Oil Fracking Essay

4. Finance Perspectives:

4.1 Evaluation between Hydraulic Fracturing and Oil Drilling:

4.1.1 Cost Saving:

The conventional oil drilling technique is much better from the oil fracking technique in terms of cost of production, as the cost of production of one barrel of oil via oil fracking technique is nearly 70-85 USD per barrel, on the other hand, the cost of conventional oil production estimated to be about 3-6 USD per barrel and even less than that in some cases. According to the Petroleum Policies and Strategic Outlook Center report that the oil fracking boom is just illusions where it is certain assured that dealing with oil fracking is facing technical difficulties that make it very high in production cost compared with the conventional oil drilling. In addition, the efficiency of oil fracking production is very low which is up to 5% at best

The drop on oil prices also usually leads to increase on the prices of currencies in Oil-Importing countries, particularly the US dollar, and decrease in the prices of currencies in Oil-Exporting countries. The run-down in the price of oil has contributed in a sudden drop in the currencies of a number of Oil-Exporting countries, including Russia and Nigeria. While the drop in the price of oil is only one reason of the reasons for the low rate of the ruble, yet the Russian currency fell by 40% so far this year, and 56% since September 2014. Although the devaluation of the exchange rate in accordance with the prompt administrative approach can help the Oil-Exporting countries to conduct the required correction, it also exacerbates financial problems for companies and governments with debt denominated in US dollars. In countries that lack the anchor expectations sufficiently, the uncontrolled cut in the rate of exchange could lead to speed the inflation to very high