Houston TX (SPX) Nov 14, 2007A study released today by Rice University's Baker Institute for Public Policy finds that the "Big Five" international oil companies (IOCs) are spending less money on oil exploration in real terms despite a four-fold increase in operating cash flow since the early 1990s. On the flip side, the study, "The International Oil Companies," finds that second-tier oil companies are spending more in exploration, positioning themselves to be in better shape when it comes to future oil reserves.
The analysis is based on Baker Institute research on investment expenditures by the IOCs, the next 20 largest U.S.-based oil firms and national oil companies (NOCs). Data were culled from U.S. Securities and Exchange Commission filings going back to 1995 and, in the case of NOCs, to news reports and other public data.
The study found that the Big Five (ExxonMobil, Royal Dutch Shell, BP, Chevron and ConocoPhillips), used 56 percent of their increasing cash flow on share repurchases and dividends, which were good for investors in the short term but put at risk the companies long-term oil reserves.
"The handwriting is on the wall. The oil majors are not replacing reserves," said Amy Myers Jaffe, co-author of the report and the Wallace S. Wilson fellow for Energy Studies at the Baker Institute. "It's as if they are slowly liquidating their long-term asset base. They may see a declining rate of production over time and eventually that is bad news for both their shareholders and consumers." Read More
No comments:
Post a Comment