Why Russia is unable to stop the US shale industry


The Oil War continues, and the head of Rosneft, Igor Sechin, intends to prevail in it. According to him, by the end of 2020, a barrel will again cost around $ 60. To do this, "just something" must remove the American shale industry from the market.


How adequate are the company's management plans?

So far, everything is developing in the most negative way. WTI crude dropped below $ 25 a barrel, breaking the $ 20 mark. Specialized news agency S&P Global Platts warns that the worst is yet to come: demand for raw materials is forecast to decline by 16 million barrels per day. Goldman Sachs analysts are expecting a drop of 25 million barrels per day in April.

The coronavirus pandemic affects the reduction in consumption, and measures to combat it through “social distance” have already covered 92% of world GDP. Against this background, Saudi Arabia is pushing for: Riyadh intends to increase its export of black gold "to the level of 10,6 million barrels per day.

For the oil market, what is happening is a real disaster, and someone will have to leave with a bang. Igor Sechin believes that this will be the United States, considering that at current prices financing of shale developers will be impossible. There is some truth in this. According to some estimates, 70% of American companies operating in this sector will go bankrupt, a third of their employees will remain on the street. But this coin has another side.

IHS Markit Ltd spokesman Daniel Yergin explains:

Companies go bankrupt, but rocks don't go bankrupt. When all this shakes up, other people will appear who will develop the slate.


Weak companies will go bankrupt and will be bought up by several larger ones, a banal redistribution of the market will occur. By itself, the US shale sector will not go anywhere because of its uniqueness. In other countries, it is not possible to suspend the production of oil shale, as this will lead to irreversible environmental consequences. In the United States, the rocks are so dense that they will not be destroyed; the mining process can be stopped and resumed at any time without much risk.

Shale oil producers will be forced to mothball most of the wells, cutting costs. When the crisis is over, they will restore production and the industry will revive again, becoming even stronger due to the enlargement of surviving players.
41 comment
Information
Dear reader, to leave comments on the publication, you must sign in.
  1. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) April 1 2020 14: 17
    -1
    And it took weeks to write different strange things, in order to ultimately voice what has been repeated for decades in USA itself.
  2. 123 Offline 123
    123 (123) April 1 2020 14: 22
    +2
    Shale oil producers will be forced to mothball most of the wells, cutting costs. When the crisis is over, they will restore production and the industry will revive again, becoming even stronger due to the enlargement of surviving players.

    And the cycle will repeat. Oil will become cheaper again, small companies will go bankrupt, wells will be mothballed. It is difficult to call this stable work. This is similar to a joke about a toothless vampire eating on the basis of the menstrual cycle (I cannot cite the text of the joke for well-known reasons).
    Curious how much patience banks and insurance companies have? what Giving credit and insuring obviously future bankrupts is a peculiar business. winked
    1. Sergey Tokarev Offline Sergey Tokarev
      Sergey Tokarev (Sergey Tokarev) April 1 2020 16: 23
      +1
      The authors of these masterpieces, like that vampire, indulge in the same seagull ...
    2. mor7d Offline mor7d
      mor7d (mor7d) April 2 2020 12: 16
      -3
      go bankrupt, mothballed wells. Stable

      Stability in the cemetery, and development does not imply stability.
      1. 123 Offline 123
        123 (123) April 2 2020 12: 19
        +2
        Stability in a cemetery, and development does not imply stability

        Then with all my heart I wish you more instability, fellow develop on health. yes
  3. Lieutenant Rzhevsky I April 1 2020 14: 31
    0
    Author: Sergey Marzhetsky

    Noodles are enough.
  4. Alexander Semenov (Alexander Semenov) April 1 2020 14: 50
    -2
    The Saudis are doing everything absolutely right, setting the price trend for 6-12 months ...
    1. Sergey Tokarev Offline Sergey Tokarev
      Sergey Tokarev (Sergey Tokarev) April 1 2020 16: 34
      +1
      Only the Saudis cannot take out oil and no one. All are overrated. And they have fewer reserves than Russia.
      1. Alexander Semenov (Alexander Semenov) April 1 2020 16: 51
        -1
        Yes, they have a different task, relax and watch.
        1. Oyo Sarkazmi Offline Oyo Sarkazmi
          Oyo Sarkazmi (Oyo Sarkazmi) April 2 2020 14: 08
          +2
          The Saudis need to fight. And not in the market, but in Yemen. And this is a lot of money. Which, unlike the United States, you will not print.
  5. gorenina91 Offline gorenina91
    gorenina91 (Irina) April 1 2020 15: 04
    -4
    Why Russia is unable to stop the US shale industry

