Big Oil Starting To Speak Out

[ArtfulD]

Seems big oil companies starting to speak out about the oil issue now.

http://www.willyoujoinus.com/

http://news.yahoo.com/news?tmpl=story&u=/f...420051357075359

[justsignedin]

Seems big oil companies starting to speak out about the oil issue now.

http://www.willyoujoinus.com/

http://news.yahoo.com/news?tmpl=story&u=/f...420051357075359

<{POST_SNAPBACK}>

yeh great 1 home page, 1 page not found. Who's doing the homework, me or you ???

[ArtfulD]

Try http://news.ft.com/cms/s/7af6dc38-050c-11d...000e2511c8.html

It appears Yahoo might have pulled the story because they displayed an entire subscription only article.

Other than that, no need to be an ass about it.

[justsignedin]

Try http://news.ft.com/cms/s/7af6dc38-050c-11d...000e2511c8.html

It appears Yahoo might have pulled the story because they displayed an entire subscription only article.

Other than that, no need to be an ass about it.

<{POST_SNAPBACK}>

Ok sorry about that. What about the home page. Where di i go from there.

You're the 1 with the info.

[Buff-horns]

The Financial Times reports that international oil companies have advertising campaigns warning that the world is running out of oil and calling on the public to help the industry do something about it.

Most of the executives of the world's five largest energy groups generally maintain that oil projects are viable with the price at which they test a project’s viability is within the around $20 a barrel. range. But their advertising and some of their companies' own statistics appear to tell a different story.

ExxonMobil, the world's largest energy group, said in a recent advertisement: “The world faces enormous energy challenges. There are no easy answers.” And the companies' statistics back up the sentiment. In The Outlook for Energy: A 2030 View, the Irving, Texas-based company forecasts that oil production outside the Organisation ofthe Petroleum Exporting Countries, the cartel that controls three-quarters of the world's oil reserves, will reach its peak in just five years.

Chevron, the US's second-largest energy group, sends a similar message, but goes two steps further. “One thing is clear: The era of easy oil is over. We call upon scientists and educators, politicians and policy-makers, environmentalists, leaders of industry and each one of you to be part of reshaping the next era of energy. Inaction is not an option,” was the message in a recent advertising campaign. The company has even set up a website, www.willyoujoinus.com, warning of the pressures of high demand and fewer fields and offering a forum of discussion.

One senior executive at an oil company not involved in the advertising campaigns speculated that his counterparts were attempting to buy themselves some slack to go after the messier, more expensive, dirty oil. Another executive said it may buy some sympathy for the difficulty many companies are having in growing developing their production and reserves.

Total, the French oil company, this week made the latest acquisition in theCanada's vast Athabasca oil sands, where companies are extracting extra tar-like bitumen from sand in an expensive and environmentally tricky mining operation.

Yves-Marie Dilibard, Total's director of communications, explaining the logic behind its campaign, said: “Tomorrow's energy needs mean developing new energy techniques, going further and deeper in the search of oil and gas. That's at the heart of Total's work today.”

Royal Dutch Shell and BP, Europe's biggest energy groups, have recently felt the effects of venturing into more difficult frontiers. Shell was forced by environmentalists to reroute a pipeline that threatened rare whales in Russia's arctic and last month warned of a $10bn (€8bn, £5.6bn) cost overrun at its Sakhalin project there. Meanwhile, BP battled with a platform in the deep waters of the US Gulf of Mexico that was severely bent by hurricane Dennis.

In its advertisements BP touts new energy alternatives, while ExxonMobil, which has unapologetically abandoned alternatives that have not been profitable, says in one advertisement: “Wishful thinking must not cloud real thinking.”

But answering the concerns of the consumer, even about the possible shortage of oil, is not the primary job of an oil company. Its most important stakeholders are its stock shareholders, some of whom have been left perplexed by the advertisements after hearing a very n altogether different message at last week's earnings conferences.

