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No. of Recommendations: 21
A samll example that oil is not so scarce:

bingham,

I'm trying very hard to explain something to you and you are trying very hard to close your ears. I don't really care if you feel 1.5 billion barrels will solve the problems of the world though some quick division by 85 million barrels a day may put paid to that idea.

I do have a little suggestion that was told to me by a very smart man who is no longer with us. Any time you see an article written about a relatively small company about a big find, count the number of times the article uses the word "may".

I would add that "The BM-C-43 block, located in the shallow waters of the Campos Basin, may hold between 500 million and 1.5 billion barrels, based on well information and seismic data, Rio de Janeiro-based OGX said today in a regulatory filling. The company owns all of the block, according to its Web site." and the traditional recovery rate for seabed stuff at around 30% means you "May" have between 150 million and 450 million recoverable barrels which leaves you an optimistic 5 days of global supply assuming the high end.

The next question that comes to mind is how deep is the stuff? Shell recently hit oil in the Gulf of Mexico 11 kilometres deep (7 miles for Y'All). That is the deepest well in history and cost the company a billion dollars. If anything the fact that anyone would drill that deep at that cost should tell you that recoverable oil is very scarce.

There is still a lot of oil in the world but most of it would be very costly to recover and will need a much higher price than your suggested $30 for any company to even think about developing the fields. The latest large find 200 miles of the coast of Brazil ("may" contain 70 billion barrels) will not produce a drop of oil until ten years after the oil price stabilizes at over $100 a barrel.

My suggestion if you are thinking of investing in the industry is to find companies that are profitably producing oil "now", while increasing reserves. This excludes a lot of the majors who simply cannot find or buy the reserves they need to move the gauge.

Tim
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