After its boom, shale oil will lead most US companies to bankruptcy

A new study by the American Institute for Energy Economics and Financial Analysis shows that record shale oil production in the United States is parallel to the marked increase in losses of local entrepreneurs, and 38 public oil and gas companies suffer from a negative cash flow of $ 1.26 billion.

According to Western analysts, a number of shale oil companies are expected to go bankrupt in 2020, and at the same time Russian experts believe that the revolution of the 21st century continues, and that losses and devastation are a completely natural process for the fuel and energy sector in the near future.

In a report published by the Russian "News. Rey" website, Dmitry Alexeyev said that such sad results are the result of a decade of disappointment for the shale oil investors who had hoped for years to increase profits from the apparently growing oil and gas production.

Deterioration of companies
The writer stated that although shale oil companies can provide huge amounts of oil and gas to the market, their debts have increased over the past ten years, which means that during the few years many companies may suffer a sad fate.

According to specialists, given the accumulation of debts of the company working on drilling shale oil wells, it is difficult - without the flow of new capital - to maintain record drilling rates.

As a result, American shale oil producers will find themselves unable to drill new wells to compensate for the drop in production.

In this context, EKT, the largest independent producer of shale oil, decided to lay off several employees and reduce drilling operations in part.

Chesapeake Energy submitted a bankruptcy notice to the United States Securities and Exchange Commission, Diamondback Energy reduced oil production, and the new wells did not provide the expected results. All these examples confirm the severity of the problems facing this sector.

The writer pointed out that after the Americans launched the alleged shale gas revolution, economists began to talk about the prospects for oil development, and given that the development of black gold is profitable, the need to search for alternative fuels and new sources of oil and gas will disappear, because according to various estimates it can reach the reserves of oil resources Rocky to 3 trillion barrels (by comparison, the volume of deposits from conventional oil is about 1.3 trillion barrels).

Purely risky
The writer quoted the director of the Institute of Economics and Engineering Valery Kryukov that it must be taken into account that the sources of shale oil are of a different nature, and there are no normal mining facilities.

He added that although ordinary oil is not extracted from fields of a similar nature, the sources of shale oil are more diverse, and since the regular sources of oil extraction may change, the complete composition of production and the approach to dealing with these sources will change, and this involves financial risks for American companies.

According to Kryukov, at the moment there are 14 thousand companies looking to achieve profits through the production of shale oil, but there are many difficult tasks regarding work in this sector, and many participants in this market do not have sufficient funds and experience.

The writer quotes a professor at the Russian University of Zhobkin Oil and Gas Vladimir Schuster that the production of shale oil is a very dangerous process, and often accompanied by various incidents.

He pointed out that we must pay tribute to the fact that American drilling equipment has a high margin of safety, so the specialist is usually sure that the losses spent on shale oil production is a temporary cost.

Russia without shale oil
Schuster said they are satisfied with conventional production, bearing in mind that Americans are increasingly pushing Russia out of the lucrative European fuel market. Moreover, participation in the shale oil revolution requires tremendous resources, and for many years the Russians have delayed engaging in this sector, because they are satisfied with regular oil.

According to Vladimir Schuster, Americans took refuge in shale oil as an alternative to regular oil when laws prohibited the exploitation of discovered oil fields.

It is noteworthy that these fields were preserved for future generations, and as a result the Americans went to the production of shale oil, and were able to achieve relatively rapid success through the strong development of the industry and by adopting the latest technologies in this field.

Analysts say that sooner or later Russia will have to follow the same path and start extracting shale oil.

Today, Russian oil companies are becoming increasingly sophisticated in the shale prospects and techniques of shale oil mining in the sediments of a group of oil-containing rocks in several regions of Russia.