Heinz Blasnik- Views You Can Use Message Board

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Strategies & Market Trends : Heinz Blasnik- Views You Can Use

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To: GraceZ who wrote (249)	4/19/2003 1:37:35 AM
From: EL KABONG!!!	Read Replies (1) of 4912

Grace, I'm neither enthusiastic about nor trusting of the sources, but for what it's worth... bradynet.com Wed Mar 17 11:52:50 EST 1999 Heavy: Statistic of the Day: Russia has the highest oil production cost (including exploration and development) on the planet at $14 per barrel, vs. $2 for the Gulph, $6 for Indonesia, $7 for Nigeria, $7 for Vene, about $9ish for Mexico, and $10 for the US. eurasianet.org ... ... ... One of Yukos' other noticeable feats following the restructuring was slashing production costs of oil per barrel an impressive two-thirds. While lowering output costs is important to any oil company, it is often a double-edged sword in Russia because taxes can increase significantly if a firm appears to be operating at a noticeably low production of oil price per barrel. "We are always very vague about our production costs because production costs means taxes. If production costs are too low then taxes are too high," Khodorkovsky told Hart's E&P in an exclusive interview aboard his company jet bound for western Siberia. Khodorkovsky said companies work toward lowering the cost of oil output but seldom publicize any progress they may make for fear of a tax hike being imposed. However, Khodorkovsky eventually admitted Yukos' oil production cost is about $3.7/bbl. I recall reading somewhere that the cost of producing a barrel of oil was higher in Russia than anywhere else in the world. Compounding their high cost problem was that the costs of producing black gold in winter were nearly twice as high as equivalent production costs in the summer months. I presume the higher costs in winter had something to do with the extreme cold temperatures in parts of Russia, but that's really a guess on my part, as I can't recall if the article stated why or not. KJC

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