Really Big Oil - The Orange Mane

W*GS · 08-10-2006, 10:53 PM

National oil companies

Really Big Oil
Aug 10th 2006
From The Economist print edition

Sluggish behemoths control virtually all the world's oil; they should be privatised

When activists, journalists and others speak of “Big Oil”, you know exactly what they mean: companies such as Exxon Mobil, Chevron, BP and Royal Dutch Shell. These titans have been making lots of money for their shareholders; their bosses enjoy vast pay packets; and their actions affect us all. BP's decision to shut down Prudhoe Bay, America's biggest oilfield, to repair leaking pipes is a case in point, outraging many and pushing petrol prices even higher.

Yet Big Oil is pretty small next to the industry's true giants: the national oil companies (NOCs) owned or controlled by the governments of oil-rich countries, which manage over 90% of the world's oil, depending on how you count. Of the 20 biggest oil firms, in terms of reserves of oil and gas, 16 are NOCs. Saudi Aramco, the biggest, has more than ten times the reserves that Exxon does. Those with misgivings about oil—that its price is too high, that reserves are running out, that it damages the environment, that it is more a curse than an asset for countries that produce it—must look to NOCs for reassurance.

These companies are certainly sitting on a reassuring amount of oil. Saudi Aramco's proved reserves alone could keep the world supplied for several decades. But it is only exploiting ten of its 80 or so fields, so will be able to pump at the present rate for about 70 years even if it never discovers another drop of oil. In fact, Aramco and other NOCs are likely to find plenty more if they look, since their territory has not been very thoroughly explored. Only 2,000 wildcat wells have ever been dug in the countries around the Gulf, according to Leonardo Maugeri, an Italian oilman, compared with more than 1m wells in the United States.

But if the amount of oil at state oil companies' disposal is not much of a worry, the way they manage it certainly is. Few of the princes, politicians and strongmen who wield ultimate authority over these firms can resist the urge to meddle. At best, that leads to the sort of inefficiencies found at most state-owned firms: overstaffing, underinvestment and so on. At worst, the business of pumping and selling oil is entirely subsumed by politics, as in the case of Petróleos de Venezuela, one of the biggest NOCs. In either case, NOCs produce less oil, more expensively, than they should.

The people's oil, not the bureaucrats'

That is bad for consumers, of course, in so far as it pushes up the price of oil. But it is also bad for oil-producing countries, which could be squeezing more profit from each barrel if their NOCs were more efficient. Moreover, there are several NOCs not bound by OPEC quotas, such as Mexico's Pemex and Russia's Rosneft, which would love to boost production to take advantage of the current high price, but are struggling to do so.

The easiest way to improve state oil firms' performance would be to privatise them. The authorities, no longer torn between nurturing their NOCs and milking them for all they are worth, could concentrate on maximising their oil revenue through taxes and royalties. Failing that, governments could instil a little market discipline by subjecting their NOCs to competition, either by encouraging them to expand abroad or by allowing foreign firms some access to their home territory. At least, they should grant NOCs operational autonomy, and allow them to retain and invest some portion of their earnings. The less bureaucrats interfere, after all, the more money their oil companies will generate for them to spend.

Copyright © 2006 The Economist Newspaper and The Economist Group. All rights reserved.

L.A. BRONCOS FAN · 08-11-2006, 10:44 PM

L.A. BRONCOS FAN · 08-11-2006, 10:45 PM

W*GS · 08-13-2006, 05:18 PM

Obviously anything critical in the slightest of Hugo Chavez immediately earns a deflection from LABF...

And he says he's a Democrat. Pshaw - he's a far-left dictator-loving radical...

Spider · 08-13-2006, 05:31 PM

Quote:

Originally Posted by W*GS

Obviously anything critical in the slightest of Hugo Chavez immediately earns a deflection from LABF...

And he says he's a Democrat. Pshaw - he's a far-left dictator-loving radical...

citgo ....... that reminds me ,, I have to gather up all of my fuel recpiets and start sorting them .......

L.A. BRONCOS FAN · 08-13-2006, 10:39 PM

Quote:

Originally Posted by The O'W*GS Factor

Obviously anything critical in the slightest of Bush or the GOP immediately earns a deflection from me.

Fixed it for you.

BTW, I have you on ignore, so I have no clue what you might have posted on Chavez.

