July 28 The cost of pumping a barrel of oil out
of the ground depends on a variety of factors, including the
size and accesibility of the field.
Oil companies are often reluctant to give precise cost
The following provides estimates of the cost of running a
field for OPEC members and other individual countries, obtained
from traders and industry analysts.
It also gives the International Energy Agency's more general
assessment of costs for the oil-producing regions of the world.
ESTIMATES BY COUNTRY
Saudi Arabian crude is the cheapest in the world to extract
because of its location near the surface of the desert and the
size of the fields, which allow economies of scale.
The operating cost (stripping out capital expenditure) of
extracting a barrel in Saudi Arabia has been estimated to be
around $1-$2, and the total cost (including capital expenditure)
$4-$6 a barrel.
Extraction of Iraqi oil is in theory also very cheap,
although there are political and security challenges.
Industry analysts estimated total costs at between $4-6,
although they said some fields could be more expensive.
In the United Arab Emirates, operating and capital costs
combined were estimated to be around $7 a barrel.
Oil extraction from mature and deep water offshore fields is
much more expensive than from the accessible hydrocarbon
territory of the Gulf.
In Nigeria, production in ultra-deep water fields can reach
$30 a barrel compared with onshore costs of around $15,
according to analysts.
In offshore Angola, it costs around $40 to produce one
barrel of oil (operating and capital costs), traders told
Operating and capital costs in Algeria, Iran, Libya, Oman
and Qatar were all estimated to be around $10-15 a barrel.
In Kazakhstan, where reserves are big and largely
unexploited, the cost to produce a barrel for medium-sized
producers, such as Kazakh state oil company KazMunaiGas [KMG.UL]
is around $15-18, and for Kazakhstan's largest operator
Tengizchevroil, it is about $10-12, the Kazakh-British Chamber
of Commerce said.
Analysts said these were operating costs, probably including
transport, as it is expensive to move the oil to distant ports.
In Venezuela, where fields tend to be mature and small and
it is difficult to make new discoveries, production costs were
generally estimated at $20 a barrel (operating and capital
Those figures do not include the more expensive Orinoco oil
from the country's sand deposits.
One analyst said the extraction of one barrel of Orinoco was
around $30 (operating and capital costs).
Ecuador, where fields are also small and the distance to
ports add to costs, analysts pegged extraction costs at $20 a
In the mature British North Sea, where the remaining oil is
difficult to access, the industry body Oil & Gas UK said the
break-even cost was around $50 a barrel. One analyst said
operating and capital costs were $30-40 a barrel.
The International Energy Agency (IEA) -- in its latest
November 2008 world energy outlook -- gave the following
estimates for the all-in costs of producing oil from various
types of hydrocarbons in different parts of the world:
Oilfields Estimated Production
/source Costs ($ 2008)
Mideast/N.Africa oilfields 6 - 28
Other conventional oilfields 6 - 39
CO2 enhanced oil recovery 30 - 80
Deep/ultra-deep-water oilfields 32 - 65
Enhanced oil recovery 32 - 82
Arctic oilfields 32 - 100
Heavy oil/bitumen 32 - 68
Oil shales 52 - 113
Gas to liquids 38 - 113
Coal to liquids 60 - 113
Source: International Energy Agency World Energy Outlook 2008
(Compiled by Martina Fuchs, Christopher Johnson, Karen Norton,
Joe Brock and Barbara Lewis, Editing by James Jukwey)