Neil McMahon, analyst at Sanford Bernstein, said: “We think these messages are at odds with the comments normally made to investors regarding future oil prices and the ability of producers to meet demand, and we wonder if perhaps those messages are actually a better indicator of the companies' thinking.”

Consumers are also not the primary concern of an even more important group: the national oil companies of producing countries, such as Saudi Arabia. The kingdom has as its first priority its growing population and the stability of the regime. This – together with the increased difficulty of finding new oil – is part of the reason for the capacity crunch, analysts and executives agree.

No amount of advertising is likely to change that dynamic.

In related news, the FT in a report says: Terrorists yesterday struck oil facilities in the US and Saudi Arabia, pushing oil prices to a record $120 a barrel and doubling to $5,214 the expected annual petrol bill for the average US household. Economists warned of the imminent collapse of the US's economic recovery and a loss of more than 2m jobs, the largest drop since 1945.

While none of this is true, the scenario is thoroughly plausible, according to high-ranking former government, military and intelligence officials who made up the US cabinet in a simulation exercise that is gaining increasing attention from members of Congress, the White House and oil executives.

"The risk of supply disruption in the oil markets now appears to be at one of the highest levels in history, primarily because of the thin cushion of spare capacity," John Dowd, analyst at Sanford Bernstein, which prepared the simulation's price reactions, told the international terrorism and non-proliferation subcommittee of the House's international relations committee last week.

"With only 2.2m barrels a day of spare capacity, which is enough capacity to meet a little more than one year of demand growth, the oil markets are at the mercy of political stability in Venezuela, Nigeria and Iraq, as well as potential terrorist acts," he said.

"I sat in the situation room for more than 20 years under five different presidents. I think it was very realistic," said Robert Gates, former director of the Central Intelligence Agency, who played the role of national security adviser in the simulation.

During the simulation, engineered by the National Commission on Energy Policy and the advocacy group Securing America's Future Energy, participants took on the roles of members of the US cabinet and were asked to advise the president.

They were given scenarios of oil supply interruptions via television news bulletins and memos. As events unfolded, economists and former oil executives briefed them on the markets' reaction. The role-play was set in December 2005.

Participants included Gene Sperling, national economic adviser under President Bill Clinton, Linda Stuntz, deputy secretary of energy under President George Bush the elder, Richard Haass, until June 2003 the principle foreign policy adviser to Colin Powell, secretary of state, and General PX Kelly, retired commandant of the Marine Corps and member of the joint chiefs of staff.

For the scenario, which included the evacuation of foreign workers from Saudi Arabia and unrest in Nigeria, analysts at Sanford Bernstein calculated that a 4 per cent reduction in world oil supply would increase prices by more than 170 per cent.

As the world saw this week, with the death of King Fahd and the smooth transfer of the kingdom's throne to longtime de facto ruler Crown Prince Abdullah, even the slightest sign of trouble in Saudi Arabia, which holds 25 per cent of the world's oil reserves and almost all of its spare capacity, sends prices higher.

The mock cabinet concluded that the strategic petroleum reserve was of limited usefulness in such a crisis – it chose to tap it only when prices went to $120 a barrel. Using some of the emergency barrels too early could send prices higher, they said, because traders would worry that less emergency oil would be available if a more serious disruption ensued.

But the limited size of the stocks – the equivalent of two months of US imports – meant the reserve was useless for longer-term disruptions, such as an evacuation of all foreign personnel from Saudi Arabia, which was one of the scenarios presented in the role-play.

Despite these shortcomings, the US this month is expected to complete filling the reserve to 700m barrels.

More broadly, the simulation showed that, even with last week's passage of the energy bill, the US has few tools to counter a sudden reduction in supply.

Oil facilities were too large to guard, the mock cabinet found, and diplomatic solutions were marred by unreasonable (in the eyes of the US) demands by countries such as Saudi Arabia, which among other things had demanded that the US stop putting it under pressure over democratisation.

