. It seems as of 2002 only around 32%
of
> Unocal's oil production comes from the far east, while the majority (56%)
> comes from US and Canadian oil reserves. On the other hand, 42% of their
> oil and natural gas reserves (Unocal has more natural gas than oil) are
> located in the far east.
>
> If all of the world's oil reserves figures are correct, the world has
> somewhat more than one trillion barrels of oil, so Unocal's reserves are
> really only a drop in the bucket. On the other hand, a whole bunch of
drops
> equals an ocean.
>
> It is interesting to note that oil companies have been buying each other
up
> like mad over the past several years. One possible interpretation of this
> market behavior is that oil companies don't know what to spend their
> earnings on. The world doesn't have many lucrative unexplored (and
> available, IE: not in the hands of hostile nations) regions left. As a
> consequence oil company spending on exploration is largely a waste of
> time/resources (with certain exceptions, but the amount of good prospects
is
> far too small for the number of total profitable oil companies on the
world
> scene looking for places to invest). Instead, one could claim, oil
> companies are seeking to increase their reserves by buying other oil
> companies (and consequently acquiring their reserves). This of course
does
> not do anything to increase the total amount of oil available to the
world,
> although it may provide benefit to the companies that are doing the
buying.
> Not only do they get to spend excess cash reserves that would otherwise be
> laying around idle, but if in the future oil prices rise this could
> substantially increase their total company value and revenue. It would
> appear oil companies are betting oil prices will rise in the future since
> they are still buying each other up even now with oil trading at record
high
> levels.
>
>


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