RE:RE:Surviving in Today's Unprecedented World - What's VII to Do?Thanks to fullyautomatic and surdiman. It's nice to have positivity rather than sarcasm! I write these becuase i am retired, know the subject really well, am stuck at home self isolating and most of all want to instill a bit of optimism TO EVERYONE in these terrible times.
fullyautomatic, as to where Condy prices go its really complicated depenDing on how much condy production is shut-in (option two will reduce VII Condy production by 23,000 bpd). i'm sure all the other shale producers will have some shut-ins as well. So let's guess and say 85,000 bpd. At a ratio of 0.33 bbl Condy per bbl WCS we must have at least 257,000 bbls of WCS shut-in. counteracting this is the cost to blend Condy over and above the Opex of the heavy oil. Cenovus for example has opex and blending costs of $17/bbl Cdn not counting transportation, G&A and royalties etc. So the bottom line is that the ceiling on Condy is the marginal cost of all-in heavy oil producers cost.
Without going on a limb i'd say the price varies from -15% to plus 5% of wti.