I hate LinkedIn.
I once went to a professional development seminar led by a dude with a "PMHR in Human Resources Development, which is for those of you who don't know, basically what a PE is to engineers."
- Bullshit HR Guy with Bullshit Certification
(The seminar sucked )
Rig count has collapsed, driving around Midland yards I didn't even know were there are suddenly chocked full of rigs.
The news has been full of sh*t stories about how the oil industry is in "terminal decline" and how the only reason WTI is in $30/bbl is
cause OPEC has been merciful.
I've been thinking about all of this quite alot - I've had time - and it is my livelihood. Is everything that bad?
The oil industries very worst characteristic is it's goldfish memory. I remember it being 2012 and being told emphatically that I'd never see WTI below $90/bbl in my lifetime.
It's been really ****ing bad before: 1986 and honestly from then on it continued to be pretty sh*t. Oil prices didn't budge upward until 2003. And yeah, that was before I was born. But I've bullshitted for hours with people who survived that decade so partial credit.
1999 was the year that the world claimed to be 'drowning in oil'. Many universities shuttered their petroleum engineering programs. Anyone who wanted a career in oil and gas found that it involved cold calling and taking a tough field service job to get their foot in the door.
Everyone is freaking out about BP taking a $17.5 billion loss write down because they've changed their long term oil price outlook to $55/bbl. Boo hoo.
Anyone consider that BP is an exceptionally shit company who might be losing money because it's a shit company who made shit investments?
I'm not talking about Houston based bean counters and 'energy analyst. If you've ever done work for BP...you know. They are a poorly managed company. Fight me.
It was a company that didn't bother to run a bond log on a iffy offshore super deep well with an iffy completion.
Am I biased because I run bond longs? Sure. But I've also seen a shit ton of bad cement jobs which is the reason bond logs are f*cking standard and common because as BP taught us, well integrity matters. I've seen the aftermath of a wellhead that separated from a casing bowl during a frac. Apparently it levitated 15 feet in the air and came crashing down. Company was super nervous about the cement job on the other 3 wells. I stand by my opinion that bond logs are important and BP is a stupid company for not knowing that.
And yes, I've logged wells which only have subtle hints of cement and have me wondering if it was actually cemented. I've handed said cementless bond log to company men only for them to say "Houston probably won't give a shit".
Here's a few things to consider:
- Saudi Arabia actually can't afford to fund a price war. They really really can't. Plus they've got a young dude who wants to cash out Saudi Aramco so he can build a science fiction city in the desert. Saudis are *ssholes but fortunately for us they are *ssholes who desperately need cash.
- The world moves on diesel and that just isn't going change. Anything you've eaten recently is courtesy of diesel, we all but eat oil and gas. We live in a fossil fueled civilization. I don't care what green energy propoganda says. Unless society shrinks by >50% and 90% of those who remain migrate to prime agricultural to exclusively farm and raise lifestocks can we go 100% green with not a watt of fossil fuel derived energy consumed or so much as a plastic bag in sight.
This fact is inconvenient to democrats driving their plastic cars on asphalt paved roads in Seattle. Prove me wrong. The current communist zeitgeist of climate change doesn't make that fact a popular one but it also doesn't make it any less true
- While the demand for transporation fuels has somewhat plateaued, the demand for petrochemicals is on the rise. Rising former third world countries are demanding more energy. It will continue to drive prices up.
- Significant oil producing countries have suffered years of unrest and political upheaval which will and has significantly affected investment and drilling activity and their ability to continue exporting crude oil. Think: Venezuela, Iran, Iraq and Libya. Over the last 5 years the only reasons their crude production disruptions have not done more to disrupt and drive up global oil prices is the oil produced from frac technology.
Covid-19 and the currently unfolding economic recession/depression have done grave damage to oil and gas. In the short term, I see nothing but rigs being stacked and layoffs. In the longer term I see the seeds of $80+ oils.
Keep your stick on the ice. Don't listen to idiot advice.