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And just think, all that oil is now ours, it's all ours!!
Mwaa-ha-ha-ha-ha!
"The war was about installing a democracy in the middle east"
The Repugs and neo-c*nts admit the WMD was the primary reason they could all get behind (as opposed to the real reason, oil), and that's what they sent Powell to the UN with. Democracy? GMAFB
"I don't see the profit incentive"
You think the oilcos don't know how to make profits selling oil? Esp when it's the US govt is picking up the tab for busting the oilcos into Iraq?
"How does increasing supply make them more money"
Who said US/UK oilcos ripping off Iraq oil, when new production comes on line in a few years (if ever), was going to increase total supply? (as other sources of oil are depleted or withheld)
Who said increase in supply was going to reduce prices?
The Saudis have announced they will increase by 500K barrels in July. We'll see if it makes any difference in the $130 price. If it doesn't, that's another $65M/day into Saudi pockets, $23B/year
If the US oilcos ripping off Iraq oil decreases the price, I'm sure other countries, like Saudi Arabia, will be happy to reduce their oil to support the price, keeping their oil in the ground for future generations while selling enough now to support their obscene lifestyle, now that $130 price has been shown not to force down demand. Why would the world oil exporters EVERY allow the oil to go back down?
Even if the 5M barrels/day that the US oilcos can pull out of their permitted leases in the Gulf of MX, but can't get to, do you think the world price of oil would go down?
And just think, all that oil is now ours, it's all ours!!
Mwaa-ha-ha-ha-ha!
yeah! I gotta fund my retirement, it ain't easy bein' right alla time. But it shur is proffittable.
I can totally picture Cheney saying that in a Mr. Penguin voice.
People who live(d) there will tell you for all the downfalls of Sadamism Iraq, its 8 million times worse under dubullyas dictatorship.
yeah, no incentive for the oil companies.
again, you have yet to prove the profit incentive. How is increasing supply going to make the Oilcos more profits than they have today?
I asked my boss why we don't cancel our capacity expansion projects and gave him your foolproof economic a en as a reason. He rolled his eyes.
Big ing surprise.
Terrorism my ass. "Iraq Democracy" is the definition of an oxymoron.
The only thing holding the country together is because the US troops patrol the streets, etc.
The moment that stops, civil war breaks out and these 4 oil companies are going to regret being in the region...or should I say, their employees will regret being there.
Spin it anyway you want, the US went into Iraq for fear of (and I quote) "weapons of mass destruction". Violation of cease-fires/treaties were just underlying motives. When no WMDs found, it was spun into "installing democracy".
We have yet to see that flimsy notion shot down as well. Soon.
So why do you need to go overseas to extract oil?
US gvt. is pushing for the OPEC to produce more oil but don't want to open up its own reserve although it's the country that eats most of the WW production.
If you ask the US oilcos whether they'd rather extract known, high-quality, shallow Iraq oil vs explore and extract from offshore leases, what do you think the answer will be?
I say Iraq.
Considering the barrel's price currently, any mining plants is welcomed.
Above 100$/barrel there's no ressources that are not profitable.
Total has even started exploiting "oil sands" (some of the least efficient minings) for that matter.
( http://en.wikipedia.org/wiki/Athabasca_Oil_Sands )
Please, choose your stance.
If the goal was to setup a democracy in Iraq, open market is a byproduct of this and Total or whoever can try and make business with the new gvt.
If the goal was to secure ressources for American companies only, that's colonialism.
Last edited by bobbybob0; 06-23-2008 at 01:47 PM.
I'm asking questions. Please feel free to answer them or ask your boss to post.
btw, I rather sell one house for $1million then sell 10 houses for 100k. If increasing the supply is what would make these companies the most money, and then why doesn't OPEC open up the kets? You may want to ask your boss about that one too.
Also, is allowing IRAQ the freedom to award foreign companies all of the oil contracts part of the overall conspiracy?
http://news.yahoo.com/s/afp/20080622...l_080622131740
Would you rather sell 1 house for $1 million, or 10 houses for $200k? Just becuse your supply increases ten-fold does not mean price decreases ten-fold.
Quan ies and prices do not move by the same amount, is the answer to your question.
"award foreign companies all of the oil contracts"
they're getting the crumbs after the big US/UK oilcos get to the big fields.
I agree, but the supply demand ratio seems to be spot on for the oilcos at this point. How would a dramatic increase in supply affect the bottom-line? I'm thinking commoditizing oil would be a very bad business decision.
If Iraq comes to market they will supply as much as possible to earn every dollar they can. The Saudis and others will have to increase supply just to keep up. We would see a snowball effect IMO.
The point is, I'm open to the argument that we invaded iraq for Oil, but all I ask is for people to prove it with financial facts. If you supply the facts I'll support you, not you specifically Scott.
...and from an Iraqi national perspective, S , Exxon and Chevron are "foreign" oil companies too.
Well, there are a lot of variables that could determine what impact increased Iraqi oil would have on the market, quality being one of them.
Remember, the price of oil you see quoted is for West Texas Intermediate (WTI) crude oil. There are a number of international benchmarks, this is the one we use in the US. Other crudes trade based on a discount or premium to WTI. For example, Mexican Maya crude has been trading for about $20 recently. That is $20 less than whatever WTI is. So now the Mexicans are getting $115/bbl as opposed to the $10-20 they were getting just a few years ago.
