Oil and gas drives the nation’s economy. Because it becomes increasingly harder to get to the oil beneath the surface of our planet, companies involved in drilling and mining for precious natural resources face more risks as the exploration for these resources moves to more difficult terrain, often deep beneath the ocean floor.
There are plenty of unconventional oil and gas extraction techniques in use that requires the manpower available to get the job done in managing to squeeze out these vital resources. But this comes with exposures that could lead to accidents resulting in significant damage to equipment and can even put lives at risk. In New Mexico, where a good deal of drilling occurs, purchasing a policy from a Santa Fe insurance agency can help when an incident occurs resulting in a claim.
The price of oil is determined by several factors
In addition to any geological risks, the price of oil and gas is among the primary factors in deciding when mining a particular reserve is an economically sound idea. When there are high geological barriers to surpass to allow for the extraction, there’s also the more likely that the price for that oil becomes an important factor. With unconventional extractions come higher costs. Many of these types of extractions are more difficult than a vertical drill down to a deposit. Once a project has begun the price risk is a constant concern.
Of course, operational costs can be equally daunting. The more onerous the laws and regulations, the more difficult the process of drilling becomes, and the more expensive a project becomes. This, coupled with uncertain prices due to worldwide production that goes beyond any one company’s control and you’re likely to experience some real cost concerns.
Including the costs of retaining workers that can help to get the job done. While many oil and gas companies do and will continue, to struggle to find and retain the qualified workers that they need during boom times, payroll will quickly rise to add yet another cost issue to the overall picture. These costs have made oil and gas a very capital-intensive industry, and your Santa Fe insurance agency has an important role in providing the best coverage money can buy.