    - How can you stop it ... - The cost of producing Russian oil is approximately (somewhere on average) - corresponds to the cost of American shale oil ... - If I am personally mistaken here, then not much ... - The volumes of production are not comparable. .. - And the "vital importance" of the production of this oil for Russia and the United States ... - are not comparable at all ... - these are just two big differences ...
    - Well, what do we have ??? - And we have a "duet" of David (this is the USA) and Goliath (this is Russia) ... - Well, a stone flies into Goliath's forehead ... - he crashes backwards ... and there is no strength to lift him ... - A what is david ??? - And David just winds up his sling for a while, so that later it can be used again on occasion ... - Yes, he doesn't really need this sling ... - but he still stays with him ...
    - Well, as for the price of oil, it may rise by the Trump election ...
    - Well, the whole world today is in a terrible and terrible coronary virus and in the fall in oil prices ... - Now, if you manage to curb (stop) the pandemic of this virus, then the oil price will be "amnestied" ... - and Trump background of general world joy ... - he will ride a white horse into the White House ... As for Sechin's "predictions", he smacks absolute nonsense ... ???
    - My personal opinion is that ... - Today, Russia simply needs to issue long-term loan bonds and distribute it among the population ... - Here our people are sitting at home today, in home quarantine ... - and public services should be quickly attracted ...- let they go home, bring masks and oxolinic ointment (at least this) to our citizens right in their apartments and distribute these bonds ...
    - Actually, Rosneft even has several options to solve all today's difficulties ... - but this is a completely different story ...
    1. Sergey Tokarev Offline Sergey Tokarev
      Sergey Tokarev (Sergey Tokarev) April 1 2020 16: 41
      +3
      And so, 400 years since the time of Ivan the Terrible, from the Anglo-Saxons and Vrusi to all ukrov and non-Russians, they dream that Russia is Goliath)))) Only Russia has survived more than one empire. But whether the USA will survive another recession is not a fact ... the rocks in North America and before the Americans were, will be after.
      1. gorenina91 Offline gorenina91
        gorenina91 (Irina) April 1 2020 17: 14
        -4
        Russia survived more than one empire

        - Yes, I survived ... - but we must live, not survive ... - Live, not survive ... - This is life, not an epidemic ... of the coronavirus ...
        - Russia had a great future ...; but Russia (under the USSR) itself has given up its future ...
        - And today Russia has nothing ahead of it ... - except for the hope that the oil price will rise ... and that the oligarchs will be fed and happy ... and that after their "lawfully stolen" ... - and for us something will remain (fall) ...
        - Okay ...- I won’t be here ... think for yourself ...
        1. Sergey Tokarev Offline Sergey Tokarev
          Sergey Tokarev (Sergey Tokarev) April 1 2020 17: 33
          +1
          It remains to add to this pearl that Siberia will secede tomorrow, because three baboons came to the rally ... I read this nonsense constantly and more and more authors of such nonsense such as Gudkov are fleeing from Russia)))

          "Russian President Vladimir Putin can express his gratitude to the United States Treasury Department," writes Bloomberg. The United States, with a continuous stream of economic sanctions and the threat of announcing new restrictive anti-Russian measures, pushed Moscow to reduce debt and build up reserves.

          Experts in a Bloomberg article "Suddenly Not So Badly Looking at [Vladimir] Putin's Economic Isolation" explain that the fortress-country tactics that previously pushed the Russian economy into stagnation are now perceived as forward-looking. The situation in the Russian economy contrasts with the readiness of other countries for the worst economic downturn since 2008. "
        2. Oyo Sarkazmi Offline Oyo Sarkazmi
          Oyo Sarkazmi (Oyo Sarkazmi) April 2 2020 14: 11
          0
          Quote: gorenina91
          And today Russia has nothing ahead.

          You are struck by chronic pessimism. If you will not be treated, you may need a radical remedy - a loop.
        3. Rum rum Offline Rum rum
          Rum rum (Rum rum) April 6 2020 01: 17
          +1
          Quote: gorenina91
          - Russia had a great future ...; but Russia (under the USSR) itself has given up its future ...

