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BP's £30m/day Is Nothing - Exxon Mobil: $95m/day  
User currently offlineWellHung From , joined Dec 1969, posts, RR:
Posted (9 years 1 month 3 weeks 6 days 11 hours ago) and read 980 times:

BP Post Profits Of £30m Per Day! (by NoelG Oct 25 2005 in Non Aviation)

Well, not sure what today's exchange rate is, but Exxon Mobil's profits are set to dwarf those of BP.

Even for Big Oil, the numbers have never been as big as this.

When major U.S. energy companies including Exxon Mobil Corp. and Chevron Corp. announce their third-quarter earnings in the next few days, the results are certain to be staggering.

Pumped up by soaring prices of oil, natural gas and gasoline in August and September, Exxon Mobil alone is expected to report quarterly profit of about $8.7 billion. That would be more than what such titans as Coca-Cola Co., Intel Corp. and Time Warner Inc. earn in an entire year.

...Together, the 29 major oil and gas firms in the Standard & Poor's 500 stock index are expected to earn $96 billion this year, up from $68 billion last year and $43 billion in 2003.



http://news.yahoo.com/s/latimests/20...u=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

Obviously, there's nothing wrong with making a profit, but this kinda makes you wonder...

18 replies: All unread, jump to last
 
User currently offlineHAJFlyer From Switzerland, joined Sep 2005, 1473 posts, RR: 9
Reply 1, posted (9 years 1 month 3 weeks 6 days 11 hours ago) and read 975 times:

Quoting WellHung (Thread starter):
Obviously, there's nothing wrong with making a profit, but this kinda makes you wonder...

Don't forget that the oil super majors (Chevron, Total, Exxon, BP, Royal Dutch) all have a hard time replacing their proven and probable reserves as large fields become ever difficult to find and expensive develop.

The finding and development costs for a barrel of oil from Canadian oil sands are app. 25 USD vs. just a few bucks for Saudi oil.

If we want to have oil from a wide range of different sources in the future, the oil companies will have to spend billions on very expensive exploration and production projects in the next years.


User currently offlineWellHung From , joined Dec 1969, posts, RR:
Reply 2, posted (9 years 1 month 3 weeks 6 days 11 hours ago) and read 967 times:

Quoting HAJFlyer (Reply 1):
If we want to have oil from a wide range of different sources in the future, the oil companies will have to spend billions on very expensive exploration and production projects in the next years.

I hope you are not under the delusion that these profits will be used for exploration and development 5-10 years from now. If and when these exploration costs rise, they will simply raise prices further - and probably with a margin.


User currently offlineHAJFlyer From Switzerland, joined Sep 2005, 1473 posts, RR: 9
Reply 3, posted (9 years 1 month 3 weeks 6 days 10 hours ago) and read 961 times:

Quoting WellHung (Reply 2):
that these profits will be used for exploration and development 5-10 years from now.

Yes I am. Look at the rig count in the US which is continuing to rise rapidly or at the capex budget procasts by the super majors.

You will see large increases in E&P activities espeically in South Asia and West Africa and Cetral Asia as well as the US.

Quoting WellHung (Reply 2):
If and when these exploration costs rise, they will simply raise prices further -

They will rise further because as we near and pass peak oil the overall production will first stabilize and then start a very gentle and gradual decline while demand will continue to grow although at a slower rate as we start tol diversify our energy sources.


User currently offlineWellHung From , joined Dec 1969, posts, RR:
Reply 4, posted (9 years 1 month 3 weeks 6 days 10 hours ago) and read 954 times:

So you don't think they will raise prices to offset increased E&P costs - rather they will keep the current profits in a 'lockbox' (lmao) for future expenditures so as not to increase prices if/when E&P costs rise in the future?

User currently offlineHAJFlyer From Switzerland, joined Sep 2005, 1473 posts, RR: 9
Reply 5, posted (9 years 1 month 3 weeks 6 days 10 hours ago) and read 949 times:

Quoting WellHung (Reply 4):
So you don't think they will raise prices to offset increased E&P costs

Individual companies whose E&P costs increase because their reservoirs become more expensive to develop and produce do not have the ability to move the crude market.

Don't forget that we have seen periods in the last 20 years when the oil price dipped well below the E&P costs of quite a few major non-OPEC produces, so history has proven that supply and demand and not E&P costs drive the market in the short and medium term.

In the long term higher however E&P costs will most likely ensure that we wont see extended periods during which the price of light sweet will dip below USD 40.


User currently offlineWellHung From , joined Dec 1969, posts, RR:
Reply 6, posted (9 years 1 month 3 weeks 6 days 10 hours ago) and read 941 times:

Well, if you're going to dance around the question, then nevermind. Next.

User currently offlineNorCal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 7, posted (9 years 1 month 3 weeks 6 days 10 hours ago) and read 941 times:

what a bunch of bastards, making millions at the sacrafice of hard working people. This is horse sh*t pure and simple. $30 million a day?!?!?!? with profits like that they better come up with some brilliant alternative fuels that are very cheap.....we need some trust busting, too few companies with too much power.

User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17824 posts, RR: 46
Reply 8, posted (9 years 1 month 3 weeks 6 days 10 hours ago) and read 936 times:

Quoting NorCal (Reply 7):
what a bunch of bastards, making millions at the sacrafice of hard working people.

Were you donating money to the companies when they were struggling to survive, losing millions, and laying off thousands in the 90s?



E pur si muove -Galileo
User currently offlineHAJFlyer From Switzerland, joined Sep 2005, 1473 posts, RR: 9
Reply 9, posted (9 years 1 month 3 weeks 6 days 9 hours ago) and read 935 times:

Quoting WellHung (Reply 6):
Well, if you're going to dance around the question

Which part did I not answer ?


