Tuesday August 01, 2006

Another round of sky-high quarterly profits for oil companies

peakoil.com -> sfgate.com :

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."

See also :

1. Exxon Mobil profit tops $10 billion
2. Shell 2Q2006 profit rises 36% to $6.3 billion, but production falls
3. US oil defends record profits

(2006-08-01 12:19:41 SGT) [Energy] Permalink

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