Scottish oil heading for $41 billion profit in 2018 alone, BBC Scotland? Yes, yes, BUT, BUT what about rising costs?

On BBC Scotland at 06:28am today and sneaked in at end after the cheery stuff about the SNP conference:

‘The oil and gas industry’s being warned to keep an eye on rising costs as it recovers from the oil price crash. The findings from the Oil & Gas Authority showed expenditure of £6.9 billion, 2% higher than the previous year. Experts claimed this shows the recent years of sharp cost reductions are over. However, it’s still significantly lower than the peak of 2014. The unit of cost per barrel of oil also rose by 2% last year.’

I don’t suppose there was time for a wee sentence informing us what the income per barrel is? It’s currently around $80 and heading up toward $100 in 2019, my ‘experts’ tell me! What about the actual cost then? No time for that either? According to the BP CE it’s $12 per barrel so profit, before tax, would be $68 per barrel or $41.6 billion (613 million barrels x $68) in 2018 alone!

There’s a fuller report by Reuters here which puts ‘unit operating costs’ at £12.2 per barrel:

For the news on oil not found on BBC Scotland, see:

Value of Scottish oil surges to $85pb on way to $100pb in 2019

Scotland’s Oil surging bullishly toward $100 per barrel

As Scottish oil heads for $100pb will the UK Treasury tax this massive revenue?

‘Scottish oil and gas sales saw an 18.2% increase to £20billion in the last financial year.’ but we get diddley!

High oil prices continue to weaken confidence in Scottish economy



7 thoughts on “Scottish oil heading for $41 billion profit in 2018 alone, BBC Scotland? Yes, yes, BUT, BUT what about rising costs?

  1. William Henderson October 9, 2018 / 3:26 pm

    “The unit of cost per barrel of oil also rose by 2% last year.”

    I suppose this is written to provide support for the Tory government’s decision not to reinstate the pre-pricedrop level of taxation. Remember how they had to step in to help the poor oil companies stay in business. The wee souls are only just beginning to recover ?????

    Liked by 2 people

  2. David McKenzie October 9, 2018 / 10:24 pm

    Your Reuters article has nothing to do with unit operating costs.
    My understanding of unit operating costs, is that they are unique to each asset.
    BP may have stated their operating costs. Is that on a particular asset or across their North Sea port folio?

    I’ve never heard of an industry averaged operating cost.
    That’s not to say there isn’t one but I’d be interested to see the data.


    • johnrobertson834 October 10, 2018 / 8:49 pm

      BP CEO Bob Dudley said yesterday (September 2017):

      This focus on standardization, simplification and discipline on cost has contributed to our average production costs in the North Sea coming down from a peak of over $30 a barrel in 2014, to less than $15 a barrel today. Heading towards 2020, with all our major new developments coming into production, we expect that to come down below $12 a barrel in the North Sea.’

      North Sea oil for November is trading at around $55 dollars per barrel so that means billions in profits are being made yet little is being paid in tax and, of course, none of it is going into a fund for the Scottish people.

      This explains how Goldman Sachs could say on August 5th this year:

      ‘Oil majors are raking in more cash now than they did in the heyday of $100 oil, according to Goldman Sachs Group Inc. Integrated giants like BP Plc and Royal Dutch Shell Plc have adapted to lower prices by cutting costs and improving operations, analysts at the bank including Michele Della Vigna said in a research note Wednesday. European majors made more cash during the first half of this year, when Brent averaged $52/bbl, than they did in the first half of 2014 when prices were $109.’


  3. markmac2014 October 10, 2018 / 9:05 am

    It costs them $5 an equivalent barrel to lift it here, they’re making about $10 Million a day and pay no petroleum tax.
    They just stopped the bottled water for the workers because it costs too much.

    Liked by 1 person

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s