Chapter 59: Betting on Oil

  So-called abandoned oil wells are not completely abandoned oil wells, but refer to oil wells with a daily output of less than 2 tons or very unstable production. From the perspective of the Victory Oil Field, these oil wells have lost the necessity for re-investment and it is better to hand them over to private companies for cooperative development, which may yield more than operation.

  However, whether it is viewed with the technology of the 1980s or that of 30 years later, exploration mistakes have occurred repeatedly. The Victory Oilfield is also famous for its complex geological structure, numerous faults and multiple types of oil reservoirs that can confuse any expert.

  In this case, a well that originally produced 7 barrels of oil per day was re-drilled 10 meters deeper and became a high-yield well producing 300 barrels per day. However, if the wrong choice is made, an abandoned well that has been invested with a lot of money may become depleted at any time, to the point where even electricity costs cannot be recovered...

  Stories of overnight riches and losing everything have happened more than once on this land.

  Su Cheng had often heard such stories in school.

  His eyes scanned up and down, left and right on the map, finally stopping at several oil wells in Binan.

  Su Cheng looked at the relative position again, then opened his notebook and checked the information inside. Without hesitation, he pointed to the red dot on Bin Nan and asked, "Director Wei, can these oil wells be contracted?"

  "5702 to 5705, ah. Just a plot of land." Wei Kong looked at his notes and smiled: "Of course, there's no problem with the lease, 4 oil wells, including equipment rental above, let's just say 40,000 yuan per year. However, these wells are old, probably can't even extract one barrel a day. The payback period is quite long."

  Xiao Pang also looked at Su Cheng with a puzzled expression, but didn't say anything.

  A barrel of oil is $20, and with an average of 4 barrels per day, the annual sales are only $280,000. Moreover, we have to collect oil at the official price, which means a gross profit of $1 million. After deducting the $400,000 contract fee, and apportioning water and electricity fees, operating expenses, labor costs, and uncertain relationship handling fees, it's possible that business is not good and may even be unprofitable.

  This is also the reason why private oil extraction only started to rise after 2000. By that time, oil prices had doubled, equipment efficiency and prices had halved, contract costs had risen somewhat, but operating space had increased.

  Wei Kong was worried that Su Cheng didn't understand the market, so he explained: "The oil field has a limited contract fee for each oil well. The four wells in Bin Nan have been out of production for a long time. In the past, they could still extract some oil intermittently, but it's been completely impossible a few years ago. I suggest you choose the oil wells in Li*Jin, which are slightly more expensive, around 200,000 yuan per well, with three years of free equipment rental. Those are all oil wells that can produce over ten barrels per day, and they're actually more cost-effective than these four wells combined."

  "No need, I'll take care of these four oil wells." Su Cheng knew that these wells were no longer producing oil. However, beneath the shallow heavy oil, there was another small oil reserve.

  It's small compared to national-level oil reserves. Tens of millions of barrels in reserve, given to an individual, is worth hundreds of millions of dollars. When Su Cheng was in school, he had already heard the legend of Bin Nan's oil tycoon, who spent tens of millions and suddenly became a billionaire.

  At that time, the oil price also rose to over $100.

  Under his insistence, Wei Kong still had someone make a contract for him. After everything was done, he smiled and said: "Thanks to Director Su for sending me the original pulp. Ah, I've only mentioned it once, but you'd better remember it."

  "Huang Ping just went to Guizhou." Su Cheng shook hands with Wei Kong and said, "Can you introduce me to an oil extraction team? I think those 4 oil wells have potential."

  Wei Kong burst out laughing and agreed.

  Every private oil extractor thinks that the oil well they have chosen has goods, some people succeed and are written in big books, while others fail and there is no news.

  The oil reservoir characteristics of the Victory Oilfield have destined this place as a land of high-risk oil exploration.

