Posted on 11/14/2007 6:23:22 PM PST by Dane
Alberta oil too costly: Saudi official Energy minister says Middle East a better investment than oilsands Shaun Polczer, Calgary Herald Published: Wednesday, November 14, 2007
Canada is one of the world's costliest oil producers and requires high prices to remain viable, Saudi Arabia's oil minister said in Riyadh on Tuesday, suggesting Saudi Arabia is a better value for investors.
Commenting in Arabic, Ali Al-Naimi noted that the "sands of oil" in northern Alberta need prices to be at least $40 to $60 US a barrel to develop the massive reserves, which are pegged as second only to Saudi Arabia's.
"Today, the price of oil is proper for producers there," he said at a news conference to kick off the third OPEC summit.
"If you can show me that investing and producing a barrel from the sands in Canada is better than investing and producing a barrel in Saudi Arabia, then I would go there, but it doesn't," Al-Naimi said bluntly.
(Excerpt) Read more at canada.com ...
I grew up in New Mexico where there was a Uranium boom in the 70’s. I believe it can boom again.
We could produce all the energy resources this country needs. But it will take a change in attitude from where we are today.
“We passed that up about $40 ago.”
Yes, but read the threat between the lines. He is saying that if oil sands or oil shale is ever pursued on a large enough scale to threaten Saudi oil profits, he will drive them out of business by expanding Saudi capacity.
Just the knowledge that the Saudis can do this anytime they want — and wipe out huge investments in oil sands or oil shale — is enough to prevent really large capital investment.
The US government ought to put an offer on the table to buy oil from US or Canadian oil sands or shale and remove the threat to capital investment. A 20 year commitment to buy 1 billion barrels a year at $50 no matter what happens to the market price. With that promise, investors wouldn’t need to fear the Saudis opening the spigot.
This oil minister’s claims about oil sands needing $50 oil prices are also off a bit. Back in 2005, the cost figures for Alberta oil sands was less than $20. You don’t need a 150% markup to continue with a business. The oil sands could get by at $30 oil.
Still, the main point of a price differential is still important. Even at $30, the Saudis still have $25 profit, and could still undercut oil sand costs by a big margin.
I caught it, but I am of the opinion that global demand, lead by Asia, will outstrip any increases in production the Saudis deign to implement.
$40 per barrel oil is the break-even point, and $40 oil ain't coming back.
You mean like the headline today about the 19 year old rape victim in Saudi Arabia that a Court sentenced to 200 lashes plus time in jail ?
Yes. Victim. A Shiite girl gang-raped by six Sunnis, and she is punished. Punished more harshly than the rapists, since they only got jail time and no flogging.
Her lawyer has had his license pulled and is up for reprimand for talking to the press about the sentence. And her sentence was originally 90 lashes, upped to 200 because she talked to the press.
Doesn’t sound like we are having much of an influence to me.
Is that you, Ben Bernanky ?
“$40 per barrel oil is the break-even point ...”
Break-even for what ? Oil sands development ?
From http://en.wikipedia.org/wiki/Oil_sands
“For the last 38 years or so, bitumen has been extracted from the Athabasca Oil Sands by surface mining. In these tar sands there are large deposits of bitumen with little overburden, making mining the most efficient method of extracting it. The overburden consists of water-laden muskeg (peat bog) over top of clay and barren sand. The tar sands themselves are typically 40 to 60 metres deep, sitting on top of flat limestone rock. Originally, the sands were mined with draglines and bucket-wheel excavators and moved to the processing plants by conveyor belts. However, in recent years companies such as Syncrude and Suncor have switched to much cheaper shovel-and-truck operations using the biggest power shovels (100 or more tons) [9] and dump trucks (400 tons) in the world. This has reduced production costs to around $15 per barrel of synthetic crude oil.”
Yeah. Sit back. No peak oil. We ain’t goin down because of oil even as the Left is trying to engineer just that situation.
If we could hang all our enviros overnight we could get a handle on this thing.
The war on terror is not about women’s rights...especially not about non-american citizen women’s rights. Quit thinking like a liberal.
Nope, simply a guy that pays attention to inflation in every day spending.
I see.
You said, “... and therefore can influence their governments ...” so I thought you were talking about bringing them out of their savagery. Your original post didn’t say a word about the War on Terror, but let’s look at that.