W*GS · 08-14-2006, 06:29 AM

Quote:

Originally Posted by L.A. BRONCOS FAN

BTW, I have you on ignore, so I have no clue what you might have posted on Chavez.

Too bad. The facts about how he has screwed up Venezuela provide proof against your oft-posted pro-Chavez propaganda.

But you won't see this post anyway. I've always viewed 'ignore' as a pathetic excuse to avoid challenges to one's ideology.

Bronco_Beerslug · 08-14-2006, 07:05 AM

Quote:

Originally Posted by W*GS

Too bad. The facts about how he has screwed up Venezuela provide proof against your oft-posted pro-Chavez propaganda.

I'm not sure how he's screwed up that country, the majority of people of Venezuela approve of what he's doing.

Quote:

Originally Posted by W*GS

But you won't see this post anyway. I've always viewed 'ignore' as a pathetic excuse to avoid challenges to one's ideology.

Generally, but between you two it's a good idea.
BTW, here's the latest pics of the world leaders in question...

-----------------------------------------

In an image from theWebsite for Granma, Cuba's Communist Party Newspaper, Fidel Castro,right, meeting with Venezuela's President Hugo Chavez Sunday Aug. 13, 2006. The Associated Press cannot verify the authenticity or the date when these photographs were shot. (AP Photo/HO/GRANMA/Estudios Revolucion)

W*GS · 08-14-2006, 08:34 AM

Quote:

Originally Posted by Bronco_Beerslug

I'm not sure how he's screwed up that country, the majority of people of Venezuela approve of what he's doing.

"While the opposition continues to squabble, the opinion polls suggest that Venezuelans are hungry for change. Despite Mr Chávez's personal popularity, his government is seen by almost three-quarters of respondents as incompetent and corrupt."

http://www.economist.com/world/la/di..._id=E1_STJQVVP

Bronco_Beerslug · 08-14-2006, 09:22 AM

Quote:

Originally Posted by W*GS

"While the opposition continues to squabble, the opinion polls suggest that Venezuelans are hungry for change. Despite Mr Chávez's personal popularity, his government is seen by almost three-quarters of respondents as incompetent and corrupt."

http://www.economist.com/world/la/di..._id=E1_STJQVVP

I can't read your article.

--------------------------------------------
Chávez Leads, Rivals Below 10% in Venezuela
July 31, 2006

Quote:

Many Venezuelan adults would give Hugo Chávez a new term as president, according to a poll by Datanálisis. 59 per cent of respondents would vote for the incumbent in this year’s ballot.

Zulia governor Manuel Rosales is a distant second with nine per cent, followed by Julio Andrés Borges of Justice First (PJ) with eight per cent, and former planning minister Teodoro Petkoff with two per cent.

CONT
--------------------------------------------------
Venezuela set for poll campaign
By Greg Morsbach
BBC News, Caracas
Last Updated: Tuesday, 1 August 2006, 03:57 GMT 04:57 UK

Campaigning officially begins on Tuesday in Venezuela, ahead of a presidential election due to take place in December.

Incumbent President Hugo Chavez - who is on a two-week world tour - is set to run for a third term in office.

Opinion polls put support for Mr Chavez at between 50% and 60%, with most of his rivals hovering at around 5%.

This will be the first time in Venezuela's history that a president is seeking a third consecutive term.

President Chavez is so confident of victory in December's elections that he decided to spend two weeks on a world tour.

Venezuela's opposition is deeply divided and has so far failed to impress with a lack of new proposals.

CONT

Mile High Shack · 08-14-2006, 09:24 AM

so your good with communist dictators eh BB?

Bronco_Beerslug · 08-14-2006, 09:26 AM

Quote:

Originally Posted by Mile High Shack

so your good with communist dictators eh BB?

Who's communist?

Mile High Shack · 08-14-2006, 09:34 AM

Quote:

Originally Posted by Bronco_Beerslug

Who's communist?

Chavez feels that Castro is a good role model for him and that he is like a father to him

and you don't think Chavez is communist?

lol

ok

Bronco_Beerslug · 08-14-2006, 09:37 AM

Quote:

Originally Posted by Mile High Shack

Chavez feels that Castro is a good role model for him and that he is like a father to him
and you don't think Chavez is communist?
lol
ok

Chavez is a democratically elected world leader, twice now and probably 3 times. You don't agree with democratic elections? Or is it you would rather see more attempts at nation building?

