"Exxon's flat oil forecast was even more surprising because it came during a meeting when the company was trumpeting a big increase in capital expenditures -- to at least $25 billion a year going forward, up from $21 billion last year.
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"
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Today's Featured Article - Third Brush Generators - by Chris Pratt. While I love straightening sheet metal, cleaning, and painting old tractors, I use every excuse to avoid working on the on the electrics. I find the whole process sheer mystery. I have picked up and attempted to read every auto and farm electrics book with no improvement in the situation. They all seem to start with a chapter entitled "Theory of Electricity". After a few paragraphs I usually close the book and go back to banging out dents. A good friend and I were recently discussing our tractor electrical systems when he stated "I figure it all comes back to applying Ohms Law". At this point
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