1 as in over $1 billion profit *PER SECOND*
tinyurl.com/5hcbhs
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Cue misguided comments about oil prices from people who don't understand how the market works.
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Cue misguided comments about oil prices from people who don't understand how the market works.
And that will remain so even after you point out some of the other parts of the above story [tinyurl.com/5hcbhs]
".... net income of $11.68 billion on revenue of $138 billion in the second quarter ....
Exxon also had a hefty tax bill. Worldwide, the company paid $10.5 billion in income taxes in the second quarter, $9.5 billion in sales taxes, and over $12 billion in what it called "other taxes." ..."
"... their profit margin, at around 8%, is slightly below average for S&P 500 companies, and far below the 20%-plus margins seen at companies such as Microsoft or Pfizer."
I only wish Exxon was a UK company earning $11.68 billion profit here and paying all that $32 billion tax to our Treasury.
Edited by jbif on 19/08/2008 at 15:03
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Nope, about $1,500 a second profit actually. Seriously, think about it. Iraq is only costing the US about $9 trillion a year. 1000 seconds = less than 20 minutes.
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I love people complaining about oil company profits.
Where were they when oil was $10 per barrel in 1999, no-one was making any money and all exploration costs were cut to the bone?
Do they realise the impact of that and the 5 years around that of low profits has impacted on oil output ever since?
That there are not enough trained geologists and engineers to meet demand?
No.
Anyone with O level economics ... no - anyone with any common sense...
Say no more...
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There was a good piece on R4 recently about the geologist shortage that you mention. Apparently the oil companies are going to the top universities and making conditional offers to the best geology students before they even graduate. One girl on the programme walked out of Uni into a six figure salary. Fair play to her.
Wish I'd done it. I was good at geology.
Cheers
DP
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I specialise in oil company shares.
Yes, the bonanza in oil prices has done a lot for profits..
But the companies I hold are ploughing about 125% # of their post tax profits into more exploration or into pipleines and new holes to increase production.
#
(more than profits because some drilling costs are recovered and used to paydown accrued exploration and development costs - due to the nature of some licenses)
So all the current oil prices are doing is accelerating new output - thus either reducing the oil price through greater supply or replacing oil reserves that have been pumped. (Saudi, most Middle East states.. production cost under $5 per barrel)
Oil reserves are finite. Almost all the easy and cheap to produce oil has been found and is being produced. A lot of the moderately expensive oil has been found and is being produced. eg North Sea, off African coast, India.. etc ( production costs up to $30 per barrel)
The really difficult and expensive stuff is being explored : Falklands, Arctic etc.. If it is developed then production costs will be probably over $70 per barrel.
Then ther are the Canadian tar sands.. Huge heat and energy inputs are required. Huge investment. And the process is the worst environmentally you can think of. Polluted lakes, streamss, forests dying etc...
When the cheap Saudi oil expires - and the biggest field responsible for 6% of WORLD production is 50 years old --- there is no really big field to fill the gap.
World demand will fall with the coming recession so oil prices willl fall,,, but I suspect that is a blip in the long term trend which has seen prices go from sub $10 lows in 1999 to over $140 in 2008 and now around $110...
But when we end up relying on oil costing $70 to produce, then oil company profits will be huge: to repay the enormous investments made to get that oil and to help fund the investmenst needed to get the next lot of oil costing over $100 per barrel to produce..
When planes can fly without aviation fuel and all cars run on electricity produced from coal or nuclear the above comments will be less valid.
And most importantly we need oil for food: to make fertilisers and run tractors etc...
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>>And most importantly we need oil for food: to make fertilisers and run tractors etc...
Good point. In years to come we'll look back and think it was mad to waste such a wonderful chemical feedstock by burning it simply to keep warm and move around.
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