Rohirrim · 08-14-2006, 09:49 AM

Quote:

Originally Posted by Bronco_Beerslug

Chavez is a democratically elected world leader, twice now and probably 3 times. You don't agree with democratic elections? Or is it you would rather see more attempts at nation building?

Keep posting crap like that and the terrorists will hit us again.

And it will be YOUR FAULT, you commie bastage.

W*GS · 08-14-2006, 09:52 AM

Quote:

Originally Posted by Bronco_Beerslug

I can't read your article.

The point is that Chavez is personally popular - but his government is dysfunctional.

With Chavez at the helm, Venezuela will continue down the path toward a Nigeria-like future - a petrostate that's corrupt and doesn't serve the people.

BroncoBuff · 08-14-2006, 09:56 AM

Quote:

Originally Posted by Bronco_Beerslug

Chavez is a democratically elected world leader, twice now and probably 3 times. You don't agree with democratic elections? Or is it you would rather see more attempts at nation building?

If we read ...... posts like this ..... we run the risk of getting hit again.

Bronco_Beerslug · 08-14-2006, 10:44 AM

Quote:

Originally Posted by W*GS

The point is that Chavez is personally popular - but his government is dysfunctional.

With Chavez at the helm, Venezuela will continue down the path toward a Nigeria-like future - a petrostate that's corrupt and doesn't serve the people.

It may or may not be dysfunctional but it's what the Venezuela people want, apparently.

Mile High Shack · 08-14-2006, 10:46 AM

Quote:

Originally Posted by Rohirrim

Keep posting crap like that and the terrorists will hit us again.

And it will be YOUR FAULT, you commie bastage.

I don't understand why it's wrong to criticize Chavez since he is communist, regardless if he is elected or not

who cares if he was "elected" or not, the point is, he is a communist who plans to pull his country in that direction.

I don't understand all the love from you hippies on the left for him

Bronco_Beerslug · 08-14-2006, 10:53 AM

Quote:

Originally Posted by Mile High Shack

I don't understand why it's wrong to criticize Chavez since he is communist, regardless if he is elected or not
who cares if he was "elected" or not, the point is, he is a communist who plans to pull his country in that direction.
I don't understand all the love from you hippies on the left for him

Who loves him? I guess that's one big difference between neocons and others. A lot of people understand nation building, invading countries and the whole war agenda in general is counter productive and obscenely expensive.

Neocons, on the other hand, believe if you're not calling for the head of someone who calls you a bully, you're a terrorist.

shakenbake · 08-14-2006, 10:55 AM

Did you know that Oil Compaines averge a profit of 10 cents per gallon of gas.

W*GS · 08-14-2006, 11:33 AM

Quote:

Originally Posted by Bronco_Beerslug

It may or may not be dysfunctional but it's what the Venezuela people want, apparently.

Not "may not be dysfunctional" - almost 3/4ths of Venezuelans think their government is incompetent and corrupt. And I doubt they want it that way, but that's what they're stuck with, since it's unlikely Chavez will relinquish the power he's gathered for himself.

Venezuela is a democracy in name only - it's rather quickly become an autocratic regime with Chavez pulling all the levers.

Bronco_Beerslug · 08-14-2006, 12:40 PM

Quote:

Originally Posted by W*GS

Not "may not be dysfunctional" - almost 3/4ths of Venezuelans think their government is incompetent and corrupt. And I doubt they want it that way, but that's what they're stuck with, since it's unlikely Chavez will relinquish the power he's gathered for himself.

Venezuela is a democracy in name only - it's rather quickly become an autocratic regime with Chavez pulling all the levers.

BS! If they don't want him they would vote him out. Their elections were deemed as credible as ours.

W*GS · 08-14-2006, 01:54 PM

Quote:

Originally Posted by Bronco_Beerslug

BS! If they don't want him they would vote him out. Their elections were deemed as credible as ours.

Question is, what happens with the next election? Chavez has so concentrated power in his hands that I have grave doubts that the Venezuelan people will get rid of him via the ballot box...

alkemical · 08-14-2006, 02:08 PM

Quote:

Originally Posted by W*GS

The point is that Chavez is personally popular - but his government is dysfunctional.

With Chavez at the helm, Venezuela will continue down the path toward a Nigeria-like future - a petrostate that's corrupt and doesn't serve the people.

Mirror mirror on the wall.......

