Oil’s next great deflationary force: Taxes

[Elderberry]

Houston Chronicle by Liam Denning June 11, 2019

In a commodity business, cost is king. The efficient producer ultimately wins more business and more investment — and that is as true for countries as it is for companies.

Similarly, North America has become a magnet for investment, with even such former globetrotters as Chevron Corp. and Exxon Mobil Corp. rediscovering an affinity for home. In parallel, Schlumberger, a bellwether for upstream spending beyond the U.S., trades around levels reached in the depths of the financial crisis, despite the fact that we are now about three years into a recovery in oil prices.

Oil and gas companies are working, with varying degrees of success, to redefine themselves in the face of this, with a particular focus on keeping costs down. One of those costs is largely out of their hands, except in the sense that they get to choose where they drill: taxation.

More: https://www.houstonchronicle.com/opinion/outlook/article/Oil-s-next-great-deflationary-force-Taxes-13969563.php

[IsailedawayfromFR]

Sentiments like this seemingly are right but are actually only in a true market, which is decidedly not the case for oil.

As an example, Saudi Arabia is the unquestioned low cost producer of oil, so why is it that more investments are not gravitating that way like the 'cost is king' article's premise states?

It is because there is more involved than just costs