Most Iraqi crude is on the lighter end of the spectrum (even what they call "Basrah Heavy" is more like a medium grade in terms of gravity), but it is also more sour (heavier in sulfur content). Since crude oil have significant and distinct quality characteristics, it is different than most commodities. It is entirely possible (though not probable) that increase Iraqi crude production would have ZERO impact on WTI price, but would instead result in a widening of sour crude differentials (the discount sour crudes trade at).
Another important thing to consider about "BigOil" expanding their production, is that "BigOil" only controls about 10% of the global production of crude oil. So, incremental volume is important for them - and since all oil falls in price, but they only care about their own, then it increases profits. A 50% increase in volume for a single company is not a 50% increase in global supply (which is what the price is based on).
I haven't done the work to tell you one way or another if the increased supply would mean a BIGGER decrease in price (which would mean supply is elastic and total revenues would drop as a result - all else equal), but even if supply were elastic, it could still be profitable. Consider the following example:
Assume company "Scottoco" has leases in the Gulf of Mexico and can pump 1 MMBPD barrels of oil, which it can sell for $100/bbl on the open market with a cost to the company of $25/bbl (and a profit of $75/bbl). So right now my profit is $75MM/day (MM = million)
Let's say that Scottoco gets Iraqi contracts for another 1 MMBPD, which accounts for about 1.1% of global oil supply. For illustration, lets say this results in a 5% decrease in the price of crude oil. In this Iraqi oil field, it still costs me $25/bbl to extract.
So now I am selling my crude for $95/bbl, but I have 2 MMBPD at $70/bbl margin. That means my profit is now $140MM/day.
In this (extremely simplified) example, price would have to fall all the way below $62.50/bbl to have a NEGATIVE impact on profits for this company. So, a 1.1% increase in oil supply would have to result in a 38.5% decrease in price. Not going to happen.
Remember, we need to consider the microeconomic approach to identify the incentive for individual companies, not the macroeconomic approach. If we assume that all oil sells for $100 before and $95 after, then yes, total revenues (and all else equal, profits) fall - but they INCREASE for the companies that increased their volume.
I'll leave the "reasons for invading Iraq" discussions to others.
Last edited by scott; 06-24-2008 at 09:20 PM.
So tell me ...
Was oil also why Chiraq was sucking Saddam off? Not to mention Putin, Schroder, and every other government owner of a pseudo "privatized" oil company named in the OFF scandal?
You know....the countries that had all the Post Sanction Iraq Oil deals, and who, incidentally, opposed the war, and wanted the sanctions lifted...
Companies like...oh, Total for instance.
Was it about Oil then ? Or just after 2003?
What about Vladimir Zhirinovsky, Alexander Voloshin, Benon Sevan...Charles Pasqua?
Kofi Annan(and son)!
Was it about Oil for them too ? Or just Bush?
Why did Saddam invade Iran and Kuwait (and give serious consideration to Saudi Arabia)...
Was that about oil too ? Or did it just begin with Bush?
You don't think it's about Oil for Usama... ?
Are you really that ing stupid?
I guess you are.
If you are outraged by oil...then be outraged by oil...not just when it suits you, .
.
Lying ...
Deceitful .
Stupid .
Last edited by whottt; 06-23-2008 at 10:02 PM.
Total, TotalFinaElf, Elf Aquitaine...
Boutons doesn't give a what that company does...
It's done everything he accuses the American companies of attempting to do...to a far mroe genocidal and disastrous degree...
boutons doesn't care...because he only hates America.
His views are worhless...he is pure bias and double standard.
Boutons posts are for entertainment purposes. After awhile, you just read them and all you can do is laugh.
I'd rather sell 10 houses for $150K each than one house for $1 million. I'll also pay some market forecasters a tidy sum to predict accurately whether I'll be able to sell those 10 houses for $100K or $150K so I know what my strategy should be.
There is a basic economic concept called profit maximization. I'm not going to insult your intelligence by going along with this ruse of yours where you pretend not to understand that concept.
I saw in the paper this morning ES where the refiners are in for more hard times. Most don't know that most of the refiners are not owned by the OILCO's and that the price of oil is hurting them as well as the consumer.
I hope you all get your new stuff on line ASAP.
Valero is one of the prime owners of refineries in the U.S. Of course they kinda ripped their drawers with me many moons ago when they were Coastal States and he reneged on so many of their Gas contracts. And San Antonio cut a deal to stop litigation if they would move to San Antonio. Cant remember all the details, way back in the 70's.
Essentially, only time will tell for a schmo like me. I do tend to believe any significant increase in supply from IRAQ would spark the other suppliers to increase their inventories too. That would in turn make Supply Elastic. Small increase like the 200,000 barrells from the Saudies will have little impact, but I believe the IRAQi's have the resources to supply much more than just 200,000..
What you are saying about "others" increasing supply is very true. Cheating in OPEC is normally the norm.
I understand Nigeria is the cause of the last e. They took about 2 hundred thousand off the world market. So Saudi's are just replacing Nigeria's.
You dont need to tell whottttttt that. I do believe they have met IRL. Im not certain.
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