08-10-2006, 10:53 PM	#1
W*GS Ring of Famer Join Date: Jan 2004 Location: Earth Posts: 19,515	Really Big Oil National oil companies Really Big Oil Aug 10th 2006 From The Economist print edition Sluggish behemoths control virtually all the world's oil; they should be privatised When activists, journalists and others speak of “Big Oil”, you know exactly what they mean: companies such as Exxon Mobil, Chevron, BP and Royal Dutch Shell. These titans have been making lots of money for their shareholders; their bosses enjoy vast pay packets; and their actions affect us all. BP's decision to shut down Prudhoe Bay, America's biggest oilfield, to repair leaking pipes is a case in point, outraging many and pushing petrol prices even higher. Yet Big Oil is pretty small next to the industry's true giants: the national oil companies (NOCs) owned or controlled by the governments of oil-rich countries, which manage over 90% of the world's oil, depending on how you count. Of the 20 biggest oil firms, in terms of reserves of oil and gas, 16 are NOCs. Saudi Aramco, the biggest, has more than ten times the reserves that Exxon does. Those with misgivings about oil—that its price is too high, that reserves are running out, that it damages the environment, that it is more a curse than an asset for countries that produce it—must look to NOCs for reassurance. These companies are certainly sitting on a reassuring amount of oil. Saudi Aramco's proved reserves alone could keep the world supplied for several decades. But it is only exploiting ten of its 80 or so fields, so will be able to pump at the present rate for about 70 years even if it never discovers another drop of oil. In fact, Aramco and other NOCs are likely to find plenty more if they look, since their territory has not been very thoroughly explored. Only 2,000 wildcat wells have ever been dug in the countries around the Gulf, according to Leonardo Maugeri, an Italian oilman, compared with more than 1m wells in the United States. But if the amount of oil at state oil companies' disposal is not much of a worry, the way they manage it certainly is. Few of the princes, politicians and strongmen who wield ultimate authority over these firms can resist the urge to meddle. At best, that leads to the sort of inefficiencies found at most state-owned firms: overstaffing, underinvestment and so on. At worst, the business of pumping and selling oil is entirely subsumed by politics, as in the case of Petróleos de Venezuela, one of the biggest NOCs. In either case, NOCs produce less oil, more expensively, than they should. The people's oil, not the bureaucrats' That is bad for consumers, of course, in so far as it pushes up the price of oil. But it is also bad for oil-producing countries, which could be squeezing more profit from each barrel if their NOCs were more efficient. Moreover, there are several NOCs not bound by OPEC quotas, such as Mexico's Pemex and Russia's Rosneft, which would love to boost production to take advantage of the current high price, but are struggling to do so. The easiest way to improve state oil firms' performance would be to privatise them. The authorities, no longer torn between nurturing their NOCs and milking them for all they are worth, could concentrate on maximising their oil revenue through taxes and royalties. Failing that, governments could instil a little market discipline by subjecting their NOCs to competition, either by encouraging them to expand abroad or by allowing foreign firms some access to their home territory. At least, they should grant NOCs operational autonomy, and allow them to retain and invest some portion of their earnings. The less bureaucrats interfere, after all, the more money their oil companies will generate for them to spend. Copyright © 2006 The Economist Newspaper and The Economist Group. All rights reserved.

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08-11-2006, 10:44 PM	#2
L.A. BRONCOS FAN Mo' holla fo' yo' dolla! Join Date: Dec 2002 Location: In a bunker in an undisclosed location Posts: 52,694

08-11-2006, 10:45 PM	#3
L.A. BRONCOS FAN Mo' holla fo' yo' dolla! Join Date: Dec 2002 Location: In a bunker in an undisclosed location Posts: 52,694

08-13-2006, 05:18 PM	#4
W*GS Ring of Famer Join Date: Jan 2004 Location: Earth Posts: 19,515	Obviously anything critical in the slightest of Hugo Chavez immediately earns a deflection from LABF... And he says he's a Democrat. Pshaw - he's a far-left dictator-loving radical...

08-14-2006, 09:24 AM	#11
Mile High Shack Ring of Famer Cock-a-doodle-do Join Date: May 2001 Location: Somewhere Posts: 17,010	so your good with communist dictators eh BB?

08-14-2006, 10:55 AM	#21
shakenbake Texas Homer Join Date: Jun 2003 Location: Shanghai, China Posts: 3,136	Did you know that Oil Compaines averge a profit of 10 cents per gallon of gas.