Oil 101 Notes History

Why do they do Reservoir Management

• To stop oil being wasted as over use can lead to less yield.

How did Standard Oil Destroy Comapanies

Dropping Prices in Regions, undercutting transfer costs

Value of Barrel of Oil

42 us gallons

What is Operational Tolerance

Amount that can evaporate

Oil Major use

Transportation

6 Majors

Shell, Exoon Mobil, Total, Chevron, BP

How does a Concession Work

Agreement between NOC and major 50/50 profit sharing, postal price is US gulf coast price.

What is Net back Pricing

Links oil price to transparent market price

OPEC members

UAE, Qatar, Saudi, Kuwait, Iran, Iraq, Venezuela, Libya, Algeria, Nigeria, Angola, Ecuador

what is the strategic petroleum reserve

energy reserve kept in US started by LBJ for emergency purposes

What caused second oil shock of 1978

Shah deposed - Supply falls - Price rises

what is Demand Destruction

oil price falls as for the same end good less oil required

Relationship between GDP percapita and Oil

incresed GDP per capita = increased consumption

What did Saudi do in 1985 in terms of Netback pricing

they linked the price of thier crude to finished product prices e,g Gas in US

2 main exchanges for futures

New york mercantile exchange, ICR

what is formula netback pricing

links crude oil price to