User currently offlineHAJFlyer From Switzerland, joined Sep 2005, 1473 posts, RR: 9
Reply 10, posted (9 years 1 month 3 weeks 6 days 9 hours ago) and read 932 times:

Quoting MaverickM11 (Reply 8):
Were you donating money to the companies when they were struggling to survive, losing millions, and laying off thousands in the 90s?

  

Quoting NorCal (Reply 7):
making millions at the sacrifice of hard working people.

I suppose you are talking about the same poor working stiffs in the US who created this surge in demand (yes I know there are China and India to consider as well) by buying gas guzzling dinosaurs in unprecedented numbers during the last years.

Get real. There is not constitutional right to cheap energy and the days of cheap oil are slowly but surely coming to an end. The US has nobody but itself to blame for the fact that it is not as well prepared as other countries who have been encouraging conservation and energy efficiency for quite some time.

[Edited 2005-10-26 23:55:26]

User currently offlineDL021 From United States of America, joined May 2004, 11447 posts, RR: 75
Reply 11, posted (9 years 1 month 3 weeks 6 days 9 hours ago) and read 927 times:

Hey, I know.........everyone that's upset with the profits made by the oil companies should stop buying the oil.

If you think they are violating the anti-trust acts, then take action!

Otherwise, applaud their success or simply ignore them and buy your gas wherever it's cheapest.

In ATL it seems to be Quiktrip that has the consistently lowest gasoline prices.



Is my Pan Am ticket to the moon still good?
User currently offlineCfalk From , joined Dec 1969, posts, RR:
Reply 12, posted (9 years 1 month 3 weeks 6 days 9 hours ago) and read 913 times:

Just remember that these are huge companies. Exxon is a $350 billion company. I would call current profit levels as pretty good - Return on Assets of about 15%, but not excessive, considering the size of the company.

With the rapid increase of oil prices, the major oil companies have benefited immensely from futures purchases. This is simply good business - buying cheap for delivery later. If you can prove that their contribution margin per barrel/gallon stored, refined and distributed has significantly increased over the past couple of years, you can't logically accuse them of price gouging.

Maybe there is gouging going on. I don't know - I don't have a P&L at that level of detail. But saying that their profits are "excessive" just because of the size of their gross profit is like condemning a man of a crime simply because he lives in the same town where the crime was committed.


User currently offlineCaptOveur From , joined Dec 1969, posts, RR:
Reply 13, posted (9 years 1 month 3 weeks 6 days 9 hours ago) and read 907 times:

The best part of this is.. Exxon isn't even the biggest refiner in the US anymore.


I will say it again, because nobody has yet answered it. If you are a stockholder of Exxon-Mobil, what would you call "too much" profit?


User currently offlineHAJFlyer From Switzerland, joined Sep 2005, 1473 posts, RR: 9
Reply 14, posted (9 years 1 month 3 weeks 6 days 9 hours ago) and read 903 times:

Quoting Cfalk (Reply 12):
I don't know - I don't have a P&L at that level of detail.

What many people underestimate is the extent to which the historically very high refining margins have helped buoy profits. The relative increase in refining and marketing profits is generally higher than that of the exploration and production profits.

However one should should not forget that for a very long period of time the refineries did not even cover their capital costs. Because of this we do face a shortage today.


User currently offlineEA CO AS From United States of America, joined Nov 2001, 13752 posts, RR: 61
Reply 15, posted (9 years 1 month 3 weeks 6 days 8 hours ago) and read 898 times:
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Quoting Cfalk (Reply 12):
the major oil companies have benefited immensely from futures purchases. This is simply good business - buying cheap for delivery later

And lets not overlook the fact that while ExxonMobil may have purchased forward contracts at $35/bbl last year allowing for large profit margins right now, they're replacing that oil with purchases this year at $60-65/bbl - and THAT is where this "excessive profit" is ultimately going.

The replacement costs have to be considered - and they're not cheap.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineWellHung From , joined Dec 1969, posts, RR:
Reply 16, posted (9 years 1 month 3 weeks 5 days 15 hours ago) and read 852 times:

Well, it seems my numbers were off a bit. The correct number is $108,712,328.77 per day profit. It's good to see that the oil companies have recovered so quickly from the 'massive hurricane damage' that destroyed infrastructure and supply lines. lmao...  Sad

User currently offlineStlgph From United States of America, joined Oct 2004, 9518 posts, RR: 26
Reply 17, posted (9 years 1 month 3 weeks 5 days 14 hours ago) and read 851 times:

Quoting WellHung (Reply 2):
I hope you are not under the delusion that these profits will be used for exploration and development 5-10 years from now. If and when these exploration costs rise, they will simply raise prices further - and probably with a margin.

exactly.

Quoting WellHung (Reply 16):
Well, it seems my numbers were off a bit. The correct number is $108,712,328.77 per day profit. It's good to see that the oil companies have recovered so quickly from the 'massive hurricane damage' that destroyed infrastructure and supply lines. lmao... Sad

yes. a new record profit for the quarter. $8 billion. not the year. that's three months. and the second quarter was what...$7.5 billion, or somewhere in that neighborhood?



if assumptions could fly, airliners.net would be the world's busiest airport
User currently offlineSlider From United States of America, joined Feb 2004, 6924 posts, RR: 34
Reply 18, posted (9 years 1 month 3 weeks 5 days 14 hours ago) and read 840 times:

http://www.breitbart.com/news/2005/10/27/D8DGFSKO0.html

I'm not against capitalism, hell, I love profits as much as the next guy, but I seriously have an objection to RAPACIOUS capitalism, in which oil companies DOMINATE supply, charging what could be perceived as egregious prices, and reporting record profits.

Might not be a good comparison, but it's similar to usury in loan terms.

Bastards.


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