Another round of sky-high quarterly profits for oil companies

The Big Five of Big Oil - Exxon Mobil, Chevron, ConocoPhillips, Shell and BP - reported yet another round of sky-high quarterly profits last week, thanks largely to soaring oil prices. For the oil majors, this run-up in prices has meant:

- Exxon Mobil reporting a 36% increase in quarterly profit to $10.4 billion - its second-highest amount ever, after $10.7 billion in the fourth quarter of 2005.
- Chevron seeing its quarterly profit jump 18% to a record $4.4 billion.
- ConocoPhillips posting a 65% increase in quarterly profit to a record $5.2 billion.
- Royal Dutch Shell reporting a 40% gain in quarterly profit to $7.3 billion.
- London's BP posting a 30% increase in quarterly profit to a record $7.3 billion.

With many analysts saying that rising demand and limited supply basically leave oil prices nowhere to go but up, is this the new status quo for the oil industry - a gusher of record profits quarter after quarter as consumers keep getting pummeled at the pump? "Yes," answered Matthew Simmons, chairman of Houston's Simmons & Co. International, the world's largest investment bank focusing on the energy business. "And we shouldn't give the companies any credit for their performance," he said. "It doesn't have anything to do with them. I wouldn't be surprised if oil reached $200 a barrel by 2010."

Simmons says that he believes the global supply of oil has reached its peak, and that from this point on, prices will soar as demand increasingly outstrips available resources. As such, he said oil companies should be dedicating their "mountains of excess cash" to seeking new energy sources before rising fossil fuel prices break the backs of world economies. "These companies have an enormous responsibility to address the severity of our problems," Simmons said. "We need an honest dialogue about this."

Asean mulls joint oil stockpile

peakoil.com -> financialexpress.com :

Asean countries are considering strategic oil storage after a proposal for joint stockpiling from South Korea, which hopes to pass on technical expertise. The proposed stockpiles would be in Southeast Asian countries and could use crude from the region's producers, such as Indonesia and Malaysia, or from Middle East producers, said Lee Won-Gul, South Korea's vice-minister for commerce, industry and energy.

Tokyo and Seoul, both required to hold reserves as members of the International Energy Agency (IEA), have been pushing others in Asia to build up government reserves, sharing the burden of keeping stocks in case of sudden outages. Analysts said an emergency supply buffer was a good idea, but saw little interest from poorer Southeast Asian nations.

Blast at Indonesia oil refinery; 150 hurt

peakoil.com -> news.yahoo.com :

An explosion at an oil refinery in Indonesia early Saturday injured nearly 150 people and caused about 7,000 residents to flee their homes. The explosion took place at a joint Pertamina-Petrochina oil refinery in the eastern Java province as workers tried to contain a gas leak by setting it on fire. There were no deaths reported, but nearly 150 people were hospitalized suffering from respiratory problems after inhaling gas, local police chief Rumhadi said.

(2006-08-01 11:42:32 SGT) [Energy] Permalink

Virgin Fuel : Branson's next big bet

peakoil.com -> treehugger.com -> money.cnn.com :

Sir Richard Branson has his fingers in all sorts of interesting pies. Some ideas worked out (like Virgin Atlantic Airways) and some fell flat (like Virgin Cola and Virgin Brides), but he's always working on the next big thing, and he thinks he may have found it.

With airlines, express trains, and limousine services, his company's contribution to global warming worries him, so along with investing $1 billion in alternative fuels over the next four years, he's also hard at work developing a new kind of fuel which "if we've got it right, it could be a very important breakthrough. We think this fuel will work in cars and trucks and trains within a year. And we're hoping that it might work in commercial jet engines within five years, possibly sooner. So it will be able to work in Virgin Atlantic planes one day."

The project will be called (you guessed it) Virgin Fuel, and Branson seems convinced that he's on to something big. No matter how you slice it, a billion dollars for alternative fuel development and the possibility of a new super-fuel is a pretty good thing.

(2006-08-01 11:33:53 SGT) [Energy] Permalink

Indian bank staff strike over outsourcing

business-times.asia1.com.sg :

As many as half a million employees of Indian banks went on strike in protest against their employers' plans to farm out work to private companies. Indian bank workers are concerned about losing their jobs as the government says it can't afford to inject fresh funds and is encouraging stake sales and mergers.

The central bank has said that it would allow banks to outsource banking services to a new payments firm owned by public and private sector banks in a bid to create a central payments system, aimed at streamlining current payment methods that are a mix of electronic and antiquated paper based systems. The government has also announced plans to allow foreign banks to set up wholly owned units or to buy stakes in private domestic lenders. Bank unions said that the privatisation and outsourcing moves would lead to job losses.

- Now this is news indeed : *Indians* worried about outsourcing? The very country which has been the final destination for millions of jobs in call centres, IT, legal, accountancy and more? Interesting.

(2006-08-01 11:28:37 SGT) [Biz] Permalink

Stock market crash hits India's airline industry

business-times.asia1.com.sg :

The collapse of the Indian stock market has taken a toll on the country's civil aviation sector. Flying has become much cheaper with the arrival of low-cost airlines, price cuts and stiff competition. But strapped of equity, most of these operators are in the red. Crumbling stock prices have come into the picture, making it hard for airlines to raise money to fund expansion.

The stock market crash has compounded problems in a sector that is suffering from over-capacity and slim margins. Having committed to buy aircraft, most operators are not in a position to pull back. Investment bankers have sounded warning bells.