  Those scattered oil deposits are not connected to each other, as if they were deliberately hiding. The entire Victory Oil Field contains two-thirds of the world's known types of oil deposits. Even the most powerful exploration teams cannot exhaust them all. Such an oil field, even if given to the Saudi royal family, would probably not have the patience to develop it. In fact, even if it is exploited for another 20 or 50 years, there will still be undiscovered small oil deposits on this land - until one day, when the large oil deposits in Victory Oil Field are fully developed and the equipment and personnel are withdrawn, these small oil deposits will remain there, equivalent to permanent waste. Because by that time, the cost of re-establishing the oil field development environment will far exceed the value of the small oil deposits.

  It was precisely because of this that 20 years later, private oil extraction enterprises in Shaanxi and Xinjiang were driven out one after another, while the private oil extraction companies in Shengli Oilfield were thriving. With the cost and efficiency of state-owned enterprises, they gambled on extracting 5,000 tons or 10,000 tons of small oil reserves, which would have been a loss if they had won, but only private bosses could fully utilize these resources.

  If there is an opportunity, Su City may leave the large domestic oil fields to future generations, but small oil reserves like Victory Oil Field are completely unnecessary.

  After several days, everything was ready.

  The drilling team erected a yellow and blue K-shaped derrick, with an effective height of 43 meters, as eye-catching as a TV transmission tower. The 6-meter-high drill base weighs over 100 tons, connected to the ground by steel stairs.

  The derrick is mounted on the base of the drilling rig, with a swivel plate hanging steel cables and connecting drill rods and power systems. The generator room and electrical control room are also mobile, stably fixed near the base, emitting a "rumbling" noise that makes people feel annoyed.

  But Su Cheng was excited.

  An oil worker, no matter what profession. This life always has a dream: to participate in an oil extraction and witness the scene of oil gushing out.

  Tens of millions of oil workers, millions of stone machines, tens of thousands of enterprises, the country's financial resources, all come down to this moment.

  Xiao Pang and the seven or eight bosses behind him also clenched their fists.

  There are fewer people in this generation who mix with oil fields, and their relationships are still pretty good. I heard that someone is re-drilling wells, so naturally everyone comes to take a look.

  The captain of the drilling team, Li Yao, monitored the work of the derrick and turntable while introducing to Su Cheng: "Our target well depth is 3,000 meters, and the 40-drill machine is more than enough. You take a look."

  Su Cheng nodded heavily and said, "Control the pace, no need to rush."

  Li Yaohao responded strangely. He had been working on the drilling team for many years and had seen all sorts of demands for progress, but he had never seen a demand to control progress.

  Su Cheng stared at the drilling platform without blinking, the abandoned well was also a good oil well, he only needed to go down 10 meters to 100 meters.

  It's fortunate that it was in Shengli Oilfield drilling, otherwise the moving expenses of the drilling team would have exceeded the budget.

  "The drill bit went down."

  Xiao Pang excitedly tiptoed inside and shouted amidst the loud noise: "Will it really produce oil?"

  "In just a few more minutes, you'll know." Li Yào shouted.

  Xiao Pang could only nod vigorously. The drilling team had spent their last circulating fund, and if there was no massive oil gush, this venture would be considered a failure.

  A few minutes passed quickly.

  Su Cheng was sulking and didn't say a word, Xiao Pang also didn't dare make a sound.

  When the drill bit finally reached the bottom, Su Cheng was a little impatient - it had taken too long. He couldn't help but wonder if he had remembered incorrectly.

  Is the rumor wrong?

  Su Cheng scratched his head, unable to help feeling a bit anxious.

  "It's 10 meters." Li Yao said in a low voice.

  "How can it be so slow?" Xiaopang shouted with his ear stuck.

  Li Yaoyi was taken aback: "Was it Old Su who told me to control the progress?"

  Xiao Pang was so anxious that he wished he could run around the well three times.

  "50 meters." Li Yao continued to count.

  "It's 60 meters."

  The drill bit descended smoothly, without even a slight change.

  The atmosphere on the scene became somewhat tense, Li Yao's hand holding the walkie-talkie was a bit numb, perhaps because he had no bottom line in his heart, and his hands were out of strength, just looking at Old Su's still calm appearance, his hand tightened again, at this time the drill rod suddenly sank sharply...

  ……