Record Profits!

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For myself, I don't really have a problem with such high profits as long as the profits are used responsibly to enhance the oil supply. In that regard, how many new refineries have been built or started since Katrina? Are efforts being made to find more oil supplies? How about technology? I don't know. If the oil companies are making efforts in this regard then they are doing an abysmal job at communication this to the consumer. I don't believe they are simply because higher prices means higher profit.

The chairman of GM once said "What's good for GM is good for America." I do not believe the same can be said for Exxon/Mobil.



As someone pointed out, even though the revenues for an oil company are immense, so are their expenses. Compare expenditures for a big oil company against other large corporations in the US and you can get a better perspective of how large a part oil plays in our economy. In addition, an 11% return on investment is considered to not be very good for most industries in the US. Yet that is typically what an oil company makes when "times are good" and the public is being raped in most people's eyes.

Explain an 11% return on investment to the share holders of Walmart, and a lot of other big corporations, and see how happy the collective share holders are....

No one left extra money at the pump out of concern for the oil companies when gasoline was $1.75/gallon and the return on investment for an oil company was in the low 2%-5% range at best, and for some not even that good, including negative numbers.

Are oil companies spending big money to explore for new reserves? Yes they are. And oil companies invest HEAVILY in new technology to find the shrinking reserves.

Are they building new refineries? No they are not because no one wants a "smelly refinery" near where they live, so most refinery expansion projects proposed since the early 1980's get scrapped due to "environmental concerns". Who typically pushes those concerns?

It's nice in our society that we all can have our own set of personal facts that mold our lives, but not all facts are really....facts.

People are screaming right now because the price of gasoline is finally getting in the neighborhood of the percentage increase in price of most other things we consume compared to the early 1970's, yet it's the "greedy oil companies" who are causing all the problems when you and I are actually paying close to $0.50 per gallon in taxes for the gas we buy today. And we were paying the same tax when gas was $1.75 per gallon.

So.....don't conveniently lay all of the blame on the oil companies. That's like saying "the dog ate my homework". It may be a simple and convenient answer, but it doesn't meet the smell test when all the facts are on the table....and I'm referring to real and valid facts, not real and valid opinions that we are all entitled to have in our society.

Part of the problem why many people get confused between facts and opinions is because we all need gasoline for our livelihoods. We can live without some other things if they get too high priced, but unfortunatley right now there is not a cheap alternative to needed gasoline that is available to all of us.

-BCB
 
Well I just had to click onit again. This was discussed about a few months back and I found the thread. This is what I said then, I still stand by it.

I will weigh in here. I own a company that services Oilwell companies. For the year my profits are up 60% from last year. Last year my profits were up 30 % from the year before. If this keeps up for another year, I may be able to offset the losses I have incurred for the last ten year average, due to the low prices and lack of business. The Oil companies even during the 8 dollar a barrel years, are not subsidized by the Govt. In fact they are the most heavily taxed. The govt pays farmers to not plant, it pays people to not work, it pays doctors to not operate(HMO)etc,etc,maybe they
should pay oil companies to not drill oil wells, then we could all ride our horses to town to get the groceries from the farmers market. America complains about a gallon of gas that sells for 3.00 from an oil well that cost a few million to drill, then cost several hundred per day to operate, but have no problem paying three dollars for a gallon of milk that comes from a 500 dollar cow that cost 2.00 per day in feed. We pay 1.00 for a bottle of water that comes from the ground for free. Oil is required for more than the gas we burn. Look around the house you are sitting in and there is nothing you see that did not require Petroleum products to either get it there or to produce it. Oil sold for over 40.00 dollars in the late 70s and early 80s. You could buy a truck during that time for 10,000, a loaf of bread for .25 and a gallon of milk for .75. a gallon of gas for 1.40. All material things we buy have gone up 100% or more in the last 30 yrs except electronics( China and Japan now own that market)Petroleum went down. It still has not reached 100% increases from 30 yrs ago.

I agree there are unscrupulous dealing in the Oil companies, but that can be found in allmost all industries in the world, It does not make it right. If you will read the whole article, it says they used the profits to reduce their debts by a substantial amount. Maybe they should have not taken the profits, returned it to the customers, gone out of business when the prices fall again(and they will fall) then we can be dependant on the Opec nations and Petroleum can go the way of electronics.

I will shut up now and relax. Denjahn this is not directed to you and I apologize for highjacking your post. Just had to get this off my chest. Randy
 
[quote It's nice in our society that we all can have our own set of personal facts that mold our lives, but not all facts are really....facts.



Well said.

Good info BCB. You are better at PR for oil companies than they can manage.
 
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[quote It's nice in our society that we all can have our own set of personal facts that mold our lives, but not all facts are really....facts.



Well said.

Good info BCB. You are better at PR for oil companies than they can manage.



LOL!! I've been retired for almost two years now, but I spent the last 7 years of my career with a major oil company doing just what you described - public awareness and public education.

One thing I learned doing that - and it took me to just about all of the 50 states and Washington D. C. - is that some people and some parts of the country are receptive to the message. Others already have their minds made up, and they don't want to get their opinions clouded with real information.

It was an interesting job and I met a lot of interesting people doing it, but unfortunately in performing my job, I was nothing but an expense (overhead), and technically I actually did very little to put gas into people's cars. But, in today's climate, it was a necessary and required effort.

My technical background was not of much use to me in this job other than I understood how an oil company works from A to Z, so I had/have a little trouble accepting the simplistic stories some people put forth about the price of gas.

Since I'm retired and on a fixed retirement income, I too would like to see $1.50 per gallon gas. But I realize the reason it isn't that price is not just because of simple oil company greed that in reality gives an oil company an 11-12% return on investment.

$13B sounds like an immense profit until you realize it was only a little over 11% return on investment. That equates to a lot of investment to just keep gas at the gas pump like everyone expects an oil company to do.

Oh, well..... -BCB
 
BCB,
You pretty much nailed it.
I have had substantial investments in various oil companies for over 30 years and I can't complain about the return. They slightly beat the market averages. Beating the market indexes is about all you can hope for.
For big gains there are many things that make oil companies look like bonds. Copper stocks gained 100% in the last year or so, makes that 5-10% gain in oil stocks look dismal.

Jack
 
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Looks like all of our problems are solved

They found huge reserves of oil in CUBA.


Now all we have to do is lift those embargo's and lower the booms.
 
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