          You will read the royal laws. For example: "the law on servile children", there are many interesting laws. And think about your "bright" future in the Russian Empire.
          And look at the industrial underdevelopment of this formation, at education.
          And also think about this: capitalism would try on a "human face" if it were not for the USSR.
      2. The comment was deleted.
  6. cmonman Offline cmonman
    cmonman (Garik Mokin) April 1 2020 16: 13
    -2
    Sergey is right - nothing lasts forever under the moon. Many small oil companies went bankrupt, tens of thousands lost their jobs. For banks, this is a minor loss, because many companies held private investment. Somewhere between 2010 and 2015, my phone was choking on robotic calls to “make an investment in the oil gap”.
    Today in the OilPrice.com review -
    “How Low US Oil Prices May Fall.”

    https://oilprice.com/Energy/Crude-Oil/How-Low-Could-US-Oil-Production-Actually-Go.html

    there is a paragraph:

    As a result, American shales seem to be rapidly declining. This is bad news for many companies that depend on this activity for their bread and butter. The good news is that this will inevitably lead to higher prices, and the growth cycle for energy will start again.

    This can happen at the end of 2020, or in the middle of 2021 - everything is cyclical in this world.
    1. Sergey Tokarev Offline Sergey Tokarev
      Sergey Tokarev (Sergey Tokarev) April 1 2020 16: 51
      +1
      And where will prices start to rise if the refineries are almost worth due to the lack of demand for oil products, and the storage facilities are full? In the US, the peak will be only in a couple of weeks. Pakistan is generally terrified. Everything is just beginning for them, and they cannot enter quarantine.
      1. cmonman Offline cmonman
        cmonman (Garik Mokin) April 1 2020 17: 05
        -1
        And where will prices start to rise if the refineries are almost worth due to the lack of demand for oil products, and the storage facilities are full?

        The economy will begin to recover not today or tomorrow, but in 6-12-18 months. This planned economy will not recover, and under capitalism - easily!
        1. Sergey Tokarev Offline Sergey Tokarev
          Sergey Tokarev (Sergey Tokarev) April 1 2020 17: 48
          +2
          In 6-12-18 months, what will happen to the savings of the population? Some have them for two weeks, who have a couple of months, and there are those who receive daily and without savings. And the corpses are already being transported by refrigerators. Shops have already begun to rob in the United States.
    2. 123 Offline 123
      123 (123) April 1 2020 17: 03
      +3
      For banks, this is a minor loss, because many companies held private investment. Somewhere between 2010 and 2015, my phone was choking on robotic calls to “make an investment in the oil gap”.

      And how do you think those who wish to invest after a couple of such cycles are increasing? After all, it turns out how to invest in a pyramid, invested, profit went, managed to get down - well, no - it remained empty.
      1. cmonman Offline cmonman
        cmonman (Garik Mokin) April 1 2020 17: 19
        0
        And how do you think those who wish to invest after a couple of such cycles are increasing?

        Full! And in shale oil, and in startups, and in the securities of developing countries! There are a lot of players! For Russians, this is an “unfamiliar sport”, but for Amers or other rich people, it’s easy ...!

        It turns out how to invest in a pyramid ...

        Nothing like this! If you invest in a fault, then they give you a complete geodesy of the fault, figures of expenses / production / profit, you can consult an independent expert for your headstock. What they don’t give you is guarantees that the price of oil will be stable.
        1. Sergey Tokarev Offline Sergey Tokarev
          Sergey Tokarev (Sergey Tokarev) April 1 2020 17: 50
          -1
          You poorly know the Russians))) there is still such a sport as jumping on the Independence Square and licking the toilet lids))) is not interesting.
        2. 123 Offline 123
          123 (123) April 2 2020 08: 00
          +3
          Full! And in shale oil, and in startups, and in the securities of developing countries! There are a lot of players! For Russians, this is an “unfamiliar sport”, but for Amers or other rich people, it’s easy ...!

          At one time, we also had a lot of people willing to invest in "MMM". laughing Until now, pyramids happen periodically, but there are already fewer volunteers, apparently, natural selection works (takes money from those who are near). It is surprising that this does not work for you, maybe they are artificially grown?

