Wednesday, May 2, 2012

Putting Things Into Perspective -- the Bakken vs the Gulf

This is the headline: BP To Invest $4 Billion In The Gulf of Mexico This Year

The Gulf is a huge geographic area.

The scuttlebutt: the oil industry is investing $4 billion in the Bakken every month!

200 rigs in the Bakken; 200+ wells being drilled each month; each well, $10 million -- just in drilling: 200 x $10 million --> $2 billion. The support services, the housing, everything else, another $1 billion to $2 billion/month. ONEOK natural gas gathering is just part of that. Pipeline activity. Crude-by-rail activity. Incredible.

So, when you see a $4 billion investment headline in the Gulf, think of that amount of money going into a few counties in western North Dakota.

3 comments:

  1. Now that is impressive!! Thanks for putting it into perspective.

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  2. You bring up a very good point Bruce. It is incredible how little wow there is in onshore oil and gas development. Probably this has to do with politics and the insane fux-environmentalist movement.

    Do you know the difference in average cost for the extraction of oil per barrel between offshore and onshore?

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    Replies
    1. I don't know the difference. I'll keep my eyes peeled for that statistic. Another reader might know.

      I know if a deep off-shore well goes badly, it gets very, very expensive, very quickly.

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