Industries

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
  • 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