Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Oil Company Execs Defend Huge Profits
AP via New York Post ^ | 9 NOVEMBER 2005 | H. JOSEF HEBERT

Posted on 11/09/2005 1:39:04 PM PST by rdb3


Nov 9, 4:29 PM EST

Oil Company Execs Defend Huge Profits



WASHINGTON (AP) -- The chiefs of five major oil companies defended the industry's huge profits Wednesday at a Senate hearing where they were exhorted to explain prices and assure customers they're not being gouged.

There is a "growing suspicion that oil companies are taking unfair advantage," Sen. Pete Domenici, R-N.M., said, opening the hearing in a packed committee room.

"The oil companies owe the American people an explanation," he declared.

Lee Raymond, chairman of Exxon Mobil Corp., said he recognizes that high gasoline prices "have put a strain on Americans' household budgets" but he defended his company's huge profits, saying petroleum earnings "go up and down" from year to year.


(Excerpt) Read more at breakingnews.nypost.com ...


TOPICS: Business/Economy; Culture/Society; Extended News; Government
KEYWORDS: hitlary; lott; oil; profits
Navigation: use the links below to view more comments.
first previous 1-20 ... 61-8081-100101-120121-124 next last
To: raygun
They know there's oil in the GOM, and yet they come up with dry wells all the time. How's that?

Would you please list the dry wells drilled in the GOM in the past ten years? 3D seismic has come a long ways as well as drilling.

81 posted on 11/09/2005 4:23:41 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 66 | View Replies]

To: rdb3

It amuses me when government officials grandstand like this, particularly the Democrats. Why don't they worry about our government gouging us and wasting our tax dollars. They could actually do something about that. My tax bill is five hundred times larger than my gasoline bill. High taxes good, high oil prices bad? Only on the mind of a bureaucrat.


82 posted on 11/09/2005 4:27:00 PM PST by 12chachacha
[ Post Reply | Private Reply | To 1 | View Replies]

To: thackney
Would you please list the dry wells drilled in the GOM in the past ten years?

Three out of four here:

The firm spent most of 2001 studying the Gulf of Mexico. In 2002 it participated in four wells -- three of which were dry -- and farmed into the successful Neptune acreage, operated by fellow Australian company BHP Billiton, and participated in Neptune 3, which discovered 137 meters of gross hydrocarbons and 40 meters of net oil pay.

83 posted on 11/09/2005 4:30:23 PM PST by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
[ Post Reply | Private Reply | To 81 | View Replies]

To: thackney
Would you please list the dry wells drilled in the GOM in the past ten years?

Here's another:

In the Gulf of Mexico, we had five dry holes: Crested Butte, Main Pass 240, Shark, Fawkes and WindRiver. ... We expensed $39 million of well costs in the fourth quarter. In 2004, we drilled Main Pass 240 and found the objective sand wet. This well was abandoned in December 2004. Shark was an ultra-deep-shelf gas test on South Timbalier 174 that finished drilling during the first quarter of 2004. Following our evaluation, we expensed $25 million of well costs. While the well has been abandoned, we can re-enter it if required. Fawkes and Wind River, located in deep water, completed drilling and were abandoned in January 2005, resulting in a write-off of $13 million in 2004. Overall, dryhole and seismic costs in the Gulf of Mexico accounted for over 50% of our exploration expense. Margin text: Gulf of Mexico accounts for half our 2004 dry-hole and seismic costs.

84 posted on 11/09/2005 4:33:59 PM PST by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
[ Post Reply | Private Reply | To 81 | View Replies]

To: thackney
DoE report:
For 2003, a total of 29,984 wells (19,722 natural gas wells, 6,284 oil wells, and 3,978 dry wells) were drilled in the United States.

85 posted on 11/09/2005 4:37:10 PM PST by FreedomCalls (It's the "Statue of Liberty," not the "Statue of Security.")
[ Post Reply | Private Reply | To 81 | View Replies]

To: Phantom Lord
I would like to know how many gallons of gas are sold in America in a year.

in Aug 2005, 397,068,000 gallons per day. That is only gasoline. Total refined product 804,972,000 gallons per day.

EIA, Petroleum Navigator, Supply and Disposition

86 posted on 11/09/2005 4:42:40 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 72 | View Replies]

To: FreedomCalls

Thanks for the info. I'm very surprised it is so high. I work on field development exploration is finished so I am only exposed to the successful wells.

