North American oil companies going bankrupt? - Tilted Forum Project Discussion Community

ASU2003 · 10-30-2008, 07:10 PM

This might be a far off situation, but what happens if the price of a barrel of oil falls below what North American companies can drill a barrel of oil for?

I'm sure that there would be greater pressure to drill off-shore and in ANWR, but even that would cost lots of money to set up to get some oil. And with a large enough push towards conservation, fewer trips, hybrids, battery-cars,CNG cars and bio-diesel/e85/ethanol could reduce our demand for oil and reduce the price.

Would we let these companies go under and only leave OPEC selling their cheap gas? Do they have enough cash reserves to handle a downturn for a few years?

Yes, I know it sounds like a weird question, but I thought about this while driving to work today.

tisonlyi · 10-30-2008, 07:46 PM

They're international.

The old, 10 years old standard, of profit for drilling a barrel of oil was $10 per barrel... for easy oil in a friendly area...

That is not, ever, ever going to happen... too much demand, too little supply.

The end of the oil is upon us. I'm 32, by the time i'm 40 the world will be hurtling towards an oil-fuel-less existence, by the time i'm 50 it'll be complete.

Probably before.

kurty[B] · 10-30-2008, 07:56 PM

Considering these oil companies are still reporting record breaking profits while the rest of the economy is taking huge hits?

I would hope like any other company they are smart enough to save themselves (invest in these new energies, offer new services). Sure the initial expense is great, but if they do not do it, someone else will. If they happen to get left behind so be it. If a company isn't willing to change with the times I hope they are willing to dissolve into history.

Baraka_Guru · 10-30-2008, 08:00 PM

I think the industry is probably weathering a transition. This is why you see Shell and Chevron touting the potential of alternative energies.

It would be wise for oil companies--if they believe in peak oil, etc.--to reframe themselves as "energy" companies.

I don't see them going bankrupt; I see the divesting and reinvesting.

Leto · 10-31-2008, 05:06 AM

I agree with Baraka_Guru. These companies are in a nascent transition from "Big Oil" providers to "Energy Asset Managers". Their business model is going to be targetted towards delivering energy solutions to the customer at the lowest per unit cost. The type of energy source will not matter. What will come into play for them is their real or perceived capability and best practices around delivering these energy solutions.

highthief · 10-31-2008, 04:58 PM

This is already happening to some extent in Canada - the tar sands are a very profitable operation, as long as a barrel of crude sells for more than a certain amount. But the labour and process intensive requirements of extracting oil from tar sands means that if the price falls, the tens of billions invested no longer look like a good deal.

10-30-2008, 07:10 PM	#1 (permalink)
ASU2003 immoral minority Location: Back in Ohio	North American oil companies going bankrupt? This might be a far off situation, but what happens if the price of a barrel of oil falls below what North American companies can drill a barrel of oil for? I'm sure that there would be greater pressure to drill off-shore and in ANWR, but even that would cost lots of money to set up to get some oil. And with a large enough push towards conservation, fewer trips, hybrids, battery-cars,CNG cars and bio-diesel/e85/ethanol could reduce our demand for oil and reduce the price. Would we let these companies go under and only leave OPEC selling their cheap gas? Do they have enough cash reserves to handle a downturn for a few years? Yes, I know it sounds like a weird question, but I thought about this while driving to work today.

10-30-2008, 07:46 PM	#2 (permalink)
tisonlyi Nothing	They're international. The old, 10 years old standard, of profit for drilling a barrel of oil was $10 per barrel... for easy oil in a friendly area... That is not, ever, ever going to happen... too much demand, too little supply. The end of the oil is upon us. I'm 32, by the time i'm 40 the world will be hurtling towards an oil-fuel-less existence, by the time i'm 50 it'll be complete. Probably before. __________________ "I do not agree that the dog in a manger has the final right to the manger even though he may have lain there for a very long time. I do not admit that right. I do not admit for instance, that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race to put it that way, has come in and taken their place." - Winston Churchill, 1937 --{ORLY?}--

10-30-2008, 07:56 PM	#3 (permalink)
kurty[B] Sauce Puppet	Considering these oil companies are still reporting record breaking profits while the rest of the economy is taking huge hits? I would hope like any other company they are smart enough to save themselves (invest in these new energies, offer new services). Sure the initial expense is great, but if they do not do it, someone else will. If they happen to get left behind so be it. If a company isn't willing to change with the times I hope they are willing to dissolve into history. __________________ In the Absence of Information People Make Things Up.

10-30-2008, 08:00 PM	#4 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	I think the industry is probably weathering a transition. This is why you see Shell and Chevron touting the potential of alternative energies. It would be wise for oil companies--if they believe in peak oil, etc.--to reframe themselves as "energy" companies. I don't see them going bankrupt; I see the divesting and reinvesting. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

10-31-2008, 05:06 AM	#5 (permalink)
Leto Junkie Location: The Danforth	I agree with Baraka_Guru. These companies are in a nascent transition from "Big Oil" providers to "Energy Asset Managers". Their business model is going to be targetted towards delivering energy solutions to the customer at the lowest per unit cost. The type of energy source will not matter. What will come into play for them is their real or perceived capability and best practices around delivering these energy solutions. __________________ You said you didn't give a fuck about hockey And I never saw someone say that before You held my hand and we walked home the long way You were loosening my grip on Bobby Orr http://dune.wikia.com/wiki/Leto_Atreides_I

10-31-2008, 04:58 PM	#6 (permalink)
highthief Junkie Location: Ontario, Canada	This is already happening to some extent in Canada - the tar sands are a very profitable operation, as long as a barrel of crude sells for more than a certain amount. But the labour and process intensive requirements of extracting oil from tar sands means that if the price falls, the tens of billions invested no longer look like a good deal. __________________ Si vis pacem parabellum.