let’s Start with our country. Oil production in Russia is not cheap in the first place, due to relatively high fiscal burden. According to Rosstat, in 2019, the average cost per ton of oil produced in Russia is 230,6 dollar, which is equal to 31.45 USD per barrel.
Most popular now a study on the cost of production made in the past year since IHS company, Saudi Aramco, gives slightly higher numbers for Russia, but only because in their calculation took into account all taxes and the excise tax and a mandatory 10% profit. Taking into account these supplements the official statistics of Rosstat and the results of the study IHS Markit quite comparable. According to the version of IHS, the profitability of oil production in Russia for land projects is $ 42 per barrel, and for marine – $ 44 per barrel.
Such high numbers is not a reason to tear his hair and declare that, at the current quotations of the barrel of all oil production in Russia is unprofitable. First, it is the average temperature in the hospital. More than half of production of “black gold” in Russia falls under various benefits and tax incentives, with the result that costs can be reduced more than twice.
second, the calculations basing on the launching field, which should pay back initial capital costs for 10 years until 2030. The largest oil field in Russia was put into development long enough and have already managed to recoup the money on their development. Therefore, even taking into account the need for new investment to maintain production, current oil production in our country overall is much cheaper than indicated in the study by IHS. Without considering new investments and taxes, the cost of production in large parts of existing fields in Russia is estimated at about $ 10 per barrel.
the above does not negate that the cost of production in Russia is growing every year due to the fact that jobs are being more and more difficult reserves. A clear indication that by mid-2019 under the privileges fell almost 58% of deposits. According to Finance Ministry estimates, by 2024, their proportion will increase to 67.5%.
we Now turn to the competitors. The lowest cost of oil production in the middle East, countries of the Persian Gulf – less than $ 20 per barrel. On existing fields, Saudi Arabia’s break-even production possible at prices below $ 10 per barrel, new – $ 17 per barrel. Thanks to this low cost of production of the oil Kingdom in the period between the two transactions OPEC+ handed out right and left huge discounts on their “black gold”. The dependence of the budget of Saudi Arabia from the oil industry for almost 70%, so low prices of raw materials for the Kingdom is very painful, although ��and the level of production costs.
a Separate conversation about the biggest oil producer – the United States. According to the calculations of IHS, Markit, new offshore projects in the Gulf of Mexico break-even at 40 dollars per barrel, and oil shale – at 49 dollars. Here, as in the case of Russia, many nuances. The cost of production on many existing offshore projects, the U.S. is estimated at 20-25 dollars per barrel.
And about the cost of shale oil production to say and do something difficult. It was thought that new production technologies have lowered it to $ 30 per barrel. But recent events, when after the fall of prices below $ 40 per barrel oil production in the U.S. in March-April reduced naturally by 1.2 million barrels per day, suggests that the break-even oil shale mining starts at prices of about $ 40 per barrel. However, given the very active state support of the oil industry and the arrival of the slate industry giant transnational corporations (ExxonMobile, Royal Dutch Shell, Chevron and others), most likely at today’s oil prices curtail production the smaller players. The largest companies will be able to survive a period of low prices. Plus it also works to increase shale production in a relatively short time.
