Oil Production

2 Different Types of Oil Production

  1. Long-Cycle Supply:
    • Require lots of up-front capital, planning and effort (Billions of Dollars, 3-5 years)
    • Few ongoing operating costs
    • Many years of flat or slowly declining production
    • Similar to baseload energy
    • Traditional form of oil production
    • Depended on for long-term supply
    • Example:  Alaskan Oil Fields
  2. Shorty-Cycle Supply
    • Low upfront costs (Few Million $)
    • Shale Fields
    • Quick to bring online
    • Very response to commodity prices in the short -term
    • Very intensive (production drops off quickly - 60-70% in 1 year) - requires lots of new drilling to keep up