http://briansullivan.blogs.foxbusiness.com/2008/09/06/lukoils-sub-5-buck-oil/
Lukoil’s Sub-$5 Buck Oil
By Brian Sullivan
We know that oil producers around the globe are making big profits with crude trading above $100 per barrel. What we didn’t know - until now - was exactly how much. The numbers are staggering.
Friday we interviewed Lukoil’s (LUKOY) Head of Business Strategy, Andrei Gaidamaka. I asked him what Lukoil’s cost-per-barrel is, not expecting an answer. But we got one. And that answer was $4.30. Let’s repeat: 4-dollars and thirty cents per barrel. Admittedly that doesn’t include transport or taxes (the Russian government takes its own huge “windfall” profits tax at anything above $30 per barrel), but to think that its cost is below $5 a barrel is truly incredible.
Given this, and that Lukoil’s efficiencies are nowhere near Saudi Aramco’s (and probably a higher cost of labor as well), its feasible to believe that Saudi producers have costs below $2 or $3 bucks per barrel. They could be making more than $100 a barrel in profit. Staggering.
The Lukoil interview is below:
(This is a flash video, and I couldn't get the link to post here. You'll have to click through to the actual story to see the video interview - Dennis)
Lukoil’s Sub-$5 Buck Oil
By Brian Sullivan
We know that oil producers around the globe are making big profits with crude trading above $100 per barrel. What we didn’t know - until now - was exactly how much. The numbers are staggering.
Friday we interviewed Lukoil’s (LUKOY) Head of Business Strategy, Andrei Gaidamaka. I asked him what Lukoil’s cost-per-barrel is, not expecting an answer. But we got one. And that answer was $4.30. Let’s repeat: 4-dollars and thirty cents per barrel. Admittedly that doesn’t include transport or taxes (the Russian government takes its own huge “windfall” profits tax at anything above $30 per barrel), but to think that its cost is below $5 a barrel is truly incredible.
Given this, and that Lukoil’s efficiencies are nowhere near Saudi Aramco’s (and probably a higher cost of labor as well), its feasible to believe that Saudi producers have costs below $2 or $3 bucks per barrel. They could be making more than $100 a barrel in profit. Staggering.
The Lukoil interview is below:
(This is a flash video, and I couldn't get the link to post here. You'll have to click through to the actual story to see the video interview - Dennis)