O/T Why Exxon won't produce more oil

WHY EXXONMOBIL WON"T PRODUCE MORE OIL
The energy giant is being managed to achieve an acceptable investment return for shareholders, not for the benefit of consumers. Less supply of crude oil means higher prices -- and record profits.

In ExxonMobil"s (XOM, news, msgs) presentation to analysts in New York City in early March. flashed a chart that showed the company"s worldwide oil production staying flat through 2012.

Ponder that for a minute. Exxon is the largest publicly traded company in the energy business. In fact, it"s the most profitable company in the history of capitalism, earning a record $40.6 billion last year on sales of $404 billion. Yet even with crude oil prices near all-time highs, Exxon isn"t planning on producing any more oil four years from now than it did last year. That means the company"s oil output won"t even keep pace with its own projections of worldwide oil demand growth of 1.3% a year.

It really goes back to what is an acceptable investment return for us," Tillerson said. In other words, producing more barrels just to ease prices for consumers is not part of the company"s calculations.

Last year, ExxonMobil led the industry with a return on capital of 32%.

Big oil companies can continually miss their targets or even target no growth and still shine on Wall Street due to the peculiar nature of commodity businesses. Less supply of a commodity means higher prices. Higher oil prices mean more profits for the oil companies.

The company also outlined a slew of big projects, 12 of which are starting up this year. These include the 600 million barrel Kizomba C development off the coast of Angola that began producing on New Year's Day and another in a string of giant liquefied natural gas facilities in Qatar. Unlike oil, Exxon's production of natural gas -- much of it liquefied and shipped in tankers to Asia and Europe -- is projected to climb over the next four years.

But how could oil production be flat? Peer into Exxon's historical numbers and you see the problem Tillerson faces. Since 2000, Exxon's oil output from two of its largest regions, the United States and Europe, declined a startling 37%. That's 500,000 fewer barrels a day in just seven years.

Exxon reported 100,000 fewer barrels per day last year alone due to the nature of the contracts big oil companies sign with countries such as Angola and Nigeria. In such contracts, foreign companies put up the capital to fund new projects, and they are paid back in barrels. If oil prices rise above certain levels, Exxon gets to keep fewer of those barrels as profit for itself.

Exxon plans on bringing new fields online in Russia, the Middle East and Africa over the next four years, but they won't be enough to generate growth beyond what the company is losing due to the maturation of its fields in the North Sea and Alaska, the nationalization of its fields in Venezuela and volumes lost due to those production-sharing agreements with other countries"

Why should they try to keep prices down? Why should they increase production for the sake of increasing production?

Exxon is a private corporation that sells petroleum products. That is all.

The only reason they care about you is to buy their stuff. They are graded on their quarterly performance.

If they do poorly they can"t borrow money at a low interest rate and that sort of thing so they have to keep their stock rating high. Their corporate vision is in the quarter of the year sort of thing. Not conducive to good business practices, but the stock market is king and they have to Kiss A...

What you need to do is to not try to fight "city hall". Join them.

Sorry , but this is the truth.

Mark

No company pays taxes. Yes, I said that no company pays taxes.

A company merely adds the taxes to the price it charges its customers for the products it sells. If you raise the taxes that Exxon, or any other company pays, they will pass it on to the consumer in higher gasoline and diesel fuel prices. The government forces companies to be tax collectors. If a company cannot raise prices enough to pay the taxes, it goes out of business.

The customers, that is you and me, the end product consumers, pay all the taxes. It has always been that way, it will always be that way.

Why is it that some people don't understand that?

Instead of posting nonsense on internet forums, why not spend your time and energy urging your Congressmen and Senators to spend less money?

Entitlements are now more than 50% of the federal budget. Way more than any other expense, including defense. Yet polititians get elected by promising more and more entitlements to more and more people. How can that be? Think about it.

Sure, raise taxes on Exxon. Then wonder why gas prices go up.

An entitlement, whether it benefits a company or a person is still paid for by you and me.

We need to reduce overall government spending before we can have truly lower taxes.

Perhaps a complete overhaul is needed.

Put the government on a diet!

Got to love it. With inflation every year is a record even if all you do is hold your own. This year hourly wages will hit record levels. This year Social Security recipients will receive record payments. This year welfare recipients will receive record payments.

Sounds like fun.

My point exactly.

If you think the profits of oil companies are too high, buy some stock in the company and enjoy the dividends and profits. Sadly, as a little guy, I can buy 100 shares of XOM and share in the profits easier than I can buy 100 shares in a Midwest corn acreage. Which is the true closed monopoly ??

Hugo Chavez is trying that with food in Venezuela and it's working out great.

Link

CARACAS, Venezuela -- Meat cuts vanished from Venezuelan supermarkets this week, leaving only unsavory bits like chicken feet, while costly artificial sweeteners have increasingly replaced sugar, and many staples sell far above government-fixed prices.

President Hugo Chavez's administration blames the food supply problems on unscrupulous speculators, but industry officials say government price controls that strangle profits are responsible. Authorities on Wednesday raided a warehouse in Caracas and seized seven tons of sugar hoarded by vendors unwilling to market the inventory at the official price.

Major private supermarkets suspended sales of beef earlier this week after one chain was shut down for 48 hours for pricing meat above government-set levels, but an agreement reached with the government on Wednesday night promises to return meat to empty refrigerator shelves.

Shortages have sporadically appeared with items from milk to coffee since early 2003, when Chavez began regulating prices for 400 basic products as a way to counter inflation and protect the poor.

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Now instead of paying high prices for food the poor go hungry because there isn't any food.

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We all saw how well that worked. The term "scrap heap of history" defines how it ended.

Even with "gun barrel regulation" and natural resources greater than any other nation in the world (including the United States) the Soviet people still starved in the bread lines until they got rid of the government regulators that enforced a policy that ensured shortages.

The US post office isn't regulated - its run and subsidised by a government entity that for years claimed a legal monopoly on the industry. Its also one of the most expensive ways to convey information. Today everyone from Fed Ex to DHL takes a big chunk of their business.

To ensure that they keep their remaining "general delivery" the post office has also made it illegal for private carriers to use your privately paid for mail box for delivery effectively eliminating any competition.

p.s. WE CAN TELL YOU ARE NOT IN SCHOOL!! ha ha

As a corporation they have a fudiciary duty to their stockholders, claiming to exist for the benefit of consumers will land the board in court - as Henry Ford learned the hard way when he was successfully sued by the Dodge Brothers.