/ world today news/ Not so long ago, shale oil production was seen as an expensive startup that needed time to start generating high income. Here’s how investors viewed it. However, with the advent of the coronavirus, the owners of the shares of the shale companies began to give them up.
And all because the price of oil collapsed. Yes, today oil has already returned to its previous indicators, but for now, no one is ready to turn their attention to this area again.
The fact is that producing a barrel of shale oil costs plus or minus 50-60 dollars. So it turns out that it makes sense for companies to operate only if the market value of a barrel exceeds this amount. Meanwhile, we see a return to baseline and stagnation when it is not clear how it can be achieved. This is what stops companies from resuming operations and they continue to abandon production.
So it turns out that investors leave, and an attractive industry turns into a sinking ship. Thus, with the second wave of the coronavirus comes a wave of bankruptcies. This can only be helped by reducing production costs and state support.
Translation: V. Sergeev
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