Oil Crashing

[Coho911]

Whuh oh…

Suncor just started making BIG Cuts…

http://www.zerohedge.com/news/2015-0...-hiring-freeze

[martinnordegg]

Originally Posted by Deer Hunter

The province is lending the Northwest Upgrader group the money asking for a 5% rate of return to be paid back over time based on the tolls collected from the provinces (royalty) oil. The province will have no ownership in the project yet provided the money and the oil commitment to push it forward, all while being 100% over budget and behind schedule.

This is the only way refineries get built in Alberta. I hope they don't build another one, as there is no way for taxpayers to benefit beyond the 5% return. CNRL shareholders, and the people building it, they are the winners here.

I wonder how big of a shareholder our ex-Premier is of CNRL? Murray and Allison "in bed" with each other?

[dantonsen]

Originally Posted by Deer Hunter

The province is lending the Northwest Upgrader group the money asking for a 5% rate of return to be paid back over time based on the tolls collected from the provinces (royalty) oil. The province will have no ownership in the project yet provided the money and the oil commitment to push it forward, all while being 100% over budget and behind schedule.

This is the only way refineries get built in Alberta. I hope they don't build another one, as there is no way for taxpayers to benefit beyond the 5% return. CNRL shareholders, and the people building it, they are the winners here.

Most oilsands and heavy oil industry is somehow hatched by government.... the two major upgraders in ftmac were government pet projects at one point in time. Husky in lloyd was some sort of government idea, nova chemicals is another one. The federal government piloted the research to unlock how to 'upgrade' bitumin in the 50's and 60's.

I think we need more down stream industry because it will create stable local demand for upstream raw materials.

A barrel of bitumin is worth 32$ a barrel of syncrude is worth 50$.... diesel and gasoline are worth 125-160$ per barrel.


When the rigs are getting racked and construction workers getting laid off down stream keeps on ticking without a missed beat.

All those government projects have over years built the foundation for heavy industry in alberta.

Down stream should be the focus, it breeds industrial activity and creates far more higher paying jobs that dont dissapear with a 6 month dip in oil prices

[I_forget]

Originally Posted by dantonsen

Most oilsands and heavy oil industry is somehow hatched by government.... the two major upgraders in ftmac were government pet projects at one point in time. Husky in lloyd was some sort of government idea, nova chemicals is another one. The federal government piloted the research to unlock how to 'upgrade' bitumin in the 50's and 60's.

I think we need more down stream industry because it will create stable local demand for upstream raw materials.

A barrel of bitumin is worth 32$ a barrel of syncrude is worth 50$.... diesel and gasoline are worth 125-160$ per barrel.


When the rigs are getting racked and construction workers getting laid off down stream keeps on ticking without a missed beat.

All those government projects have over years built the foundation for heavy industry in alberta.

Down stream should be the focus, it breeds industrial activity and creates far more higher paying jobs that dont dissapear with a 6 month dip in oil prices

The future looked bright for upgraders in 2008 but we all know how that turned out. Now the focus is exporting diluted bitumen and heavy oil. I can't see things changing because the economics don't make sense for oil companies to upgrade in alberta.

[ESOXangler]

Originally Posted by I_forget

The future looked bright for upgraders in 2008 but we all know how that turned out. Now the focus is exporting diluted bitumen and heavy oil. I can't see things changing because the economics don't make sense for oil companies to upgrade in alberta.

Economics don't work hahaha. That's just what they tell you and obvieously being clueless about the industry you believe it! Get informed then participate in the discussion!

[lmtada]

Originally Posted by martinnordegg

I wonder how big of a shareholder our ex-Premier is of CNRL? Murray and Allison "in bed" with each other?

That would be interesting!!

[I_forget]

Originally Posted by ESOXangler

Economics don't work hahaha. That's just what they tell you and obvieously being clueless about the industry you believe it! Get informed then participate in the discussion!

No need for the attitude. If the economics worked youd see 8 new upgraders in the fort Saskatchewan area. They were all cancelled as well as suncor voyageur. Scotford was the only one to go ahead.