Mr Gates concluded that Americans could probably be persuaded to adjust their behaviours to reduce their oil consumption for about a year if they saw the shortage of oil as an issue of national security.

"The real problem is year two to five. How do you impose that kind of daily pain on Americans for a three- to four-year period before alternatives can be felt?" he said.

Mr Sperling said after the simulation: "What I learned was that when you face an energy crisis, you better have a pound of prevention, because if not, you are left with only an ounce of cure."

Robbie Diamond, president of Securing America's Future Energy, the nonpartisan organisation that created the war game and advocates reducing US dependence on oil, said: "There is nothing like watching, listening and learning as a group of former cabinet members and senior government officials sit in a 'mock' situation room responding in real time to a series of plausible and credible events. This is hopefully something that all champions of this issue can use to build support for serious action."

The question now is whether lawmakers in Washington will take the issue as seriously as their retired counterparts who took part the simulation.

Lex in the FT in a comment on News Corporation says: Chopping some of the Murdoch family roots in Australia was meant to ensure a brighter future. News Corporation's US reincorporation would mean heavier demand for the shares and narrow the spread between voting and non-voting shares. Instead it has left the family with a headache.

John Malone swooped during the move to build a voting stake of 18 per cent. That was a timely reminder of the value of a vote. The spread between voting and non-voting shares narrowed ahead of the US reincorporation. It has since widened steadily largely in anticipation of Rupert Murdoch engineering a deal to buy out Mr Malone.

Meanwhile, the recent decision of Mr Murdoch's son Lachlan to quit his executive roles at News Corp and return to Australia has exposed family friction about the future. The slightest hint that the Murdoch voting block of 29.5 per cent could one day stop speaking with one voice boosts Mr Malone's negotiating position.

That does not mean anything will change now. News Corp will likely extend its poison pill to avoid Mr Malone pushing higher. Anyway, Mr Malone believes in Mr Murdoch's ability to run News Corp successfully. But if Mr Malone cannot be encouraged to part with his stake, he could could one day use it to flex his muscles - especially alongside other shareholders. For Mr Murdoch he represents a problem. For outside investors, he could yet become a guardian of shareholder value when the new Murdoch generation takes control of the family stake.

In a report from the Gulf of Mexico, The New York Times reports says: Standing 60 feet above sea level on this oil platform 130 miles southeast of New Orleans, Rab Bruce pointed to where the huge wave slammed into a tangle of grated steel and multicolor pipes.

"I was just in shock at the damage," said Mr. Bruce, a longtime field coordinator on Chevron's Petronius deepwater platform, which was hit by a 90-foot wave during Hurricane Ivan last September. "I had never seen anything like this. Everything was busted, dangling and messed up."

Today, with oil prices hitting records and petroleum producers stretched to the limit to meet greater demand from not just the United States but from China, India and other developing countries as well, oil producers worry that hurricanes are as much a risk to a global shortfall in supplies as pipelines blowing up in Iraq or oil workers going on strike in Venezuela.

And with the margin of error so tight, even a temporary disruption of the deepwater platforms, rigs and sub-sea pipelines in the Gulf of Mexico -

source: http://www.finfacts.com/irelandbusinessnew..._10002808.shtml

[britmaveric]

Seems using scare tactics to push oil prices up!!!!

[johnnyk]

Shortage will push the prices up.

They just want to get everybody scared enough so nobody will object to them drilling anywhere they want to.

Earth has lots of oil, just not extractable at prices people will be happy to pay.

[stoneman]

Shortage will push the prices up.

They just want to get everybody scared enough so nobody will object to them drilling anywhere they want to.

Earth has lots of oil, just not extractable at prices people will be happy to pay.

<{POST_SNAPBACK}>

Guys...There is a new book out by Matthew Simmons called "Twilight in the Desert".

Simmons is a well versed expert in the oil industry and he has done a very thorough review of the oil reserves in Saudia Arabia and he has come to many of the same conclusions. I think it is more than scare tactics by the oil industry..