Cost of oil production by country. The cost of oil in the world

Oil, tantamount to dollar and gold, is one of the most powerful levers for regulating the economy. For promising oil fields, wars between states are constantly waged, some government apparatuses are replaced by others. Energy in its structure belongs to the category of country-forming industries, since a breakthrough in this direction leads to the dawn in most areas of the country. The more a country is capable of producing “black gold”, the lower the cost of its extraction, the higher is the state’s chance of a prosperous economy and a strong position in the world market.

Cost of resource extraction by country

The cost of oil production varies significantly between countries. For example, in Saudi Arabia, the cost of fuel production does not exceed $ 10 per barrel. In Russia, this indicator varies from 30 to 40 dollars. In America, this value in some regions reaches the mark of 60-70 dollars. There is a separate situation with Canada. When producing oil in the sands, it is necessary to spend about 120-150 dollars per barrel.

Does the situation jeopardize the “shale revolution” in the US?

The situation with oil market prices and the cost of oil production by country, especially in the United States, according to a fairly large number of experts, jeopardizes the “shale revolution”. If the price per barrel of oil does not rise closer to the mark of $ 80 in the near future, it will simply be unprofitable to produce it. Nobody wants to work to the detriment of oneself. The low cost of black gold and the high cost of oil development work pave the way for countries such as India and China to enter the world market . If the cost of energy drops to $ 30, a major player such as Russia will be squeezed out of the market. The only way out of this situation is to start the sale of oil by countries in their own currency without reference to the dollar.

The opposite side of the coin is that the publicly announced cost of oil production by country is not actual. New mineral deposits are systematically developed, and technologies for its extraction are improved and cheapened. Many countries can withstand much higher pressures from lower global fuel prices.

Table of the cost of developing a barrel of oil by country

Let us examine the table of the cost of a barrel of oil in each of the producing states of the world.

From the table it is quite obvious that it is Saudi Arabia that is most confident in the international oil market. And it is she who is an ardent participant in OPEC, which categorically refuses to reduce oil production. The fall in prices, which horrifies many states, does not scare her. Many analysts admit that by such behavior the country simply wants to oust its main competitors from the world stage.

The table shows data that shows the cost of a barrel of oil, excluding taxes to the state treasury and without the cost of excise taxes, other minor expenses. Here you can focus on the fact that in Russia the cost of oil is formed by 55% of taxes. In America, this industry is practically tax-free, and therefore, private companies have excellent development prospects and excellent conditions for entering the international market. State support plays a big role.

Details on the cost of oil in the United States

The cost of oil in the United States varies significantly depending on the place of production and the specifics of the used production technology. So, back in 2012, America’s major producing companies spent about $ 100 on the shale oil technology used. In 2015, this indicator stopped at around $ 30. Representatives of private oil companies unofficially declare that, thanks to the systematic and long-term improvement of oil production technologies, they managed to reach the figure of 22 dollars per barrel. Maintenance of active oil production facilities is half the cost. Find out exactly what the cost of a barrel of oil in America is not possible. Everything will be obvious with time, as the situation in the oil market develops.

What are the prospects for the USA?

Assessing the cost of producing a barrel of oil in America, many experts do not cease to wonder what specific indicator of prices in the world market fuel production will be unprofitable for the state. According to the statistics of one of the largest agencies, only 4% of the oil produced currently remains beyond profitability. Large deposits in North Dakota are successfully operating and continue to develop today. In addition, new territories are constantly being explored and potential deposits evaluated. The most productive region in the United States is Mackenzie County, where the cost of a barrel of oil does not rise above $ 28. Great influence on US policy has a strategic fuel supply. According to preliminary estimates, to date, it is already enough to provide all the needs of the state for the next three years.

How much does oil production in Russia cost?

The cost of oil in Russia is formed not only due to the specifics of its production, most of it is justified by the accompanying costs. The entire volume of Rosneft's revenue can be arbitrarily indicated by a figure of 100%. At the same time, 55% of revenues are allocated to the state for payment of excise taxes, mineral extraction tax and customs duties. 10% of the total income is spent on preliminary exploration of fields, on the installation of oil production equipment, on the search for customers and the conclusion of contracts with them. Add to the general expense item 8.4% of the cost of a barrel for delivery to consumers and 7.6% for amortization of all Rosneft resources (machinery, buildings, equipment, drilling rigs, etc.). The company, in addition to energy production, also buys it from third-party enterprises, pays for its processing at least 8.6% of revenue. Net profit after the sale of "black gold" is not more than 10%.