[hal53]

Originally Posted by ESOXangler

Economics don't work hahaha. That's just what they tell you and obvieously being clueless about the industry you believe it! Get informed then participate in the discussion!

don't think he is the one who needs to get informed

[levigne25]

https://www.nwrpartnership.com/project
It will be a high grade diesel more bang for your buck

[RavYak]

Originally Posted by 79ford

Last time oil bit the dust in 2008 opec cut 2.7 million bopd production..... thats why prices went back up.

The place i work for actually ramped up capex by billions in the last week and i get a 12% raise. Thankfully not all companies are leveraged up during the good times and cutting duri g the bad times.

I think down stream and midstream will do fine, its the construction and upstream section that will get hit... The raw producers.

Well good thing Alberta's economy isn't almost solely dependent on upstream production...

Not sure who you work for but they are clearly an anomaly, most companies are making significant cuts in jobs and spending.

[bdub]

http://www.theglobeandmail.com/repor...ticle22434787/


More bad news. 250 at Shell, now 1000 at Suncor.

[orca1951]

My prediction is starting to come true . Oil companies staring to lay off ,provincial and fed governments crying the blues . I wonder how many of the layoffs will be out of province employees. Also no more equipment bought from Ontario and Quebec plants. Belt tightening to come . Many pet projects will be cut . Ontario transfer payments will drop whiny Wynn will be crying to harper for more money. Prentice already talking increased taxes including sales tax not spending cuts. The GOLDEN GOOSE IS TAKING THE GOLD AND KEEPING IT AT HOME. Texas is crying for oilfield employees with experience. Thank god I was able to retire.

[ESOXangler]

Originally Posted by I_forget

No need for the attitude. If the economics worked youd see 8 new upgraders in the fort Saskatchewan area. They were all cancelled as well as suncor voyageur. Scotford was the only one to go ahead.

My apologies for the lip!

Originally Posted by hal53

don't think he is the one who needs to get informed

Hal it I assume your experience is upstream and perhaps mid stream and I won't discredit your knowledge but my experience is in downstream.

The reason they say it's not economical for upgraders in Canada boils down to one reason. Roughly ten years ago the major refineries in the gulf coast tooled up for a heavier grade oil from Mexico and Venezuela. At the time there wasn't any shale oil and Mexico was the next big thing. Then they realized our bitumin is very similar to the other crudes. Best part is they can buy our bitumin at a way better discount and upgrade it for larger profits. They will play the bitumin spread. That's why they want keystone! It will flood the market, drop its price and upgrade for maximum profits.

The reason scotford went ahead was that she'll doesn't have the retooled refineries in America like the gulf coast complex in Texas. Shell knows they'll still make a big profit without having to invest in new refining. Also why do you think cnrl is going ahead with the horizon expansion? Cause they're making plenty of cash off of it and they don't have the retooled American refineries as well.

[I_forget]

Originally Posted by ESOXangler

My apologies for the lip!



Hal it I assume your experience is upstream and perhaps mid stream and I won't discredit your knowledge but my experience is in downstream.

The reason they say it's not economical for upgraders in Canada boils down to one reason. Roughly ten years ago the major refineries in the gulf coast tooled up for a heavier grade oil from Mexico and Venezuela. At the time there wasn't any shale oil and Mexico was the next big thing. Then they realized our bitumin is very similar to the other crudes. Best part is they can buy our bitumin at a way better discount and upgrade it for larger profits. They will play the bitumin spread. That's why they want keystone! It will flood the market, drop its price and upgrade for maximum profits.

The reason scotford went ahead was that she'll doesn't have the retooled refineries in America like the gulf coast complex in Texas. Shell knows they'll still make a big profit without having to invest in new refining. Also why do you think cnrl is going ahead with the horizon expansion? Cause they're making plenty of cash off of it and they don't have the retooled American refineries as well.

You pretty much agreed with my point except you said it in 2 paragraphs. You're not the only one who works in the oil industry. I agree with everything you've said, but I'd like to add they recently finished a big refinery expansion in whiting Indiana that can accept heavy oil. Built after all the cancelled alberta upgraders. Also the horizon expansion was planned along time ago, they built the Coker supports back in 2007 in anticipation. The industry realized its cheaper to do the work anywhere but in alberta.

