Per barrel costs

Per barrel costs (costs per barrel of development production) are useful when production is the constraint on a project, or when making technical comparisons between projects in the same geographical area. 

It is often more useful to use the discounted values, to allow for the time effect of money, hence 

Within the same geographical area (e.g. water depth, weather conditions, distance to shore, reservoir setting) this is a useful tool for comparing projects of different sizes. If the indicators vary significantly then the reasons should be sought. 

As discussed in Section 13.2, the technical, fiscal and economic data gathered to construct a project cashflow carry uncertainty. An economic base case is constructed using, for example, the most likely values of production profile and the 50/50 cost estimates, along with the best estimate of future oil prices and the anticipated production agreement and fiscal system. 

---

Synthetic-based muds are mineral oil muds in which the oil phase has been replaced with a synthetic fluid, such as ether, ester, PAO, or linear alkylbenzene, and are available from major mud companies. The mud selection process is based on the mud s technical performance, environmental impact, and financial impact. Synthetic muds are expensive. Two factors influence the direct cost unit or per-barrel cost and mud losses. Synthetic muds are the technical equivalent of oil-based muds when drilling intermediate hole sections. They are technically superior to all water-based systems when drilling reactive shales in directional wells. However, with efficient solids-control equipment, optimized drilling, and good housekeeping practices, the cost of the synthetic mud can be brought to a level comparable with oil-based mud [1308]. 

The business drivers of the lube business are for increased production to reduce per barrel costs, to reduce operating expense (OPEX) and for higher quality products to meet ever-increasing product quality standards. 

In Section 13.2, it was suggested that opex is estimated at the development planning stage based upon a percentage of cumulafive capex (fixed opex) plus a cosf per barrel of hydrocarbon production (variable opex). This method has been widely applied, with the percentages and cost per barrel values based on previous experience in the area. One obvious flaw in this method is that as oil production declines, so does the estimate of opex, which is nof the common experience as equipment ages it requires more maintenance and breaks down more frequently. 

A considerable percentage (40% - 85%) of hydrocarbons are typically not recovered through primary drive mechanisms, or by common supplementary recovery methods such as water flood and gas injection. This is particularly true of oil fields. Part of the oil that remains after primary development is recoverable through enhanced oil recovery (EOR) methods and can potentially slow down the decline period. Unfortunately the cost per barrel of most EOR methods is considerably higher than the cost of conventional recovery techniques, so the application of EOR is generally much more sensitive to oil price. 

NRC estimated costs of alternative fuels, including incremental vehicle costs, compared to oil at 20 per barrel. 

Cures, the equipment is made of vei y expensive high-alloy steels. Energy and hydrogen costs result in high operating costs, much higher per barrel of feed than the FCC unit. 

A petroleum refinery has two crude oil feeds available. The first crude (Crude 1) is high-quality feed and costs 30 per barrel (1 barrel = 42 US gallons). The second crude (Crude 2) is a low-quality feed and costs 20 per barrel. The crude oil is separated into gasoline, diesel, jet fuel and fuel oil. The percent yield of each of these products that can be obtained from Crude 1 and Crude 2 are listed in Table 3.6, together with maximum allowable production flowrates of the products in barrels per day and processing costs. 

At a sales price of 13.00 per barrel, the value of the incremental oil produced by the TFSA was between 94,900.00 and 117,000.00. This revenue was generated at a chemical cost of between 1.93 and 3.87 per incremental barrel. Cumulative incremental oil production, shown in Figure 5, indicates that the volume of incremental oil produced reached a constant and maximum value 18 months after the pilot was started. Of the total incremental oil recovered, 37.5 % was produced in the first six months of the pilot and 81.25 % was produced by the end of the... 

You are the manufacturer of PCl3, which you sell in barrels at a rate of P barrels per day. The cost per barrel produced is... 

Constituent Maximum quantity available (bbl/day) Cost per barrel ( )... 

Estimates of capital costs of GTL plants display a wide range while the EIA (2006) indicates capital costs at US 25 000 45 000 per barrel of daily capacity, depending on production scale and site selection, the IEA (2006) reports capital costs of GTL plants currently completed or under construction with US 84 000 per barrel. By comparison, the costs of a conventional refinery are around 15 000 per barrel per day. Gas-to-liquid is assumed profitable when crude oil prices exceed 25 per barrel and natural gas prices are in the range of 0.5-1.0/GJ (EIA, 2006). The economics of GTL are extremely sensitive to the cost of natural gas. 

Still-gauging methods are adequate for only the largest leaks. The accuracy of most tank-installed liquid level gauges is usually /s in. at best. A product loss reflected by a 0.062-in. level drop for a 100-ft-diameter tank translates to a 306 gal/day leak. If this Vi6-in. drop in product level is not discernible from the masking effects of fluid expansion, losses in excess of 2650 barrels annually will go undetected. At, for example, 20 per barrel, this loss amounts to over 53,000 for a single tank. Most importantly, the associated liability risks of groundwater contamination could involve much greater potential costs. 

The economics of biomass conversion needs to be considered as well, for the production costs of biofuels typically amount to 60-120 per barrel of oil equivalent. Influential factors include the cost of the biomass at the plant gate, the conversion efficiency, the scale of the process and the value of the product (e.g., fuel, electricity or chemicals). 

The estimated operating costs were 6510/m of treated waste. This estimate inclnded binder costs of 85 cents per pound the labor costs eqnivalent to 4 fnll-time technicians at 70 per honr and the cost of the 55-gal barrels at 100 per barrel nsed to mix, cnre, store, and dispose of the waste. The operating costs of the baseline cement stabilization process are lower at 4300/m of treated waste (D20934H, p. 15). 

In 1997, the vendor stated that the costs of processing mixed Resource Conservation and Recovery Act (RCRA)/low-level wastes and Toxic Substances Control Act (TSCA)/low-level wastes were projected between 50 and 100 per barrel for drummed waste and between 100 and 200 per ton for bulk wastes. The theoretical wastes contained 30% moisture and consisted mainly of contaminated soils and mud (D17472V, p. 2). 

Unfortunately, the tar sands industry became something of a victim of its own success. Billions of dollars were poured into new facilities to mine and convert the sands to usable cmde. Thousands of people were hired and moved to remote areas where workers were scarce, and housing and other services were even scarcer. Costs soared quickly, to the extent that the newest tar sands operations need lofty market values per barrel of oil in order to operate profitably. 

---