The cost of oil in Russia, despite the generally accepted indicator, varying in the range from $ 12 to 25, is much larger. If we take into account the cost of renting land or buying the rights to use it, the cost of building an infrastructure that is optimal for fuel production, we get a figure of around $ 70 per barrel, which is an order of magnitude more than America.

Why do not OPEC countries reduce oil production and are content with low prices?

The cost of oil in Saudi Arabia is the lowest in the world. It ranges from 4 to 5 dollars. This allows the state to withstand significant price drops in the global market. Failure to reduce energy production led to an active drop in the cost of "black gold". This decision is justified by the fact that not only Saudi Arabia, but also all OPEC countries are completely dependent on the oil industry. The only state that does not depend on fuel production is Indonesia, whose profits are generated by the tourism industry, the gas industry and the sawmill. All other OPEC members survive to a greater or lesser extent thanks to oil. The level of their dependence varies from 48 to 97%. This suggests the conclusion: given the low cost of oil in different countries participating in the community, they do not suffer from the situation on the world market. By reducing production, they will hit their own economy. Decisions are made from the opposite: the greater the extraction of fuel, the better the country itself and its people.

Why is the demand for oil rising and the price of oil falling?

In the past few years, the demand for oil in the world has increased several times. This was facilitated by the development of the economies of China and India. High demand indicators led to the fact that in mid-summer 2014 the price of oil peaked at $ 117. The situation did not become statistical; by mid-autumn, the price of a barrel had slipped to $ 60. At the same time, “black gold” as it was, remained in demand. An interesting fact is that the drop in fuel prices has no clear substantiated economic reasons, states continue to develop actively, their needs are growing. In China alone, over the past year, about 30 million cars have been produced. It is also interesting that the cost of oil production in countries has not changed.

Supply growth surpassed demand growth

As interest in oil on the market grew, the reason for the fall in prices was most likely an increase in the volume of offers that exceeded the jumped demand. The rate of extraction of energy resources is actively increasing in Saudi Arabia and in the USA. The imprint on the formation of oil prices is imposed by the political situation and the conflict between Russia and Ukraine. History shows that any changes in geopolitics in a significant region of the world lead to an increase in energy prices.

Reducing the cost of oil production in the world - no additional income

Modernization of oil production technology has led to a reduction in the cost of fuel. In theory, exporting states should have had a good profit from the current situation. In contrast to all expectations, the cost of fuel in the world market has collapsed. The development of the industry and the reduction in the cost of oil development led to losses. There are several reasons for this:

• Removing sanctions from Iraq, increasing the share of its fuel in the international market.
• Restoration of Libya and its oil industry.
• Deliveries to the international market of contraband oil at low prices.
• Increase in unconventional oil production (shale, sandy and heavy).

Oil production margin

The fall in value cannot be carried out indefinitely. As soon as the cost of oil in the world is almost equal to the cost of fuel in the market, a reversal can be expected. The fact that each state has its own fixed price for the extraction of fuel works here. Changes in prices have a global impact on state revenue and on the profitability of oil production. In fact, the Gulf states spend the least on fuel. This is due to the small depth of the fossil and the close proximity of the fuel development area to the final consumer. The costs of building and maintaining technology are minimal. America has the highest cost of oil production in the world , as it works exclusively with shale minerals. It is very difficult and financially difficult to get them. Almost the whole world abandoned such technology. According to analysts, the profitability of such fuel will remain at the level if the price of a barrel on the world market does not fall below $ 75. In fact, the situation is different: despite the fact that prices have gone beyond the figure of $ 50, America continues to actively develop mineral deposits.

Instead of a conclusion

The cost of oil in Russia is much lower than in America. Nevertheless, the United States continues to increase fuel production, which experts directly associate with political conflicts in the modern world. So, if in October 2014 the volume of fuel production was equal to 8.9 million barrels, then in 2015 it is planned to raise it to 9.4 million. It is underwater currents that determine the situation on the world oil market, economic factors this time are completely absent.