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Despite boom, higher costs push Big Oil into slump
Jonathan Fahey, 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…the world’s largest oil companies are slumping badly…
(1 August 2013)
Shale-Boom Profits Bypass Big Oil
Daniel Gilbert, WSJ
Some of the world’s biggest energy companies are struggling to make money from massive bets on the shale boom in North America, where deposits of oil and gas are proving abundant but not always profitable…
(1 August 2013)
Shale Plays Not Working For Big Oil
Art Berman, Petroleum Truth Report
Recent revelations and write-downs of shale assets in North America by Shell, ExxonMobil and Chevron support our research that big companies cannot make money on low rate-low volume shale wells.
The majors exited North America in the 1980s because they could not support the operating costs associated with managing this kind of production even though the wells were profitable. They went to the overseas arena where things worked for a few decades as deep water plays emerged.
In the last 5 years, international opportunities have been exhuasted and national oil companies hold all the cards. This means that remaining international opportunities carry onerous production-sharing agreements or other difficult contractual obligations (note the deals that Shell, etc. have entered in Iraq where they must spend $billions to get a $2/barrel payment for incremental added production–these deals are being re-considered…
(3 August 2013)
Big Oil would henceforth like to be known as Not-Really-Big-But-Still-Nicely-Profitable Oil
Steve Levine, Quartz
Chevron has just joined the rest of Big Oil in reporting a miserable second quarter. And there do not seem to be consistently better days ahead. These gigantic energy companies face higher costs, trouble maintaining their size, and fierce competition from smaller, nimbler players…
BP, Shell and Exxon (paywall) have also reported sharply lower second-quarter profit this week. Exxon said its oil and gas production dropped for the eighth straight quarter and that it had the lowest quarterly profit in three years. For the second consecutive quarter, it said it would reduce share buybacks, one of the tools through which it has propped up its stock price.
This may be more than a passing carnage. We may be witnessing a more-or-less orderly industry retreat from Big Oil’s old, unsustainable size and Wall Street expectation, and toward a more manageable—and healthy—scale of business…
(2 August 2013)
Oil barrel drip via shutterstock. Reproduced at Resilience.org with permission.