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March 23, 2008


George Bruce

The simple explanation is that the oil companies' share of world production is shrinking as more and more production is controlled by governments.

George Bruce

The simple explanation is that the oil companies' share of world production is shrinking as more and more production is controlled by governments.

Ron Fischer

Even simpler: it makes the most sense for Exxon-Mobil to maximize profit by doing nothing that would lower oil prices, such as expanding output significantly.

Randy White

Time to Break Glass In Case Of Emergency.

Municipalities had better digest what is in Portland Oregon's Peak Oil Task Force Report called: Descending the Oil Peak: Navigating the Transition from Oil and Natural Gas



The reality is that the IOCs (International Oil Companies) such as Exxon have been excluded from doing business is so much of the world that they have little capability to influence production and prices. It is correct that the interests of the IOCs -and even less of the National Oil Companies, are not the same as the short term interests of oil consumers. It should come as no surprise if the oil producers were to stretch some of their investments into future production, or even to not pump at maximum volume. This sort of behavior -if it is in fact occurring is actually to the benefit of the consumers, as it should stretch out the transition from cheap to dear oil. Many entities who believe they can benefit from blunting the message of peak oil are trying to do just that. The favorite technique is to argue that there is more oil in the ground than has been consumed so far. That is correct as far as it goes, but the reality is most of the remaining oil is much more difficult to produce than the older depleted fields. This means that capital and "lifting" costs will be much greater than had been the case. Also the amount of engineering expertise per barrel of oil produced is going to increase, at the same time as large numbers of aging petroleum engineers are reaching retirement age. Peak Oil does not mean that oil production will precipitously drop to zero, but is does mean that the age of cheap plentiful oil is over.

Rod Adams

If the major oil companies would recognize that they are in the heat supply business, not just the petroleum business, they would be able to find excellent prospects for investing their current cash surpluses. The end of plentiful energy is not over - there is a tremendous reserve of uranium and thorium that has just barely begun to be tapped.

Of course, the particular characteristics of that source of heat are quite different from those of petroleum, but the oil companies are full of smart, adaptable people who are well suited for taking advantage of those differences. The energy density, the lack of emissions, and the accessible reserves located in stable, democratic countries are all advantages that should be exploited.

Of course, it might mean some short term demand destruction for the company's current portfolio of income producing assets, but since that base is shrinking anyway, now is probably a great time for the inevitable transition.


Africa and the Arctic are the last two unexplored areas for fossil fuels. Nigeria and the Congo are getting finecombed by the Chinese; and the Russian GAZPROM has exploration teams throughout the Arctic.

37% is pretty dramatic...voluntary cutback to drive up prices to get revenue for a new binge of exploration and refinery building or a shortage of crude?

Lori Glauser

Can oil companies get refineries financed? Without a positive earnings outlook for 30 years (to pay down the debt) they probably can't get funded. Given no new refineries being built, this tells me the oil co's don't foresee 30 years of continued profits.

Unlike foreclosed homes, which can be resold by the bank, what does one do with a refinery that "foreclosed" due to lack of supply in 15 years?

Well, refineries do tend to sit on waterfront property just an electric car/monorail commute to big cities. Maybe the big oil companies' last gasp, around 2025, will be in the real estate business. ;)


I think oil companies see plenty of continued profits in the next 30 years from their existing refineries. They just don't see profit in building new ones. Continuing the real estate analogy, the home they have now suits their needs into the future. Buying a second home would be risky.

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If you have water and hills nearby, pumped hydro is, by far, the best way to go.

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well.. there are good things happening in the Oil and Gas sector too. Did you know that there is a company in India that has innovated in their oil and gas drilling which led them to win an Innovation for India award by Marico Innovations Foundations!

I call that a huge turning point for this industry! They decided to explore for Oil and Gas in the east of India, where there had been no traces. If you want to read more about this, check out this slideshow.


Oil Additive

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Thanking you Nice post.

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Keep it up!!


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You are one of the rare people who can post something like this.


the answer as we all know is diversify our energy sources - Exxon lose their grip on us and we get the option to shop wisely and gain more choice.. none of the major organisations are going to wade in and offer support when its gets tough..

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There are alternatives available but the oil companies are not going to endorse them as long as there is oil.

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Has this been the case up until now? It's almost 2012.

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I don't think they should be producing more oil, right? We don't need to be burning more, we should be putting money towards alternative sources of energy instead!

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These companies need to realize that their time is numbered, at some point they will either need to shift focus elsewhere or go out of business when the oil runs out. Hopefully they work on being better for the environment instead of draining it.

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This makes me want to sell my car and walk everywhere.

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Is this because they want to make more money, like you say higher oil prices mean more profit for oil companies...

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Are they running dry or just trying to turn a better profit?

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Sounds a little like Exxon is planning on scamming us.


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