Isn't sand a little heavy to ship?
http://www.reuters.com/article/us-saudi-budget-idUSKBN0UB10D20151228
I look at this just like our congress, there will be no executive CUTS at the top. IMFO
The Saudis have shown a remarkable ability to stay, by the standards of the region, prosperous, powerful and peaceful (at least not getting their own armies engaged in conflict) for 40 years. They may reach a breaking point (corruption, inequality, jealousy of neighbors, inability to adapt), but I wouldn't count them out just yet.
Of course, they have been talking about an economy less dependent on oil ("The stone age didn't end because they ran out of stones") for almost as long and have not managed to do so....
This I find amazing:
QuoteThe plan suggests the kingdom is not counting on a major recovery of oil prices any time soon but is instead preparing for a multi-year period of cheap oil.
The talk is they are doing it (OPEC) to kill off the shale suppliers. So when they run out of oil, then we can use our shale? Something still not right.
>>shale
That might be part of it, but rivalry with Iran is the key.
>rivalry with Iran
That's what I'm reading, too. BUT some economic papers point to the parallel with cheap chinese steel and other products where these country-owned producers just ramp up production to keep the revenue stream intact. Whatever is going on, it's not being driven by good ol' capitalistic decision-making.
A bit more of an idea after a few days with my oil/gas friends.
They say it is to destroy other supplies so that the Saudis keep their market share.
The bit I did not realise is that technically it is very easy to turn off production, but very difficult to turn it back on again. Pipes need to keep flowing otherwise some oils turn to wax, and well heads need to keep the pressure going. Stop it, and you have to re-drill. Very expensive.
Consequently several people are producing at a loss right now, (It costs more to produce than they get selling it) and smaller producers are now going bust in the North Sea. One more dur to fall on the 15th jan. I guess the money dries up on that date.
If they keep this going and they can, as they have huge reserves of oil and cash, then the field will be very different in 3 years. And they will be able to demand a higher price again.
100M gallons now stored in tankers (I think we have a previous thread here showing a map of tankers)
http://www.wsj.com/articles/crude-moves-out-to-sea-as-inventories-swell-1449864003
http://www.wallstreetdaily.com/2015/12/03/oil-tankers-iran-exports/
Another article I read said Saudi production costs are around $10/barrel. If so, they can afford to play the marketshare/political game.
>very difficult to turn it back on again
Same with the steel mills
Well, seems raising revenue will be nothing to do with Iran now.
Thanks. Interesting. One of the best bits there:
QuoteIran's Oil Minister Bijan Zanganeh says Iran will wait for no one's permission, including OPEC's, to boost its oil exports. He said in September, "It's our right to return to the level of production we historically had."
Our Right? Jeeze... and a bit later:
QuoteThe country aims to regain its market share, no matter the price. Zanganeh said, "Our only responsibility here is attaining our lost share of the market, not protecting prices."
so even cheaper oil.
I understand gas is a different market, so Shale Gas will hold its price, shale oil not.
Not a well-written article, but worth a read for the numbers:
http://money.cnn.com/2015/11/24/news/oil-prices-production-costs/
Rupert, it's time to sell that dune-front retirement cottage in Riyadh
http://www.reuters.com/article/us-ceraweek-glut-idUSKCN0VV0O2
<added>
And that summer home in Aberdeen
http://www.upi.com/Business_News/Energy-Industry/2016/02/23/North-Sea-fading-industry-body-warns/3261456225251/
Damn, Too late to sell.
I hear Aberdeen is struggling. Friends in London in the oil industry are struggling. And in Norway.
Funny, I think Norway are looking to replace oil too. What do you think they will try to do to make money?
Financial services? Electronics? Sweat shops? Tourism?
It wont be easy for any of them, any market they go into already has strong players.
The coming disruption in several currently fundamental industries --energy distribution, media distribution, & communications come to mind, but there are others-- is going to rock our world. There's been a worldwide movement toward urbanization for centuries now, but I could make an argument that being able to generate nearly unlimited amount of nearly free energy coupled with dirt-cheap, ubiquitous communication might reverse that. And, if I can lower my cost of living by extraordinary amounts, do I care quite so much about what I'm going to be doing to make a dollar?
If I were advising Norway, or even the Saudis, I'd be pouring my remaining money into developing beyond-state-of-the-art medical tourism.
Medical Tourism.. ah yes. Like The Netherlands .. Or Not quite :)
http://www.dignityindying.org.uk/assisted-dying/assisted-dying-overseas/
sorry, a bit black.. must be my mood.
>black
Welcome to my world.