[norwestalta]

I was fairly young back in the eighties but today with the dollar being low and oil being low equal the same as it being at par and a barrel of oil being at $90? I would think there would be the same for foreign investors.

[martinnordegg]

Some decent gains on both oil and gas this morning. Not a runaway but at least some gains.

[Sushi]

Originally Posted by norwestalta

I was fairly young back in the eighties but today with the dollar being low and oil being low equal the same as it being at par and a barrel of oil being at $90? I would think there would be the same for foreign investors.

The low dollar helps as you suggest, but your math is out. Oil is $46.46 USD per bbl times the exchange at 1.1954 which equals $55.54 CAD. Ouch!!!!!

[dantonsen]

Originally Posted by ESOXangler

My apologies for the lip!



Hal it I assume your experience is upstream and perhaps mid stream and I won't discredit your knowledge but my experience is in downstream.

The reason they say it's not economical for upgraders in Canada boils down to one reason. Roughly ten years ago the major refineries in the gulf coast tooled up for a heavier grade oil from Mexico and Venezuela. At the time there wasn't any shale oil and Mexico was the next big thing. Then they realized our bitumin is very similar to the other crudes. Best part is they can buy our bitumin at a way better discount and upgrade it for larger profits. They will play the bitumin spread. That's why they want keystone! It will flood the market, drop its price and upgrade for maximum profits.

The reason scotford went ahead was that she'll doesn't have the retooled refineries in America like the gulf coast complex in Texas. Shell knows they'll still make a big profit without having to invest in new refining. Also why do you think cnrl is going ahead with the horizon expansion? Cause they're making plenty of cash off of it and they don't have the retooled American refineries as well.

I imagine MEG energy doesnt feel too smart selling bitumin for 30$ per barrel right now.... buy on barrel of diluent to ship 3 barrels of tar worth 90$?lol Then probably have to load it on a train too.

I imagine cnrl, suncor and syncrude are having a much better go at 52$ for syncrude and it pumps down a pipeline much better.

There is over 1 million barrels of upgrader capacity in alberta..... i imagine they arent running them for poops n giggles

Its good business and good jobs, its just the rinky stinky players in the raw bitumin business. One or two of them seem to go belly up each year

[whitetail Junkie]

Noticed that things have gotten very slow the last couple days around work,which happens this time of year once and a while,however it also could be a sign of the things to come.....it's a nice break,but I don't want it to get to slow

[kritz]

Forgive me for being ignorant in regard to this. But please explain?

Why in a economy that is going bad and people are starting to suffer because of it personally in the way of job losses, How can it be possible to have a sales tax implemented in Alberta to help the government? Is this OK with people who are looking at a tough year + already? Hard times for the government implement sales tax , after a year the government was under the microscope for spending way to much? do the people have a say in this? or do we just have to accept and go on our merry ( or not so merry) way.

[crunchiespg]

The problem is with the government is we have some much crap that we don't need.

Look at the police. When I worked there we spent $70k on a new flag for hq. We also had about 2000 cops, but only 700 or so actually go out and do police work on the streets. Not to mention the police choir, the 19 surveillance units that quite often were following the same targets and not knowing it. Plus all the other crap. There's at least half the people in that job working in a unit that solely exists so they can avoid hitting the street doing real work.

New York city had the right idea. They scrapped all the stupid units and put nearly everyone, apart from the obviously needed units like murder squad, back on the streets. Not only did crime plummet, but so did cost. No crime = no money being wasted on overtime.

In my mind, any government unit with outreach or diversity in the name should be scrapped. Also anything that didn't exist 5 years ago. We survived without it then. We can survive without it now.
I honestly think half of government jobs could be scrapped and we as a population wouldn't notice a thing.

[leeaspell]

Originally Posted by whitetail Junkie

Noticed that things have gotten very slow the last couple days around work,which happens this time of year once and a while,however it also could be a sign of the things to come.....it's a nice break,but I don't want it to get to slow

Watched 3 drilling rigs come back to town today and got racked in trucking companies yard. That makes 5 since new years in that one yard. Seems like all the trucking outfits have rigs sitting. Usually don't see that until end of March or early April

[ganderblaster]

Originally Posted by dantonsen

Most oilsands and heavy oil industry is somehow hatched by government.... the two major upgraders in ftmac were government pet projects at one point in time. Husky in lloyd was some sort of government idea, nova chemicals is another one. The federal government piloted the research to unlock how to 'upgrade' bitumin in the 50's and 60's.

