I know the evil oil companies are the boogeyman for high oil prices. Congress loves to bloviate about them whenever oil prices rise much above $100 a barrel. The fact that they don’t control virtually any of the oil reserves in the world seems to go unnoticed by the bloviating morons. Oil companies make a lot of money because they are the only entities capable of extracting, transporting, refining and delivering oil and oil based products to customers around the world. Countries control the oil reserves. Those are the facts.
Royal Dutch Shell is one of the biggest companies on the planet. They are a profit machine. They just announced that their 4th quarter profits would fall by 70% versus last year. It seems that extracting the remaining oil in the earth is costing a lot more than it used to. It seems their investment in U.S. shale acreage has proven to be a disaster. They are writing off billions of shale oil investments.
Does this jive with the storyline being peddled by Wall Street, Obama, and the mainstream media? If one of the biggest corporations in the world cannot make a profit extracting shale oil, how is it going to make the U.S. energy independent.
It will make us energy independent at $150 per barrel cost. Of course, our economy would collapse at $150 per barrel oil. It seems we have a dilemma. Enjoy the ride. It’s gonna be a little bumpy.
Shell warns over profit, citing exploration costs
By MarketWatch
LONDON– Royal Dutch Shell PLC warned Friday that fourth-quarter profit would be significantly weaker than recent levels partly because of higher exploration costs.
The company also cited lower upstream volumes and weaker industry conditions in downstream oil products for the weaker performance.
The oil major expects to post fourth-quarter earnings of $2.2 billion on a current cost of supplies basis–a figure that factors out the impact of inventories, making it equivalent to the net profit reported by U.S. oil companies–down from $7.3 billion a year earlier. Full-year earnings on a CCS basis are expected to be about $16.8 billion, down from $27.2 billion last year.
The company expects to publish full fourth-quarter figures on Jan. 30.
“Our 2013 performance was not what I expect from Shell,” Chief Executive Ben van Beurden said. “Our focus will be on improving Shell’s financial results, achieving better capital efficiency and on continuing to strengthen our operational performance and project delivery.”
The profit warning is rare for an oil major prized by investors for slow but steady profits. Despite relatively high and stable oil prices, Shell has struggled in 2013 with costs and some big investments that haven’t worked as planned, taking a large write down for example on its U.S. shale assets. It has also looked to sell off assets worth billions of dollars.
All majors have struggled with spiraling costs in many of their projects, but Shell has also been hit by lower volumes at a time when it has had to undertake more maintenance than expected. It said it would take a $700 million charge on its core exploration and production unit because of costs and lower volumes.
Looks like you might get some good deals on used Chrysler 300’s from Mantua.
Facts are inconvenient things, no?
Only thing I would add is that the only reason oil companies are able to be so profitable is because their security and military is paid for by fiat and taxpayer.
No way would they have such profit margins if they had to pay for their own wars, their own aggressions, or their own safety patrols to get the oil through geo-political hotspots.
I’m no longer allowed to speak about shale oil. I’ve been schooled in the FACT that my sources are conspiracy theorists all, whom apparently only make money of selling me fear. Saying that shale oil is not profitable long-term (within our current paradigm of price vs. economy), is, apparently, akin to saying that the earth is flat.
But we have no worries, hub wisely traded profits (of which I’m reminded we have LOST) for a couple grand of silver, so when the train comes off the rails we are going to be just fine.
Trust me, well him, well the MSM, because if this were true, then CNBC and Cramer would be telling us so.
Better living through delusion and hopium is the way to go. At least if you believe in the intelligence of masses and rich, evil, men.
Besides we are right on the cusp of energy revolution that will continue our over-use of the planet for the next 100 years. No worries.
So I’m told.
Thanks Admin for sharing this.
@TE – If my wife was as oblivious as your SO, I’d cut her loose in a heartbeat.
You are a much better person than I.
for those who want to delve deeper and get a preview of coming attractions:
I have no connection to Gail, I just find her blog interesting and informative on the peak oil issue.
One of the sidebars to the fracking/shale oil story is the abandonment of fracking wells that have played out. According to a recent Max Keiser report, seems the oil company’s business plan is, set up as many wells as possible, pump like crazy, then when the wells dry up, abandon the wells and go BK. Cleanup is on the backs of the taxpayer and the bandits cash is secure. Seems Wyoming is littered with these abandoned dry wells.
That was a typo, it should be ‘whale oil’.
If Wyoming is littered with abandon wells some it not doing their job. Abandon wells are required to be plugged with cement, an expensive process. Stripper wells are not required to be plugged until they are abandon.
TE, Is your wise hubby not capable of doing his own research or is watching Cramer considered research? You must have the patience of a Saint to put up with that level of willful ignorance. You seem like you have a heart of gold and intelligence to match. What a shame that it is not recognized.
Whenever I talk to people about Doom I start by telling them not to believe me, to do their own research. If they aren’t willing to do that then fuck ’em, I don’t bother unless they bring it up to me.
I_S
Shale oil is going to save the world, by about 48 months.