I was thinking Singapore. (It's one of my sidebar interests in Hanoi. Need to post that in the business agenda.)
https://www.stb.gov.sg/industries/healthcare
>medical tourism
Bingo. Doesn't have to be beyond state of the art, just state of the art and enough cheaper than US medical and you got something. Depends on insurance industry and treatment pre approval: "we won't pay for $400K surgery in US, but if you fly to Oslo you can get the same surgery for $200K and we'll pay."
>just state of the art and enough cheaper
Not be be discriminating against whites, it needs Asians. DE or Scans would be second choice.
<added>
state-of-the-art
cheap
DE or Scans
Pick 2
Yes they are looking into promoting business (the building of the finance district alone will bring in a huge chunk of revenue) and reduce dependency by increasing employment with saudization (benefits are very good out here). There is a lot of opportunity here so business growth will continue even with the difficulties that come with growing a business here.
It is true they are also looking at starting some taxation on sales which will be unpopular as many products are more expensive here due to the lack of manufacturing. However, I wouldn't discount them yet. What a lot of people don't realise is that they have cherry picked oil traditionally, however, they have massive resources of other raw materials which they plan to upscale the mining of. I don't think the Saudi Royal Family will be going poor any time soon!
'My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel'
I feel like that is particularly true for Dubai, it just feels like it will be a wasteland in a generation or two.
>camel
http://www.bloomberg.com/news/articles/2016-09-27/saudi-stocks-drop-on-bets-austerity-to-hurt-service-providers
>his son will drive a Land Rover, but his son will ride a camel
U.S. crude oil output hits 11 million barrels per day for first time ever
https://www.reuters.com/article/us-usa-oil-eia/u-s-crude-stocks-up-production-hits-11-million-barrels-per-day-eia-idUSKBN1K81XT
Quote from: rcjordan on February 23, 2016, 06:06:58 PM
I could make an argument that being able to generate nearly unlimited amount of nearly free energy coupled with dirt-cheap, ubiquitous communication might reverse that. And, if I can lower my cost of living by extraordinary amounts, do I care quite so much about what I'm going to be doing to make a dollar?
I've thought this way about the web for ages. Even the big players mention it, yet they keep hiring from the valley.
https://www.recode.net/2018/7/18/17575158/mark-zuckerberg-facebook-interview-full-transcript-kara-swisher
Quote from: Mark ZuckerburgWe've talked a lot about the social aspects of all of this, but I think one of the biggest issues economically today is that opportunity isn't evenly distributed. You get all these people have to move to cities, and then the cities get to be way too expensive, and if you have a technology like VR where you can be present anywhere but live where you choose to, then I think that that can be really profound.
There're really only a few solutions to this. Historically, cities have grown to be bigger by building better physical infrastructure. There'll be some amount of that. I mean, I think things like hyperloops and things like that can extend the suburbs, could be quite interesting, but I have to believe that, we're here in 2018, it's much cheaper and easier to move bits around than it is atoms. It strikes me that something like VR or AR, or even video conferencing on the path to that, has to be a more likely part of the solution.
There are private equity firms which focus almost exclusively on buying embedded mission-critical software companies & enhancing margins through a combination of price hikes to their customers & then moving employment out of the bubble areas of the economy to cheaper locations.
https://www.wsj.com/articles/billionaires-secret-buyout-formula-110-instructions-and-an-intelligence-test-1531151197
>his son will ride a camel
Gulf's financial wealth could be over in 15 years: IMF - Reuters
https://www.reuters.com/article/us-gulf-economy-imf/gulfs-financial-wealth-could-be-over-in-15-years-imf-idUSKBN2002HZ
I wonder how this has changed now.
I'm far from an expert on oil production, but it might be that after this economic downturn does its damage SA may actually be in a better position than before CV19. Much of the production in North America and Russia will be capped off due to lack of profit. The SA's big advantages are that their cost per unit is much lower and their oil quality is much higher than the rest of the world.
>his son will ride a camel
IMF predicts worst Mideast downturn in half century
https://techxplore.com/news/2020-07-imf-worst-mideast-downturn-century.html
Twilight of an era - The end of the Arab world's oil age is nigh | The Economist
https://www.economist.com/middle-east-and-africa/2020/07/18/the-end-of-the-arab-worlds-oil-age-is-nigh
Oil nations tipped for political instability if fossil fuels abandoned
https://www.cnbc.com/2021/03/26/oil-nations-tipped-for-political-instability-if-fossil-fuels-abandoned.html
> instability
I know what they mean, except none of them are that stable to begin with.
We think in terms of the Middle East, but what happens to -say- Russia when Gazprom starts sucking air?
"There would be fewer grounds, in theory, to justify military bases in the Middle East or those periodic calls for regime change and all-out conflict."
Redrawing the geopolitical map for a post-oil world | Al Jazeera
https://www.aljazeera.com/program/counting-the-cost/2021/5/10/redrawing-the-geopolitical-map-for-a-post-oil-world