Short Oil Trivia #62

For dinner table conversations. In late 2015 I started researching the commodity sector, after the rout. I looked for a book with actual teachings on energy. This one was quite dry, but I picked up a few interesting facts worth remembering.

On world oil reserves

  1. Most of the world’s oil reserves are held by the four largest nationalised companies in Iran, Saudi Arabia, Iraq and Kuwait. Together they own 50 % of the world proven reserves.
  2. The next countries: Venezuela, Libya and Nigeria hold about 15 % of all reserves.
  3. Exxon comes only on the 12th rank with 1% of all world reserves.

On oil production

  1. Saudi Arabia produces 12 MBD, Iran 4 MBD out of the 90 or so consumed each day.
  2. It is estimated that the production cost in the best fields of the middle east is around 5 USD per barrel.
  3. In 2005, Saudi Arabia produced more oil in 1 month than the entire world did in 1900,
  4. In 2005, Saudi Arabia output was enough for Japan annual consumption.

On the history of standard oil.

  1. Standard Oil owned by Rockefeller in the early 1900’s owned 90 percent of production and sales of oil at the time hence the monopoly break up.
  2. The shift of power has happened quite fast: the later domination of the 7 sisters which owned 60% of oil in 1960 was rapidly reduced down to 15% in 2005 with the OPEC foundation in 1960.
  3. But in light of what the oil has brought to the middle east and Venezuela in the end, then maybe Pablo Alfonso, the founder of OPEC, was right in saying that Oil would eventually lead his country to ruin.

My purpose in life is independence, fulfilment and a better understanding of how the world works. Like Charlie Munger, I believe in the discipline of mastering the best that other people have ever figured out. And like Sir Isaac Newton, I believe in our ability to see further than any others before us by acknowledging that we are standing on the shoulders of giants. With this blog I hope to keep track of my learning about investing, business, decision making, entrepreneurship and self development while inspiring others to do the same. For the moment the format of this blog will be one post for each book that has influenced me, but I expect it to evolve over time. Join my Journey. John.
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