          Nothing like this! If you invest in a fault, then they give you a complete geodesy of the fault, figures of expenses / production / profit, you can consult an independent expert for your headstock. What they don’t give you is guarantees that the price of oil will be stable.

          Do not make me laugh laughing What does an ordinary person understand in surveying and accounting? When I first saw a map of the field for the first time, my eyes went up. A sheet of A1 format, mottled with small letters, numbers, dashes. wassat
          1. cmonman Offline cmonman
            cmonman (Garik Mokin) April 2 2020 16: 55
            -1
            Don’t tell me what an ordinary person understands in surveying and accounting?

            Investing is not a sport for the average person. In Russia, the middle class is small ($ 60 thousand - $ 130 thousand per year), and people make investments with $$$ million per year, they are even less in Russia.
            1. 123 Offline 123
              123 (123) April 3 2020 10: 18
              +2
              Investing is not a sport for the average person. In Russia, the middle class is small ($ 60 thousand - $ 130 thousand per year), and people make investments with $$$ million per year, they are even less in Russia.

              I don't think people with "$$$ million a year" are unusual, they are no different from "ordinary people" and do the same stupid things, only they are more expensive. I'll try to explain it using the example of Moscow. When housing in Russia became personal property and it could be sold, prices in the city became quite high and suddenly Moscow became a city of millionaires. At the same time, I believe that no brain transformation was observed in them, they were the same people, they just added zeros in the accounts.
              That investment is not a sport for "ordinary people" is also not true, the only difference is in the amount of investment. The more your compatriots invest in dubious projects, the more "ordinary people" there will be in the country. yes
              Oil production and sales are quite complex areas of activity. In this it is necessary to understand, and not just rely on "consultants".
              As a bonus, the link:

              https://geoenergetics.ru/2020/03/31/realnaya-neft-mnogoobraznee-birzhevoj/

              Martsinkevich has something to read, good I recommend. hi
  7. Marzhecki Offline Marzhecki
    Marzhecki (Sergei) April 1 2020 16: 46
    -1
    Quote: Sergey Latyshev
    And it took weeks to write different strange things, in order to ultimately voice what has been repeated for decades in USA itself.

    Claim at the wrong address.
    1. Sergey Tokarev Offline Sergey Tokarev
      Sergey Tokarev (Sergey Tokarev) April 1 2020 17: 17
      0
      The author, today I already read a quote about rocks somewhere ... Perhaps even on the site where "expert" Platoshkin grazes. Only after the quotation were the names of large American TNCs indicated. And the fur-bearing northern animal of American shale producers is only one gear, along with the epidemic, the actions of the Fed, etc. in the mechanism of the beginning of the recession in the United States. Now the question is not of preserving one industry, but of the entire state. There will be no one to drill ...
    2. Sergey Latyshev Offline Sergey Latyshev
      Sergey Latyshev (Serge) April 2 2020 07: 28
      0
      And the "answer" button?
      This strategy is often used with the letter "Tr ..."

      About writing - this is not specifically for you, but in general on the site and to other places.

      For those who are interested, find someone from Lukoil at Goblin who spoke about pricing about 2 years ago.
      Longish, boring, but useful.
  8. The comment was deleted.
  9. Rum rum Offline Rum rum
    Rum rum (Rum rum) April 1 2020 22: 58
    +2
    The author does not take into account one simple thing, namely: 100% borrowing from shale and hedging risks will never help here (collapse of financial markets, you understand). Their ruin leads to considerable losses to creditors. They, of course, are insured, and these are losses of insurance companies, etc., and again hello, the financial crisis (I still have not mentioned allies). Of course, in the event of bankruptcy, creditors will get debtors' property to pay debts: the same mothballed wells and a bunch of drilling equipment, and what to do with it (?) And who needs it (?) {A rhetorical question}. The author can say that all these assets will be bought up by large companies, only now they have enough hemorrhoids and there are no free resources. And these assets are hanging on someone’s balance sheet for a very indefinite and very inappropriate time.

    Now answer, please: When the time comes for price stabilization, how many idiots will there be to invest resources in such a risky business? KSA and Russia will not go anywhere and may well repeat. Perhaps the shale workers will be able to agree with Russia and the Saudis and they will play according to the general rules, but this is also a good result that will suit everyone. The task is not to destroy shales, but to force the United States to play according to general rules.
  10. Marzhecki Offline Marzhecki
    Marzhecki (Sergei) April 2 2020 06: 56
    -2
    Quote: Rum Rum
    The author carries complete nonsense.

