The pride that I meant was the one written in that nonsensical article in oiljobsnd. It was seething with anger and ego without any rational supply and demand concept.

The only way for the oil price to recover is either we suddenly have huge demand (aka China) or we have massive bankruptcies of the shale pil companies which will permanently shut them down (hopefully the bondholders will be so averse to reinvest in them in the future) because if they are not shut down permanently, oil price will never recover above 60 dollars as these companies will then open the DUCs (Drilling Un-Completed) wells and flood the market again. See where this is going. If they don't give, this will be 1983-1999 all over again. That is a loooong period of price stagnation.

Hahahah. Pelik betul aku ada puaka yang suka betul nak tengok orang kena buang kerja. Agaknya dia nak orang kena buang kerja macam dia gak ... first time aku dengar orang komplen giler baban pasai apa kompeni tak buang orang kerja. Dah masuk bab meroyan dah tu orang kata.

It's going to be really tough this year. Have to batten down the hatches and toughen it out.

Heheheh. Yes, we must never stay ignorant. But it is always better to stay positive (there is a difference) This is like the 1984 period all over again.

Kemon guys, you arguing with Puaka is like arguing with Rafizi one. Harga minyak naik kena maintain subsidy sebab revenue banyak, harga minyak turun tak boleh naikkan ERL tickets prices sebab gomen has "saved" money from harga minyak turun. Keturunan puaka semua ni

His understanding of production cost also makes me wanna to laugh sampai terberak one. (Wait for it while he google the concept of production cost). Hint to Puaka, cuba google UTC definition.

This post has been edited by azraeil: Jan 12 2016, 05:13 PM

There will come a time when it is better to shutdown operation rather than continue bleeding cash. When rhat happens, this will correct the supply side of the equation.

Aiyohhh .... where got cut.

This is how Petronas usually conduct their business. For those on Petronas Permanent staff remuneration scheme, the salary scale is across the board, meaning that your salary grade whether if you're in Downstream or Upstream are the same. So the notion that Petronas is cutting Permanent staff salary is at the moment far-fetched.

This is the component of Petronas staff

1. Permanent staff
2. Contract Direct Hire (those on 2 or 3 year contract including expats)
3. Manpower Supply Contractors

So before Petronas do anything with the Permanent staff, who do you think will be hit first?

3. Manpower Supply Contractors will be terminated as early as possible. For those lucky enough, they would have been converted to Direct Hire Contract Staff at a "Reduced Salary" ... (this is where some confusion about Petronas cutting staff salary is coming from)
2. Direct hire contract staff - Those with contract expiring this year (about 700 of them in the upstream), their contract will not be renewed unless you're certified Superman. Those that will get their renewal will most likely see their salary cut as well
1. Permanent staff -- Before the base salary is cut, most likely the allowances that they are enjoying right now and some of the BIK (Benefit In Kind) will be cut first.

At the moment, Petronas has and will be implementing item 3 and 2, as for item 1 .... not yet and even if they do, do something, it will be the allowances and BIK, not Base Salary.

Keep Calm and Hope for The Best

Ohhh, if they are on MSCs, they are in for a long wait.

Price per barrel depends on the reserve that is developed with the investments. If I drill an offshore well for 12 million dollars (yes, that is the current price now ... yes my company is that good now) and the well is expected to recover 3 million barrels during it's economic life (economic life and technical potential are 2 different things) so the Well UTC is 4 dollars per barrel etc. Of course this is incremental economics, looking at fields that Petronas have developed, most investment are in the 400 to 500 million dollar range (wells, facilities, platforms etc etc) and the reserves developed will be in the range of 20-30 million barrels ... guess how much the UTC will be? Still around 20-30 dollars per barrel so if anyone says that Malaysia's UTC (since it's offshore) is in the 50 dollars range, they are talking out of their ass. The RSCs however are a different story, those fields require 60-70 dollar oil. The RSCs were developed during high oil price which corresponds to high cost environment. The reserve developed were in the 7-10 million barrels with CAPEX of close to 300-400 million as well so that's why PETRONAS has killed off any new RSCs and all current RSCs are on edge.