When oil is first struck, it is forced out of the ground by high pressure and there’s little we need to do to extract it. But as the amount of oil in a vein diminishes, it becomes necessary to pump the oil out. When the amount of oil a pump can extract no longer exceeds the energy consumed in pumping it, the oil field is abandoned.
Pumps are generally run by electricity, so that is part of the energy to “run” the field. Oil fields require routine checking and maintenance and repair, including having personnel drive to the field – requiring fuel to get there plus whatever energy is involved in repairs. World wide, production costs (called “lifting cost”) range from estimated $6.76 per barrel to $14.62 per barrel in 2008. That does not include finding costs, drilling, cost of a platform, taxes, royalties, transportation, etc. The cited reference is for reported costs only. In reality, the range will be greater on both the bottom and top ends. In some difficult places production costs can be more than $40 per barrel. Finding costs (exploration) range from about $5 per barrel to more than $75 per barrel, so add that to production cost to get the expense involved before a drop of oil is sold.
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