    Anonymous experts ran. laughing
    Soon you will see everything for yourself.
    1. Rum rum Offline Rum rum
      Rum rum (Rum rum) April 2 2020 15: 09
      +3
      And are these all the arguments? Yes, you are just a genius of rhetoric!
  11. Sapsan136 Offline Sapsan136
    Sapsan136 (Sapsan136) April 2 2020 11: 03
    +2
    The rocks can fall apart due to a banal earthquake and then all the poisons that are used in the extraction of oil shale will turn underground waters and rivers of the USA into a poisonous cocktail unsuitable for life !!! As for the purchase of small firms by large companies, this will not do anything, since the cost of producing shale oil is the same for everyone, but no one will work at a loss, everyone knows how to count money. If the oil price lingers for a long time below $ 100 per barrel, the oil shale will be unbroken for shale companies !!!
  12. mor7d Offline mor7d
    mor7d (mor7d) April 2 2020 12: 15
    -4
    Why Russia is unable to stop the US shale industry

    Why do this? Maybe America wants to stop some industry in the Russian Federation? No. And why the Russian Federation climbs to stop something in America?
    1. Sapsan136 Offline Sapsan136
      Sapsan136 (Sapsan136) April 2 2020 14: 27
      +4
      But the United States generally creeps into foreign countries with its rules, like typhoid lice, and bombers of those they don’t like ... Is it time to bomb the United States, for example, that they infringe on the rights of the Indians, or are sick with Russophobia ?! Maybe Russia is deploying its missile defense and military bases along the borders of the United States ?! No, it’s the United States that they are trying to get them to hell !!! USA - an evil empire and a prison of the indigenous peoples of America !!!
      1. mor7d Offline mor7d
        mor7d (mor7d) April 3 2020 12: 57
        -3
        The United States climbs with their orders in foreign countries, like typhoid lice, and bomb everyone they don't like

        America bombed the Russian Federation? No. So what is it about?
        1. Sapsan136 Offline Sapsan136
          Sapsan136 (Sapsan136) April 3 2020 12: 59
          +3
          America didn’t bomb the Russian Federation simply because the Russian Federation was able to wipe the United States off the face of the Earth in a matter of minutes ... Countries that do not have the capabilities of the Russian Federation, the United States bombed and robbed as they want ...
  13. Aleksandr2020 Offline Aleksandr2020
    Aleksandr2020 (Alexander Vk) April 2 2020 13: 18
    0
    The author is clearly trying to console American shale workers.
    In fact, everything is deplorable there, already American analysts themselves say that everything, the shale has died. There are no idiots who want to invest, there is an outflow of capital, companies go bankrupt, and loans still hang on them. Who will buy unprofitable companies with loans hanging on them?
    They would read sane analysts, not this nonsense.
    1. mor7d Offline mor7d
      mor7d (mor7d) April 3 2020 13: 00
      -2
      everything slate is dead

      About fifty years old I hear that America is rotting, that the dollar has died, the shale has died (and it was just starting to develop), and so on. And there are always those who repeat this.
      1. Aleksandr2020 Offline Aleksandr2020
        Aleksandr2020 (Alexander Vk) April 4 2020 03: 30
        0
        You, most importantly, believe))))))))
        About 50 years, oil shale dies - generally smiled. You can immediately see "Ykperd"!
  14. Smirnoff Offline Smirnoff
    Smirnoff (Victor) April 7 2020 16: 34
    +2
    Why does Russia fail to stop the shale industry in the US ???

    But because Russia does not deal with this stop !!! She is in a sick American imagination.
    It's like that joke.
    - Why is he elusive?
    - And all because no one catches him!
    So with the American slate. The slate will stop the Americans themselves. How??? The United States launched the global coronavirus pandemic to ruin China and Russia. But this pandemic came to the United States and caused a global crisis there.

    This crisis is lasting and it will stop American shale oil. And in Russia they will take note of this and say thanks to the Americans! The one who disturbed us, he helped us to destroy the American shale !!! Here is a shale American fairy tale END !!!
    Our Vladimir is GOOD!