Big Oil's Burden of Too Much Cash

[LiviaOlivia]

The New York Times
February 12, 2005
Big Oil's Burden of Too Much Cash
By JAD MOUAWAD

Born from the megamergers of the 1990's, the world's giant oil companies have delivered on their promise. They have cut costs, increased returns and raised profits to records. Now, flush with cash, they find themselves in a paradoxical position - they are making more money than they can comfortably spend.

Thanks to crude prices that averaged $41 a barrel in New York last year, the world's 10 biggest oil companies earned more than $100 billion in 2004, a windfall greater than the economic output of Malaysia. Together, their sales are expected to exceed $1 trillion for 2004, which is more than Canada's gross domestic product.

~snip~

"The net effect of $50-a-barrel oil is to reduce opportunities," said Paul Sankey, an analyst with Deutsche Bank in New York. "Large profits make governments think that they're not taxing sufficiently enough."

For example, the Russian government collects most of the profits when oil prices rise above $25 a barrel. Some countries - including Kuwait, Angola and Iran - put limits on the gains foreign companies can make if prices rise above a certain level. In many production-sharing agreements, for example, oil companies agree to a revenue cap, so that when prices rise, producers must reduce their volumes. "The industry would much rather have lower oil prices and more stability and a more sustainable environment," Mr. Sankey said. "Record prices mean record revenue, but also too much attention for an industry that basically likes to remain out of sight."

http://www.nytimes.com/2005/02/12/business/12oil.html

[w4rma]

1. They like to control from the shadows. (nt)

[UL_Approved]

2. Shadow economy + Shadow government = BushCo®

The perfect item of national control. Big oil and big paramilitary

[applegrove]

3. Maybe they should invest in "cold fusion" or something good fir MANKIND

Maybe they should invest in "cold fusion" or something good for mankind.

[Canuckistanian]

6. "cold fusion" is a myth, it never worked.

If it did, you'd be driving a cold-fusion car right now. And don't use the argument "Big Oil is keeping the secret from being discovered"
The nuclear fusion physicists (you, know, the guys who spend their whole lives studying this stuff) say it's impossible.
However, normal fusion, which is getting to be very well-understood, offers the most promise. What's needed is the final spark, the ultimate concentration of energy on the smallest particle to start fusion.
We're not there yet.

[applegrove]

8. Yes I know it didn't work. But those in corporate heaven making

Yes I know it didn't work. But those in corporate heaven making so much money they simply cannot put it all into their own research or into the stockholders pockets should do what many great corporate citizens have done ore the years - put it into researching the World's problems. Since they are oil companies it would make sense for them to invest in alternative energy (so that in 20 years some alternative source of sunlight cell will be available to combat empty Oil Wells).

That is what a real corporate citizen will do - when they are too rich and have a cash flow problem - they need to put it into 'seed' money to make the world better. And doing so locally in the USA would be a good idea (since the SS estimated 2042 implies the USA will not be going through great growth). So the cash heavy corporation should really be doing something to help out the American Worker and creating a Whole New Industry through technical research seed money.

[teryang]

4. Note the focus on mid-east sources

...that they don't have access to.

[Coastie for Truth]

5. The concentration of economic power is unconscionable

Big Oils CEO's advise Bush and Cheney - so we only have window dressing on alternative energy, or even raising CAFE. No progress.

These same Big Oil CEO's buy off Congress -- and starve the nascent alternative and renewable energy industries -- and those alternative energy startups that look promising Big Oil kills with vexatious and frivolous patent lawsuits (altho they are joined in this with the Big Three). Maybe the energy industry needs a Greg Aharonian!

And, their "dabbling" in international politics cause more harm and prolongs resolvable conflicts. - http://www.democraticunderground.com/discuss/duboard.php?az=show_topics&forum=124

I spent a career in alternative and renewable energy. NEVER worked for a mainstream energy company.

[AP]

7. A lot of oil is burned by countries trying to develop their economies.

Those huge profits represent a shift in money away from countries trying to build themselves up to create more health, wealth and happiness for their citizens into the pockets fo a few very wealthy and large private companies.