I think we need more down stream industry because it will create stable local demand for upstream raw materials.

A barrel of bitumin is worth 32$ a barrel of syncrude is worth 50$.... diesel and gasoline are worth 125-160$ per barrel.


When the rigs are getting racked and construction workers getting laid off down stream keeps on ticking without a missed beat.

All those government projects have over years built the foundation for heavy industry in alberta.

Down stream should be the focus, it breeds industrial activity and creates far more higher paying jobs that dont dissapear with a 6 month dip in oil prices

Excellent post!

[zero]

Originally Posted by leeaspell

Watched 3 drilling rigs come back to town today and got racked in trucking companies yard. That makes 5 since new years in that one yard. Seems like all the trucking outfits have rigs sitting. Usually don't see that until end of March or early April

i heard bonivista racked 5 drilling rigs down south near rimby, my cousin is on one and thinks he is safe because they are drilling for gas and have a contract... like they cant just cancel a contract. they had to take a paycut from what he said today in order to stay working. I have been seeing more and more trucks going up for sale and its not even breakup.

[hayseed]

Originally Posted by leeaspell

Watched 3 drilling rigs come back to town today and got racked in trucking companies yard. That makes 5 since new years in that one yard. Seems like all the trucking outfits have rigs sitting. Usually don't see that until end of March or early April

I have four racksites and they all will be plumb full by the middle of Feb if this keeps up, startin to rack Akita # 47 tommoro, 75 loads on that one... takes up a fair bit of room. I deal with a lot of Oil Co's daily who I move iron for, she aint lookin good at all. Here we go again folks. Its not my first one, I've been moving rigs all my life and everyday is a new day and just another day in the patch.

[ranchhand]

Racking Akita 47 on Jan.14 is not good.
51% utilization in Alberta as of this week.
45% for Saskatchewan

Alot of racked iron in Gull Lake, SK. too.

[Jag_Gator]

What are things looking like in Kindersley? Spent a small amount of time working in that area this past Fall.

[hayseed]

Originally Posted by zero

i heard bonivista racked 5 drilling rigs down south near rimby, my cousin is on one and thinks he is safe because they are drilling for gas and have a contract... like they cant just cancel a contract. they had to take a paycut from what he said today in order to stay working. I have been seeing more and more trucks going up for sale and its not even breakup.

Bonavista didn't rack 5 rigs down here, I racked Horizon 31 in Drt yard in rimbey yesterday, they cut their budget back of course, but say that they will keep turnin to the right... And why not, cut their AFE in have to drill a well??

I would...

[Dr. Fish]

Originally Posted by Jag_Gator

What are things looking like in Kindersley? Spent a small amount of time working in that area this past Fall.

Still see some drilling going on, but talking with different production guys and its not going to last long. Drilling programs and budgets are being cut as well as hiring freezes.
Cant tell its slowing down by the traffic on the roads, but it will soon.

[roper1]

Originally Posted by crunchiespg

The problem is with the government is we have some much crap that we don't need.

Look at the police. When I worked there we spent $70k on a new flag for hq. We also had about 2000 cops, but only 700 or so actually go out and do police work on the streets. Not to mention the police choir, the 19 surveillance units that quite often were following the same targets and not knowing it. Plus all the other crap. There's at least half the people in that job working in a unit that solely exists so they can avoid hitting the street doing real work.

New York city had the right idea. They scrapped all the stupid units and put nearly everyone, apart from the obviously needed units like murder squad, back on the streets. Not only did crime plummet, but so did cost. No crime = no money being wasted on overtime.

In my mind, any government unit with outreach or diversity in the name should be scrapped. Also anything that didn't exist 5 years ago. We survived without it then. We can survive without it now.
I honestly think half of government jobs could be scrapped and we as a population wouldn't notice a thing.

It is so obvious why you are ex-RCMP. You make way too much sense to still be in.$70K for a new flag. And the work done by a friend or a relative! My hat is off to you.