Despite rocketing prices, outlook is bleak for oil majors - Mercedes-Benz Forum

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post #1 of 3 (permalink) Old 07-06-2008, 11:54 PM Thread Starter
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Despite rocketing prices, outlook is bleak for oil majors

Despite rocketing prices, outlook is bleak for oil majors
by Delphine Dechaux
Sun Jul 6, 5:22 PM ET

Despite record crude prices, the major oil companies are struggling to access resources that are being jealously guarded by national companies with whom they are forced to establish partnerships.

As paradoxical as it may seem, high oil prices do not mean a golden age for the likes of ExxonMobil, Chevron, Totalor BP.

Of course, with a barrel of oil at more than 140 dollars, they are seeing major profits, but the future has never seemed so uncertain.

The problem is access to reserves. The oil majors now control less than 10 percent of world resources of gas and oil, against 70 percent in the 1970s, according to figures released by the office of Ernst and Young at the World Petroleum Congress in Madrid.

As a result they are being forced to explore in increasingly extreme conditions.

"Oil in deep water or in regions that are difficult to access (such the Arctic) are what are left for international companies," said Christophe de Margerie, the head of French group Total.

The majors are also competing with the national oil companies, which are not content to just enjoy direct access to the resources of their respective countries but are making inroads elsewhere.

"National hydrocarbon companies are no longer confined to within their borders," OPEC president Chekib Khelil said, citing the examples of China's Sinoc and CNPC, Malaysia's Petronas or Algeria's Sonatrach.

"A lot of international companies were previously national companies, such as BP and Total," said Khelil.

"It's more and more difficult now to know which are national companies and which are majors because the majority of the nationals are becoming internationals," said Linda Cook, head of gas and electricity at Anglo-Dutch Shell.

Even their superior technology is not enough, as national oil companies can can appeal to service firms such as Schlumberger or Technip.

Of course, some like Saudi Aramco, have no problems in that respect. The Saudi company is developing "nanorobots" with a diameter of less than the size of a human hair to look for deep resources in rocks.

But the majors still hold some aces, such as their expertise in more ambitious projects or their financial bases.

"The increasingly massive size of oil and gas projects and their complexity ensure that oil companies continue to play a key role," as they have the advantage over service industries of being the sole representative throughout the project, Ernst and Young said.

"In most of the cases, we (Shell) will continue establishing alliances with state companies, in their and our countries, specially with gas, which needs big investments," said Linda Cook.

But the majors can longer appear to be preying on the countries where they are operating.

"We can do a lot of things more than our regular work, such as education and training," said de Margerie. "It is essential for Total to go beyond its traditional role."

Copyright © 2008 Agence France Presse.
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post #2 of 3 (permalink) Old 07-07-2008, 06:55 AM
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It is the rise of National Oil Companies that is behind much of the rise in crude. They have become efficient enterprises that are fairly distributing the oil wealth among the people who actually own the resource instead of enriching a few Oil Fascists. Funny how socialism, which is not supposed to work according the RWNJ Theory, is beating our brains out from Venezuela to China.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

-President Barack Obama, 1st Inaugural address
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post #3 of 3 (permalink) Old 07-07-2008, 07:03 AM
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I guess I can now see why war is sustainable as far as those companies are concerned. How dare those countries nationalize the oil that should belong to Exxon and the likes eh? Maybe a few calls to the White House will do the trick eh
What are they going to tell the President? It's our oil and those savages are squatting the land above it eh Can you please make up another yellow cake story and send the kids over there to secure democracy?
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