Individual wells are not the same as a geological area. I will give you million to one odds there is oil to be produced out of ANWR 1002 area, the coastal plain. The oil seeping out of the ground is a likely indication of the presence of oil.


87 posted on 11/09/2005 4:49:54 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 85 | View Replies]

To: thackney
field development after exploration is finished
88 posted on 11/09/2005 4:50:46 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 87 | View Replies]

To: jcb8199
One word defense:

Economics

I agree with you, but you're only half right. Economics and Accounting.

Those folks who do not understand how to read a P&L and Balance Sheet, then they should shut up, and stop living in a dream world where facts are not relevant.

89 posted on 11/09/2005 4:55:31 PM PST by Cobra64
[ Post Reply | Private Reply | To 11 | View Replies]

To: Cobra64
It is AMAZING how many people do not understand Markets and capitalism in a capitalist country. It's no wonder they sit on their porches waiting for a bus to move them from in front of a hurricane.

Anyone, and I mean ANYONE, can purchase oil, gasoline, heating oil, natural gas, or pork bellies, and take delivery of said commodity. If you think you can make more money with it than Exxon, then by all means go for it! The prices are "fixed" at auction with about a half billion people watching. The only people that have any chance of gouging are the retailers, and they have someone across the street to contend with.

One thing I was waiting for today was an executive to mention that about a third of gas price is tax! The gougers were right in front of the oilmen. If they tacked on 1/3 for extra profit with no effort in the fuel process, they would be tarred and feathered.

90 posted on 11/09/2005 4:57:47 PM PST by chuckles
[ Post Reply | Private Reply | To 74 | View Replies]

To: misterrob
Profits expressed in total dollars or percentage? These guys are making just under 10% profit which is pretty reasonable.

Dollar reporting is meaningless. Thers is no PERSPECTIVE. Last year the petroleum industry earned 7.7% on total revenue.

I'd like to know how many folks think this is "excess profits."

Then again the whiners probably are too lazy to go to work, contribute the maximum to their 401k, and are either school teachers, or are living on welfare.

91 posted on 11/09/2005 5:01:04 PM PST by Cobra64
[ Post Reply | Private Reply | To 14 | View Replies]

To: Fitzcarraldo
Fine, but let's see a reasonable fraction of those profits go into new refineries and infrastructure. It would be good for the overall economy to put some stability into the fuel price structure.

Diall 1-800-CONGRESS. To ALLOW the oil companies to explore, drill, refine and distribute product to the market.

People who DO NOT UNDERSTAND this industry really twist my shorts. Everyone is a friggin' expert, but have no clue as to complexity of the industry. It is not as simple as thawing a sirloin in the microwave./rant

92 posted on 11/09/2005 5:13:56 PM PST by Cobra64
[ Post Reply | Private Reply | To 2 | View Replies]

To: FreedomCalls
To me, it isn't so much the ad rates themselves as it is the number of ads they are willing to sell. To me, campaigns are a boon to the MSM as they are a regular cash cow.

To compare to Big Oil, consider that Americans are willing to pay over $2 for a gallon of water, but complain about paying $2.50 for a gallon of gas. Think about how many jobs it takes to create that gallon of gas. Think about how many jobs it takes to create the plastic bottle that holds that gallon of water.

The usual retort is that people don't buy just one gallon of gas, and when you buy a full tank at close to $30, then it's a bigger deal than just that one bottle of water. This is the same with campaign ads. The individual ad may not cost that much (relative to "usual" ad costs), but the proliferation of ads is like the tank of gas in that it's a windfall to the MSM.

-PJ

93 posted on 11/09/2005 5:22:17 PM PST by Political Junkie Too (It's still not safe to vote Democrat.)
[ Post Reply | Private Reply | To 80 | View Replies]

To: rdb3
If I was these guys, I'd tell Boxer and the rest to shove it. If they ran their companies like those idiots handle our money, we'd all be walking to work.

God I hate the sanctimonious a-holes.

94 posted on 11/09/2005 5:24:15 PM PST by lawnguy (It works Napoleon, you don't even know.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: thackney
Roger that on the field development exploration. I used to run seismic and geophysical prospecting data processing mainframes back in the early '80's (I processed hundreds of 3x5x8' wooden shipping crates filled with 9 track tape reels of North Slope shot-data for 2D processing. And back then 1:10 wildcat successes was considered de facto standard for a prospective field to be economically viable. That was based on approx. $25 million/well 1981 $U.S. While the success rate certainly went up, cost/well quadrupled.

