Something Lost In Translation -- June 9, 2016

I have no idea what to make of this. From Rigzone:

• a new gas-to-liquids (GTL) joint venture between Chevron/Nigerian government is coming on line
• originally projected to cost about $3 billion
• "astronomical" overrun when current costs are shown to be $10.3 billion
• Sasol Ltd, the world's biggest producer of fuel from coal, had a 27.5% stake in this venture, but sold their stake to Chevron in 2008 after the project's cost more than doubled
• will produce 33,000 bbls per day, mostly synthetic diesel

BOE calculations:

• if a bbl holds 42 gallons, that works out to 1,400,000 gallons/daily
• at $3.00/gallon = $4 million daily sales (not profit)
• $10 billion / $4 million = 2,500 days or about 7 years of sales to pay for plant
• of course, a dozen other factors are not being considered

My hunch with regard to original estimate of $3 billion "skyrocketing" to $10 billion was simply something "lost in translation."