Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Despite boom, higher costs push Big Oil into slump
http://news.yahoo.com/despite-boom-higher-costs-push-big-oil-slump-205826965.html NEW YORK (AP) - New troves of oil have been found all over the globe, and oil companies are taking in around $100 for every barrel they produce. But these seemingly prosperous conditions aren't doing much for Big Oil: Profit and production at the world's largest oil companies are slumping badly.
Exxon Mobil, Shell and BP all posted disappointing earnings this week. Chevron is expected to post a profit decline Friday. All of them face the same problem: The cost to get newfound oil from remote locations and tightly packed rock is high and rising. And it takes years and billions of dollars to get big new production projects up and running.
The higher extraction costs could translate to higher oil and gasoline prices for consumers.
Strong production growth at an oil company can offset higher operating costs, "but when production is flat or declining it's a big hit," says Brian Youngberg, an analyst at Edward Jones. "Even though oil prices are $100 or higher, the returns on investment aren't what they used to be."
Exxon Mobil, Shell and BP all posted disappointing earnings this week. Chevron is expected to post a profit decline Friday. All of them face the same problem: The cost to get newfound oil from remote locations and tightly packed rock is high and rising. And it takes years and billions of dollars to get big new production projects up and running.
The higher extraction costs could translate to higher oil and gasoline prices for consumers.
Strong production growth at an oil company can offset higher operating costs, "but when production is flat or declining it's a big hit," says Brian Youngberg, an analyst at Edward Jones. "Even though oil prices are $100 or higher, the returns on investment aren't what they used to be."
That was a terrifying read, if you still care about the threat of Peak Oil.
All is not well in Frackland......
3 replies
= new reply since forum marked as read
= new reply since forum marked as read
