Digging-in time
The short-term fundamentals look dire. But producers must not panic
John Hill owns a small company producing about 300 barrels a day of oil in eastern Alberta. Extraction involves fracking and is expensive. Hill needs $50 a barrel to keep his back-office staffed and his oil flowing. Costs are sticky and reducing them brings decisions about whether to spend $1,500 or so on regular lubing and maintenance or skip a month. Hill, not his real name, plans this year to increase production to 800 b/d. He needs to lay a short pipeline to do this and is searching for investors to fund the $1.4m outlay. Why, when his business loses money with each barrel it produces, does he want to double down? “I need to prove to the bank that I can manage this asset better than the
Also in this section
21 February 2025
While large-scale planned LNG schemes in sub-Saharan Africa have faced fresh problems, FLNG projects are stepping into that space
20 February 2025
Greater social mobility means increased global demand for refined fuels and petrochemical products, with Asia leading the way in the expansion of refining capacity
19 February 2025
The EU would do well to ease its gas storage requirements to avoid heavy purchase costs this summer, with the targets having created market distortion while giving sellers a significant advantage over buyers
18 February 2025
Deliveries to China decline by around 1m b/d from move to curb crude exports to Shandong port, putting Iran under further economic pressure
