Approximately two years ago, at the end of 2013, I began saying that oil companies need to figure out how to disrupt themselves and find new ways (while they still have money) of doing business (referring to my latest piece on disruption here: LUFTHANSA: JUST DO IT). Back then the price of crude oil was somewhere between 95 – 100 USD. So crazy I must have been with my provocative thesis: “You have to figure out how to make profits at 30 USD or find other things to invest in – e.g. turn your oil-machinery green.” All the well-paid (or should I say, overpaid?) specialists laughed at me and said, “You have no idea. We know this market. And, you always exaggerate”.

FIGURE OUT HOW TOMAKE PROFITS AT 30$

Of course I don’t know much about THEIR market, and I admit I do occasionally tend to exaggerate to prove my point, however not this time. I grew up in a country where the common thought was that we will eventually run out of this precious and indispensable gold. Yeah Right…  – We know by now that it will not happen. Oil and Gas are literally everywhere; but we are still relying on old data, hopes and dreams (at least from an industry perspective). Only a couple of months ago as prices came down to $50, I had a discussion with a colleague who said, “well it will go up, or at least it will not go down that much” – and yes my dear friend, it might go up every now and then due to some “external circumstances” – but my advice will still be:

Plan for 30 USD (or lower) NOW; Why:

1. We know (and science supports us) – we will NEVER run out of oil – the media cannot fool us anymore.
2. We have started playing with technology, remember? – We are still neglecting the powers of the law of accelerating returns.
3. Oil is now everywhere, and the costs of storing oil is increasing and putting more pressure on the market, not thinking about any impact an increase of interest rate from FED would cause.
4. Oil will eventually not be competitive to new (green) energy from new technologies (<15 years).

It is not always basic math or surely not complex data, it is as simple as looking at society and the actual situation that helps us predict the future. Eulogio del Pino; you can put pressure on OPEC and Saudi Arabia, and yes, the price should statistically speaking bounce back, but it will not.

Happy Re-Shaping all those Oily-Giants!

btw! Betting on Olive Oil will surely make us rich, at least from a Vitamin E stand-point, and will also most likely impact current war strategies. #LO(I)L

Interesting reading on the topic:

How much oil does the world have left (they got it partly right):
http://www.forbes.com/sites/judeclemente/2015/06/25/how-much-oil-does-the-world-have-left/

On technology: “By 2020 The new technology would enable us to exploit around  60 percent of a reservoir. We can’t achieve more than 40 percent with current subsea technology”:
https://www.siemens.com/innovation/en/home/pictures-of-the-future/energy-and-efficiency/the-future-of-oil-and-gas-subsea-technology.html

Technology, Improvements – efficiency:
http://www.economist.com/news/special-report/21639014-thanks-better-technology-and-improved-efficiency-energy-becoming-cleaner-and-more

Tech-Startups in Oil-Industry:
http://www.canadianbusiness.com/innovation/how-oil-companies-are-tapping-tech-startups-to-boost-efficiency/

#solar #green-energy #oilprice