of oil out of the ground... or Iran, where it costs in the $60s. The cost in the North Sea is $55.)
Again... more oil + less cost = better return = more profit .
Companies have produced oil in the Permian Basin for about a century. This means that the region has an extensive infrastructure system to get the oil to market. Producers in the Permian Basin have ready markets and the area is directly connected to Cushing, Oklahoma – one of the largest crude-oil storage areas in the world. These facilities provide oil and gas E&P firms with direct access to the refineries along the Gulf of Mexico and its ports. In the coming years, this infrastructure will allow those companies to react quickly to transport oil as drilling ramps up due to increased demand and oil prices. And plans are underway for the development of pipelines and export facilities along the port of Corpus Christi, Texas. This will allow producers to directly export their crude oil. Speaking of the Gulf of Mexico, we also need to look at the offshore oil and gas operators in that region. Of all the remaining conventional oil and gas reserves in the world that are recoverable, 10% are deep beneath the surface of our oceans and other bodies of water. The Gulf of Mexico has the most developed infrastructure of all the offshore oil-producing areas worldwide. And it sits just off the coast of 40% of the refining capacity in the U.S. Oil production in the Gulf of Mexico will reach record highs in 2017. That is despite the current environment of low oil prices, as well as the high costs and technical challenges of drilling wells at depths of two miles or greater. The EIA expects growth of 10% in 2017 to 1.83 million barrels per day. The Gulf of Mexico is attractive for us as investors because large discoveries with hundreds of millions of barrels are probable. But we have to be careful where we put our money.
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