Interesting article a friend shared with me this weekend.
Brings up a few points for me...
1. From the article... "“It takes $10bn and five to ten years to launch a deep-water project. It takes $10m and just 20 days to drill for shale,” he said, speaking at the World Economic Forum in Davos."
Most AB Oil Sands projects are somewhere in the middle on this front. Especially brownfield expansion. Scale is also relevant, Alberta projects have notable scale, relative to a liquids rich shale well that will decline to 10-20% of its initial production within 2 years. US Shale production is a hamster wheel in the purest sense. These fields have a short lifespan if you're not constantly pumping "sustaining capital" in them. Oil Sands have significant sustaining capital requirements, but nothing like shale production. This is the nature of low EROEI production. Both of these resources are not top tier assets.
2. The US will undoubtedly become a global exporter under these conditions, especially considering the trends on vehicle use in their young population. Young people don't have good job prospects. It is effecting their home buying patterns, but also their vehicle buying and fuel consumption patterns.
3. People underestimate the effect of "cheap" capital and poor investor judgement in the rise of US shale production. Is this thing for real or not? Cash rich corps and VCs COULD keep the sector alive... as they're buying Shale assets on 5 - 15 cents on the dollar right now, this brings the effective cost of production down, but why would they do this with such short lived reserve life indicies?
4. The Saud's criticize the Russian's ability to co-operate with OPEC because they have public reporting requirements to uphold. Why on earth then is there talk about floating a public offering for anything to do with Aramco? Their upstream assets aren't included in the offering, but is this not the beginning of the process towards loss of control over your information?
5. What does it mean, exactly, for the Saudi's to want to defend their market share? I have yet to see a rational explanation for this statement.