No, but off shore is expensive. I stuck a finger in the air and took a number similar to Exxon’s profit margin of 8%. They’re one of the so-called integrated companies with extraction, refining, and retail businesses, so quite a different beast. However, energy companies tend to be high turnover, low margin.
Let’s say $30 with some padding over the lifetime. And the optimistic price of $100 (personally I think oil prices will settle on average about half that). Anyway, about 10 million barrels a year times 70 = 700 million profit @25% (not sure when the 40% rate kicks in?) = 175 million a year.
edit: crossing with your Exxon post - I think we need to know whether that is company net profit or net profit from drilling?
A good deal more than I would have guessed. And that’s net of (US) tax. I still think your $70/bbl profit is way too high. Offshore oil is super expensive to produce. Don’t know about production rigs, but exploratory ones are hired and cost up to a million a day. Anyway, taking your number for the sake of argument … still not earth shattering from a tax revenue POV, unfortunately. And it won’t be arriving soon either – all the costs can be written off before any tax has to be paid on profits. And the production curve normally starts low and ramps up. So could easily be a decade before any money hits the state coffers.
Interested to know why you think medium term oil prices will be only $50/bbl. The current price has all the economic doom and gloom built in. If the economy was buoyant it could easily see $200. The harder-to-get oil probably wouldn’t be commercially viable at $50. Canadian oil sands only start making profits at $80. Saudi oil is probably still produced for <$10/bbl but the prices are set at the margins, and e.g. offshore oil is much less profitable.
All of the fall off in demand in the US and Europe, and more, has been more than made up for in China and India so far. Unless the entire world is headed for recession, I can’t see the Brent benchmark price going below $100. And even if it does, I can’t see it staying there.