...wildcat success rate...is the percentage of wildcat wells drilled that successfully find new oil fields, regardless of field size. The average success rate for the U.S. from 1977 to 1996 is estimated at 18%... In other words, it is expected that, on average, for every five wildcat wells drilled between 1977 and 1996, one will discover a new oil field.

source

Because...prospects lie thousands of feet below the earth's surface, uncertainty and trial-and-error pervade the exploration process. It is a painstaking and hugely expensive enterprise, with low success rates. Historically, new field wildcat exploration has succeeded at a rate of one productive well for every five to 10 wells drilled....3-D seismic and 4-D time-lapse visualization, remote sensing, and other exploration technology allow explorationists to target higher-quality prospects and to improve success rates by as much as 50 percent or more.

source

Baseed on the above Blue Ridge Group statement, through use of the latest 3D & 4D technology, the 50% improvement advertised would imply that at least one out of every 5, to as many as 1 out of 2.5 wells sunk will strike oil (wildcat success).

95 posted on 11/09/2005 5:33:12 PM PST by raygun
[ Post Reply | Private Reply | To 87 | View Replies]

To: rdb3
There is a "growing suspicion that oil companies are taking unfair advantage," Sen. Pete Domenici, R-N.M., said, opening the hearing in a packed committee room.

"The oil companies owe the American people an explanation," he declared.

No, Mr. Domenici, it's MORONS LIKE YOU who need to explain to the American people why so-called "conservative leaders" have let the education system deteriorate to the point that even a cursory understanding of supply-and-demand economics (as well as the negative effect of excessive government regulation) is non-existent in this country.

The slow death of the Republican Party as a conservative movement marches on. It may not happen in my lifetime, but hopefully, someday, after the Republicans and the Democrats morph into one, perhaps a real conservative political party will emerge in this country.

American free-market capitalism. {{SIGH}}. It was nice while it lasted. Turn out the lights.

96 posted on 11/09/2005 5:35:44 PM PST by Libertarian444
[ Post Reply | Private Reply | To 1 | View Replies]

To: rdb3

Well if these "lawmakers/tax raisers" were so darn concerned about the high price of oil/gas they sure could have cut their profiteering, I mean taxes.


97 posted on 11/09/2005 5:38:19 PM PST by Just mythoughts
[ Post Reply | Private Reply | To 1 | View Replies]

To: All
Gouging is certainly going on.

Not from big oil though but from the whoreish regulators comprised of local, State and Federal bureaucracies.

Pssss, their "profits" combined are 4 times as big as "big oil".
98 posted on 11/09/2005 5:48:08 PM PST by rollo tomasi (Working hard to pay for deadbeats and corrupt politicians.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: chuckles
It is AMAZING how many people do not understand Markets and capitalism in a capitalist country. It's no wonder they sit on their porches waiting for a bus to move them from in front of a hurricane. Anyone, and I mean ANYONE, can purchase oil, gasoline, heating oil, natural gas, or pork bellies, and take delivery of said commodity. If you think you can make more money with it than Exxon, then by all means go for it! The prices are "fixed" at auction with about a half billion people watching. The only people that have any chance of gouging are the retailers, and they have someone across the street to contend with.

One thing I was waiting for today was an executive to mention that about a third of gas price is tax! The gougers were right in front of the oilmen. If they tacked on 1/3 for extra profit with no effort in the fuel process, they would be tarred and feathered.

My wife lived in this industry at Texaco's World headquarters.

If there were any "gouging," it was at the Distributor part of the supply chain. It was well known that many of the large distributors were fukcing the retailers. She has told me thousands of stories of the Distributors hosing the retailers.

My wife and I knew four Texaco CEOs, and they dropped these bar flies like dead pidgeons.

The sheeple haven't a clue about the industry, the supply chain, and the retail market.

All we hear on the MSM is "price gouging" mantra.

The sheeple are dumber than wool.

99 posted on 11/09/2005 5:56:37 PM PST by Cobra64
[ Post Reply | Private Reply | To 90 | View Replies]

To: rdb3
Funny, we don't hear a much about the government record profits on oil & gas.

States Receive Record $1.7 Billion in Mineral Revenues ($5.4 billion to the U.S. Treasury in Fiscal Year 2005)

100 posted on 11/09/2005 6:05:16 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 1 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-20 ... 61-8081-100101-120121-124 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson