Chapter 826: Oil Fields
Chapter 809 The Oil Fields
What happened in Egypt, Franz naturally do not know, just a little thing, do not need the emperor personally asked.
In recent times, in addition to the prospects for agriculture is not optimistic, on the whole the Austrian economy is still a good thing.
If there is no accident, the end of the year will be able to return to the peak level before the outbreak of the economic crisis.
Looking at the latest economic report, Franz breathed a sigh of relief. The Near East Development Program, which is essentially a money-spinning program, will not see a return in the short term.
In order to raise funds, the Vienna government has issued 500 million guilders of construction bonds one after another, and the interest expenses on the funds alone are as high as 1.86 million every month.
This is just the beginning, as the Near East Development Program continues to advance, the government’s debt will continue to increase in the coming days.
Adding the old debt from before, Franz was surprised to find that it was just around the corner for the total government debt to exceed that of the Russians.
“How far along is the development of the oil fields in the Iraqi region?”
There was no way around it, the only project in the Near East that would see a return in the short term was the oil field found in Iraq.
With so many oil fields in the Middle East, Franz couldn’t figure out exactly which one was in the latter part of the world.
This is a small problem, anyway, the first discovered first mining, after the discovery of mining, oil buried in the ground and can not run.
Prime Minister Karl replied: “The extraction equipment has been installed, and is currently erecting the oil pipeline, which is expected to be completed by the end of the year.
It is expected that the oil from the Iraqi region will be enough to satisfy the domestic demand within a year after the commissioning of the pipeline.
In order to cut expenses, the Austrian Oil Company is already considering shutting down some of the small oil fields in the country in order to reduce the cost of crude oil extraction.”
There is no doubt, as you can tell by looking at the construction cycle, that the pipeline is not being laid directly to Austria, but rather to the Two Rivers Basin, then backhauled into the Persian Gulf in small boats, and then replaced by tankers to be shipped back to Austria.
While the Vienna government allows individuals to extract oil, mega-fields like Iraq, where the government has discovered them, are still the province of state-owned enterprises.
Since the second industrial revolution, Austria’s demand for oil, has been growing by the day. Even in times of economic crisis, it has maintained double-digit growth rates.
By 1884, Austria’s oil consumption had reached an unprecedented 15,864,500 barrels per year.
This figure, in later times, is not worth mentioning. It was almost as much as some big countries consumed in a day, but in this day and age, it was a complete record breaker.
Influenced by Austria’s soaring demand for oil, international oil prices have all climbed to a historical peak of 5.6 Shenduan per barrel/5.6 Shenduan.
Equal weight of crude oil, the price actually exceeded the price of food. The high price, so that the original inconspicuous oil, a leap into the “black gold”.
If this is all, then oil is still only a niche commodity. After all, Austria’s oil consumption, more than the other countries combined.
The entire crude oil market is only more than 100 million guilders, the total international trade in crude oil is only a pathetic two to three million guilders, of which the Russians accounted for half.
The really promising reason is still the rate of growth of oil demand.
From 1884 to 1885, Austria’s oil demand grew by 23.3%, along with the global oil demand also grew by 15.4%, this horrible speed is naturally self-evident.
The growth of the market is due to a variety of reasons, the first of which is the introduction of diesel generators, although the cost of generating electricity is higher than coal, but this thing is small, portable and easy to operate.
Humans have just entered the era of electricity soon, even the most developed power industry in Austria, but also inevitably every now and then power outages.
Ordinary people put up with the past, anyway, just eliminated the gas lamp, but not unusable. Even if you have lost it, you can still light candles.
But the factories can not, can not stop work when the power outage, right?
In this context, the diesel generator with independent power generation capacity has become a necessity for many factories.
Not only factories, aristocrats, capitalists are also home always have. Including Franz is no exception, the Vienna Palace can not guarantee non-stop electricity.
Seemingly inconspicuous small machine, but in fact has become a large fuel-consuming, and the growth rate is also very rapid.
A close second is the tractor, since 1880, the world’s first internal combustion engine-powered tractor was introduced in Vienna, and then it was out of control.
In just five years, this new tractor was updated twice and its performance improved dramatically.
With the advantages of being lightweight and easy to operate, it quickly beat its competitor, the steam tractor, and began to gain popularity in industrial and agricultural production.
To date, there are more than 150,000 tractors in Austria, of which 67 percent are powered by internal combustion engines.
This was just the beginning, and as the development program in the Near East progressed, the demand for tractors increased day by day.
If it were not for capacity constraints, it is estimated that the number of tractors in Austria would have passed the 200,000 mark.
Manufacturers are expanding capacity, and after a year or two at the most, the number within Austria will be surpassed.
Not to mention the various types of engineering equipment, which are all oil tigers anyway.
In contrast, the family car is a child’s play. After all, they are the preserve of a few rich people and are not yet commonplace throughout the country.
Judging from the current situation, Franz’s original prediction of doubling fuel consumption in five years was actually a little too conservative.
After all, the oil industry is just starting out, before the second industrial revolution, the main role of oil is mainly oil lamp lighting.
Originally the market is limited, but also subject to gas lamps, candles to steal the market, the demand naturally can not go up. The base is small, the growth rate is naturally fast.
As a result, a small wave of searching for oil broke out all over the world.
All this, however, will soon come to an end. Just wait until Iraq’s oil is developed, and the international situation of an oversupply of crude oil will be radically improved.
As for other regions, Franz was not prepared to start for the time being. Once the outside world found out that the Middle East was full of oil, pulling hatred not to mention, it would also lead to a decline in oil prices.
From the start of the Near East development program, Franz made up his mind to make up for the government’s financial investment with oil extraction dividends.
“This is a job that the government has to catch up on. Judging from the current situation, domestic consumption of crude oil will double within the next four years.
The oil fields in the Iraqi region will soon become an important revenue for the government. Relying on this oil field, it will not be a problem to support the interest in the Near East Development Program.”
No problem, it’s the interest on the money. Trying to support the principal investment is not something that can be done anytime soon.
Extracting oil is no more profitable, but the size of the market is there, directly locking the profit ceiling.
The growth rate looks fast, but this growth rate can not be sustained, with the growth of the total base, the growth rate will gradually decline.
Austrian oil demand can be doubled in four years, but in eight years it is difficult to double the base after four years.
Moreover, this kind of heavily resource-dependent finance was not what Franz wanted.
From the beginning he had made up his mind to limit oil production capacity, and a small amount of exports would suffice while meeting domestic demand.
Well, it was also a means of discouraging competitors. To inflate the international price of oil and to delay the development of the British and French oil industries by high costs.
(End of chapter)