You should realize that Sharia Law is the backbone of Islamist savagery, especially the Wahabbist version practiced in Saudi Arabia. The way it cheapens human life breeds Islamist fanatics. Curbing the excesses of Sharia Law should be an important area to exert our “influence” as you call it.
It isn’t about “women’s rights”, it is about savagery, martyrdom, slavery, mutilation, and brainwashing. If you don’t see the connection to the War on Terror, then you haven’t given it much thought. We aren’t at war with a country or a group, we are at war with a savage civilization. We can’t expect to win the war by taking out people or places. We can only win by changing the civilization. How could we ever hope to win as long as the brainwashing culture is constantly cranking out new soldiers ?
The romans tried to outlaw christianity and look what it got them. Liberals and atheists are trying to water down christianity and conservatism and all they get for their troubles is more determined christian conservatists trashing their philosophies.
No, we must draw the line at the individual muslim’s personal beliefs in their own homelands. THAT they can have their own way. It’s what they do to OUR people in OUR lands that we will punish them for. Now, it gets tricky when we go after a “nation that harbors terror and terrorists”. It needs to be done, but in a way that the muslim still feels in control of his own destiny.
What I am proposing is to point out to them where their corner is so they can safely back into it and do as they please in it. What you are proposing is to take the corner away from them thereby forcing them to fight to the death to the last man.
Your way is foolish arrogance. My way is reasonable, practical, and more importantly, possible.
Maybe a generation or two down the road, after my plan has succeeded, our grandchildren or greatgrandchildren can get to work on your plan.
I didn’t say stamp out Islam. I said use any “influence” we have to curb the more excessive and savage practices.
Your way will never work. It would be like fighting a conventional war and never moving past the front to attack the factories that make the weapons. In the WOT, the brainwashing culture is the factory and the martyrs are the weapons.
You just totally blew me away with that analogy. Now I understand what the fools were thinking when they drew a line on a map in the vietnam war. THey were thinking that if we let the enemy have a space of their own, that they would back off and accept that space as their’s and let us have our space.
Well they were wrong weren’t they?
Now, I see why you think the line I am drawing is analagous the the line the fools drew in vietnam. You might have a point. But what you are proposing is...I think completely impossible. I don’t see how any culture will tollerate outsiders dictating to them what is proper for them to do in their own home.
If saudi arabia told america that they should drink their own urine and that they will force us to do so, would you even listen for one second to them? I wouldn’t. But guess what? Muslims drink their own urine.
So we’re screwed. THere’s no end but the END.
If it’s ridiculous why do we get right in there and die to secure it? Because you can’t fill up your stupid tank with dollar bills. Some day those dollars may be worth nada but that resource will always hold value.
“The romans tried to outlaw christianity and look what it got them.”
That analogy doesn’t hold nearly the same amount of water today.
Barely. Canada represents 9% of the US’ imported crude and only a small percentage is from oil sands.
You may be right about getting by, but when oil gets higher, the incentive for rapid development really hits hard. I know that thousands of maritimers ( thats the part of Canada I am from) started migrating to Alberta for wrk two years ago. My cousin drives one of those huge trucks out there. The boom would not be happening at 30%, but there might be a very gradual , cautious development investment. Right now the shares d=for the development company are in high demand, and as the sands increase their production, there will be a lot of profit taking. People are IN on the development, and investing in it. Thats what has the Saudi's cranked, as they look wisfully at the Euro to replace the dollar, the dollars are not waiting , but heading to Alberta.
And that tickles me.
The Arabs can go Euro, and lets see who puts the oil out.The saudis won't becuase the ppbl will go down, and their stick will decline in price, thereby confounding their own investors.
Euro based investment in Saudi just is not taking up the slack.
Even at $30, the Saudis still have $25 profit, and could still undercut oil sand costs by a big margin.>>>>>>>>>>>>>>>>>>>>>>>>>
Sure they could, but they want to replace the dollar with the Euro, and they can't do that by chasing away Euro based investment by reducing their massive profits.
Alberta Oil Sands Stock is cheap, more secure, and a lot more likely to yield profit than the expensive Saudi Oil stocks, which exist in an unsecure environment, subject to the whims of Wahabism.
No one is investing with the Saudis except immensely wealthy Europeans, but US and Canadian investors are galloping to Alberta. I am proud to say that I am one, following the advice of my broker.
I am glad the Saudis are ticked, a little competition has them all bent. Perhaps OPEC will be finished as the major controller of World Oil prices. One can only hope.
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