Replies to post #114449 on Plastic2Oil Inc (PTOI)

[BRIG_88]

Looks like they're behind JBII by a long shot....28 for crude which has to be shipped and refined versus JBII's 10 bucks for already usable fuel.....JBII....WINNER

[Rawnoc]

"But that oil, over 8 million barrels a day, is pumped mostly by the Saudi national oil company and is largely off-limits to Western oil firms."

[Justice37]

There's a bit more to that cost, especially if it is to get to North America, JBI's fuel is already here and is sold regionally. Here's some more from that article.

The world's cheapest oil to extract comes from Saudi Arabia and costs $2 a barrel. But that oil, over 8 million barrels a day, is pumped mostly by the Saudi national oil company and is largely off-limits to Western oil firms.

For Western firms, it can cost as little as $5 to $7 a barrel to pump the most easily accessible oil from places like Venezuela or Azerbaijan, said Fadel Gheit, a senior energy analyst at Oppenheimer.
The new math of oil

The costs don't stop there. On top of the $5-$7 production costs, there's also the the money it took to build the pumping facility. At several billion dollars a pop, capital costs typically add another $5 to $7 a barrel.

And that's the cost of producing oil in the cheapest regions of the world. Factor in expensive fields like the deep water Gulf of Mexico, the tar sands of Canada or water-laden output of Texas, and the average production and capital cost is somewhere in the low teens to mid $20s, said Gheit.

Still not bad, considering the selling price.

Enter government.

Gheit said taxes and royalty payments can range from 40 percent of profits in places like the United States to 90 percent or more in places like Russia or Libya.

"It's a very complex equation," he said of trying to figure out just how much it costs oil companies to produce oil.

But if production were just the only concern, big oil companies like Exxon Mobil (Charts, Fortune 500), Chevron (Charts, Fortune 500) and ConocoPhillips (Charts, Fortune 500) that both pump and refine oil would have seen record profits in the latest quarter. Unfortunately for these companies, they are also buyers of expensive crude, not just sellers. In fact, they refine more oil than they pump themselves.

A lot more. Exxon refined 5.6 million barrels a day in the third quarter 2007, but only pumped 2.5 million barrels a day. Chevron sold 3.5 million barrels a day of refined products but only pumped 1.7 million barrels of oil. Conoco refined 3.1 million barrels but pumped just 774,000.

These companies don't get a deal on the extra oil they must buy to refine, analysts said.

"Generally speaking, they have to pay fair market," said Peter Tertzakian, chief energy economist at ARC Financial, a Calgary-based private equity firm. "If the refineries need it, they have to buy it."

[azs]

Even at $2 (Saudi 2007 cost) JBI is still the lowest cost producer of refined petroleum products. "$2" Saudi crude still has to be refined ($12-$18 per barrel) and shipped ($?). Saudi cost rose significantly for some reason in 2010. $28 may be the new refined delivered price. JBI still wins.