The main point of the article is that while oil companies are reporting large earnings these weeks, by some measures the big companies are shrinking. Companies are having "trouble delivering on promises to raise production growth and find enough new sources of crude to replace what they are pumping out of the ground." Further, Shell, who was forced to shut down some of its Nigerian production, is expected to report a decline in output. "Between 2004 and 2006, only ExxonMobil has managed a better than 100% replacement rate on its own."
Saturday, February 2, 2008
WSJ Article
This is an article I found in the Wall Street Journal. As a petroleum engineer, I often feel the need to shrink against the wall when profits are announced, and I always look for tomatoes when people ask me what my major is. Even so, this is an interesting article, especially after the lecture on Thursday and the discussion on peak oil. Click for the original article, "Big oil's not-so-big growth plans -- with new reserves harder to snag, Western firms could opt for smaller role."
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1 comment:
Ms. Prante,
No need to shrink against the wall when Big Oil's profits are announced. It may be easy for quite a few people to forget when the oil companies were not doing so well due to the low prices in the 80's.
Hearing politicians crying about Big Oil's unfair profits made off the backs of the poor American citizens is nothing but pandering to ignorant people trying to get votes. What's even worse and will cause even smaller levels of reinvestment are windfall taxes. Which is when the government skims profits it decides are "excessive".
When discussing American oil companies' shrinking worldwide influence, the rise of national oil companies must be mentioned. Many times, national oil companies are treated favorably by their native governments when bidding for exploration territory. American oil companies are still viewed as being technologically superior, and are many times brought in on joint ventures for this very reason. Some people view this as being bad, but in today's changing world, it's either adapt or die.
Sincerely,
JR Ewing
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