July 28, 2009 / 9:27 AM / 11 years ago

FACTBOX-Oil production cost estimates by country

 July 28 (Reuters) - 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.
 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)

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