The price of crude oil continues to match six-year-lows, but don't
expect that to curtail development in the
Bakken oil fields.
industry analysis by Bloomberg Business suggests that even at crude oil prices of $30 a
barrel, some areas of Bakkenshale are still profitable, dispensing older
notions that the price of oil has to be very high for oil shale fields
to be worth the investment.
Experts say the marginal cost to produce oil has shrunk dramatically, making
it profitable for companies to continue pumping oil at near a 40-year
record high level despite the falling price for crude oil. In early August,
the price for Bakkencrude dropped to $30.58 per barrel, the lowest it
has been since March, but the Bloomberg analysis indicates it is unlikely
production will be slowed or halt because of the lower pricing.
At the beginning of the oil slump, some experts had claimed that Bakken
shale needed $70 a barrel to break even, but newer estimates say that
in some areas the break-even point is only about $29 a barrel. The experts
agree it varies widely across the oil field and often from well to well.
One producer told Bloomberg that at $50 a barrel, it would see an after-tax
return, or profit, of about 30 percent on its best plays.
For workers in the Bakken field, however, the lower oil price trend is
not good news. A lower sale price for oil is virtually guaranteed to mean
companies ask employees to do more with less; that means lower numbers
of wells, fewer people, and more work, potentially increasing the likelihood
of work-related accidents.
If the need for lower production costs results in an injury to you or your
contact us to discuss you legal rights to compensation.