Record Profits For Exxon 10.7 B

[DanS]

Good for Exxon. Profit is good.

[Asher]

Originally posted by Flubber
I doubt there are more "companies"-- For example EnCana Corporation has a structure that includes about 150 companies and many little juniors with less than 1000 boe a day will have 10-15 "companies"

They're owned by the same organization, are they not?

So I don't think "number of companies" means much of anything. But even if you only count separate entities, there are hundreds of oil and gas "enterprises" operating in Alberta alone

The number of companies that control any kind of significant oil production can be counted on one hand (okay, maybe two). There are hundreds of support "enterprises", of course, but I don't consider many of them to be oil companies...

[Japher]

Good for Exxon. Profit is good.

Exxon is like Wal*Mart in a lot of ways

[Flubber]

Originally posted by Asher

They're owned by the same organization, are they not?

I thought that was clear-- you were the one that used the term "companies"

Originally posted by Asher




The number of companies that control any kind of significant oil production can be counted on one hand (okay, maybe two). There are hundreds of support "enterprises", of course, but I don't consider many of them to be oil companies...

You are wrong -- a company that owns oil wells is NOT a "support enterprise" and there are hundreds of these outfits. heck last time I counted there were something like 30 companies with significant oilsands holdings .(and that is a high cost environment)


You said

Originally posted by Asher

There are fewer oil companies than IT companies, which means there's more money to be made by a smaller number of organizations...

So are you now saying we only count the large oil companies?

I think numbers of each type is irrelevent. Whether there are 300 or 3000 competitors doesn't usually matter to the biggest in an industry. heck , more competitors often means additional opportunities to simply buy out companies that you think are growing well.

[Flubber]

Originally posted by Japher


Exxon is like Wal*Mart in a lot of ways

Please explain your thinking. I think I could end up agreeing with you but I see the industries as so very different.

For instance ExxonMobil regularly enters in joint ventures with some of the the other largest oil businesses in the world. Its simple risk -sharing--- Often you wold rather put up 2 billion on a venture rather than 4 or 6. Somehow I can't see Walmart entering into a joint venture with another retailer ( maybe it happens . . .I don't know)

[Asher]

I think it's an important distinction. The major oil companies control the vast majority of the oil of the world, which is a physical, limited resource. These big companies have a say in whether the small companies can come in to play on the oilsands.

That's pretty different from the IT world, where there is no physical, controlled resource...

[Flubber]

Originally posted by Asher
I think it's an important distinction. The major oil companies control the vast majority of the oil of the world, which is a physical, limited resource. These big companies have a say in whether the small companies can come in to play on the oilsands.

That's pretty different from the IT world, where there is no physical, controlled resource...

Excellent-- now you are making some sense. Why didn't you say that in the first place instead of babbling on about "number" of competitors.

The other factor you didn't mention is that the oil industry is a notoriously expensive and high-risk place to play-- If you drill a well and find nothing, a small outfit can be done pretty quick. The big outfits take the same risks thousands and thousands of times such that they average out.

One point--
The big companies don't "have any say" on who plays in the oilsands. Its an open bid process for new leases and the reason the little companies generally can't play is that they don't have the money to bid high enough. So there is a market barrier . . Its the same reason the little comapnies don't play in the offshore.

Even if they manage to get a lease they then need joint-venturers ( I don't think a junior wants to try to raise billions on the stock/debt markets)--See Synenco and their Chinese partners as an example.

[Asher]

Is that the only way to enter a project, to bid on a lease? Most of the big projects are joint ventures, aren't they? That are negotiated on a company-based level.

I remember years ago my dad was negotiating with Shell for his company's part of one of the projects, which is now like 25%.

[Fake Boris]

Originally posted by alva
They need compassion?

Certainly not. But adversely we would find they don't need criticism neither.

BTW, what do you mean;" demand was low"?

Lower, in a relative, not absolute scale.

[Odin]

Peak Oil = Peak Profits.

[Flubber]

Originally posted by Asher
Is that the only way to enter a project, to bid on a lease? Most of the big projects are joint ventures, aren't they? That are negotiated on a company-based level.

I remember years ago my dad was negotiating with Shell for his company's part of one of the projects, which is now like 25%.

Yes there are often negotiated joint ventures as well. But a "small" company would usually have nothing to offer if they don't come to the table with a lease. Parties don't want a joint venturer that might have trouble coming up with their share of a 300 million cost overrun for example.

Oh and Chevron is 20%. Western Oil Sands LLP is 20% and Shell is 60%. The whole idea is risk sharing.


Oil sands differ a lot from the regular patch. In the regular patch a small company might farm in or farm out an interest based on drilling a single well. Oil sands require a huge capital expenditure and to be in production, you NEED capital or the ability to raise it.

Small outfits do try to play up there on spec though. The hope is to pick up a lease and then sell it for cash and/or a royalty.

[Japher]

supply and demand?

[Flubber]

Originally posted by Oncle Boris


Certainly not. But adversely we would find they don't need criticism neither.



Lower, in a relative, not absolute scale.

IN 1998 demand was much lower and oil hit $12. Profits were in the toilet, downsizing was the order of the day and prospects looked grim.

Anyone doing forecasting before making a 10 billion dollar expenditure has to recall that. The industry is not always booming . . . as for the good profits now . . . Isn't that the way the market works to reward those that choose wisely to invest in producing a product which has an increasing price??

[Flubber]

Originally posted by Japher
supply and demand?

Thats what is happening-- The problem was that supply for a while could not keep pace with demand

But supply will increase. The new price reality should trigger long-term investment in all types of energy industries

[Sava]

is anyone else pissed off that we (consumers) are getting assraped by these mother****ers?