HOUSTON, July 22, 2008
Big Oil Profits Go To Investors, Not R&D
More Than Half The Money Made By The Five Largest Oil Companies Goes To Stock Buybacks And Dividends
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In this May 14, 2008 file photo, Jim Mulva, CEO of ConocoPhillips, uses a chart to explain the high cost of gasoline during a press conference in Houston. (AP PHOTO)
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The companies insist they're trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends.
It's good news for shareholders, including mutual funds and retirement plans for millions of Americans, but no help to drivers already making drastic cutbacks to offset the high cost of fuel.
The five biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, up from 30 percent in 2000 and just 1 percent in 1993, according to Rice University's James A. Baker III Institute for Public Policy.
The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits.
The issue has become more sensitive as lawmakers and Americans frustrated by high gas prices have balked at gaudy reports of oil industry profits. ConocoPhillips is scheduled to kick off the latest round of Big Oil earnings reports Wednesday.
Oil prices are set on the open market, not by the oil industry. But that hasn't stopped public protests, a series of congressional grillings for top oil executives, and a failed attempt by lawmakers to slap Big Oil with a windfall profits tax.
In the first three months of this year, Exxon Mobil Corp., the world's biggest publicly traded oil company, shelled out $8.8 billion on stock buybacks alone, compared with $5.5 billion on exploration and other capital projects.
ConocoPhillips has already told investors that its stock buybacks for April to June of this year will come to about $2.5 billion - nine times what it spent on exploration.
Stock buybacks are common throughout corporate America, not just for Big Oil. They shrink the amount of stock on the open market, essentially increasing its value and giving individual shareholders a bigger stake in the company.
But some critics say Big Oil focuses too much on boosting stock prices, in an industry that sometimes ties executive pay to stock price.
And in focusing on buybacks and dividends over exploring for new oil, some critics say, oil companies jeopardize its already dwindling share of world supply.
"If you're not spending your money finding and developing new oil, then there's no new oil," said Amy Myers Jaffe, an energy expert at Rice University who's studied spending patterns of the major oil companies.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
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See all 124 CommentsAll the while the oil company execs **** and moan about how much it costs them to research/explore and extract oil. When all the while, the majority of the money (duh) was going into their pockets and those of the investors.
So when an oil company executive opens his (or her) mouth... just remember the line of BS from the tobacco executives when they said before a Congressional hearing back in the 80s: "...tobacco is not addictive..."
Repeal the $10 Billion tax gift to oil companies NOW!
All of the excuses of the past for their failure to do so are now exposed as flawed and possibly criminal.
Voter''s will not re-elect or elect anyone who fails to act now. Something to think about for career politicians, I would think, of either party.
How scr*wed up is America.
THIS constitutes news.
Know wonder Republicans keep repeating drill here drill now
Doublethink is the act of simultaneously accepting two mutually contradictory beliefs. It is an integral concept of George Orwell''s dystopian novel Nineteen Eighty-Four.
Origin
According to the novel, doublethink is:
%u201C The power of holding two contradictory beliefs in one''s mind simultaneously, and accepting both of them . . . . To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies %u2014 all this is indispensably necessary. Even in using the word doublethink it is necessary to exercise doublethink. For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely,
with the lie always one leap ahead of the truth.
Why is it that the price at the pump jumps right along with the price of a barrel but when the price of a barrel goes down the price at the pump stays the same?
The oil companies need to do something about this before the people start thinking their greedy.
Ooooops, too late.
Never mind.
...advanced by those who own our government and from the government who answers to their elite owners. (hint: not the American populace at large).
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It takes approx. 3-4 weeks for the price at the pump to change with the price of crude oil.Not for sure why but heard it on the "wall street journal radio show."
Of course they''re not using their hundreds of billions in profits to look for more oil....why in the hell would they want to do that and drive the price down. LOL
Geeez.....when are you people ever going to grow some brains.
This is not news.
Posted by whiskyrocker at 02:44 AM : Jul 22, 2008
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I believe, from what I''ve heard/read in the past, that the lag time between the price of oil and the price at the pump is due to the time it takes to transport and refine that oil at it''s current price.
(I think I stated that clearly).
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Makes sense. Thanks for the info.
But Sen. Charles Schumer, D-N.Y., said the fervor for stock buybacks is a clear sign Big Oil isn''t interested in new production or alternative energy.
"When you hear that," he said, "it screams out for a windfall profits tax."
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And the Dems turn to Communism.
The Dems know alternative energy can''t compete with oil.
The Dems are bleeding votes. What type of damage control will they do?
Amazing that the greedy pirates and their concubines at CBS Newz would be dumb enough to place an ad for the greedy petro-pirates at Exxon-Mobil with this article.
Clearly they have no shame.
The assets of grredy global criminal networks like Exxon and Chevron should be seized and liquidated to help to compensate their many victims, and their executives should stand trial for war profiteering and other heinous crimes, right along with the regime.
President Chavez had the right idea with his decision to nationalize oil production.
Down with oil pirates!
Down with Exxon-Mobil!
Could it be that some of that oil company money goes into purchasing the Republican Party?
Could it be that Bush and McCain are a couple of little puppets who dance to Big Oil''s tune?
Say it ain''t so, Repubs?
(I think I stated that clearly).
Posted by DaysRnumbrd
Not really. The lag time of falling pump prices is to see if crude prices jump back up. Remember, if the the price is down at the pump and the price of crude goes up it does not take but a few hours to increase the price at the pump. The excuses for big oil profit are many in numbers! Take your pick of which you are to believe.
People claim if Big Oil is taxed there will be no r&d. Apparently if Big Oil isn''t taxed there will still be no r&d. So what''s the downside of a windfall profits tax again?
Take the first profits to pay off the new system, and when it''s paid off, start using the money to go back into the system. It may not be cheaper, but the US may actually solve our poor infrastructure problems and even give a leg up towards universal health care.
Exxonmobile add supported story lmao
Mission Accomplished.
the only problem with the dividends you are receiving from Big Oil is that they are paid by me..part of the 1.7 billion tax credit we issue to them.
Posted by sleepyric at 07:32 AM : Jul 22, 2008
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Oh they certainly do!
Their idea of "investing in R&D" goes something like this:
- Buy patents for battery and fuel cell technology...
...then shelve them in the dark room somewhere, never to be (legally) used among the population.
Watch "Who Killed The Electric Car" to find out how Big Oil invests in R&D!
Posted by greeneyes222 at 06:33 AM : Jul 22, 2008
...............
Aye! Yes! That line rings in my ear every time a story like this comes about!
(It is the official slogan of the Bush and Cheney family however).
With the deregulation of the oil contracts, now noone can trace who is buying the contracts and causing this rise in oil prices.
In Ebay that is considered Shill Bidding (which is illegal) but in the real world (of deregulation) it''s considered Business as Usual...
You can only thank those in congress in 2000 for the deregulation (enron loophole) they put together and passed...
Back it up and maybe people will believe you. I''ve been watching this pretty closely and so far nothing has come to my attention supporting your claims.
The oil co''s have been using government (taxpayer) land. They''ve been given tax breaks for research and development. They have been given 68 million acres in oil leases yet they do not drill. Now it''s looking like we went to war for them and 4100+ have paid with their lives for this stuff.
If you can''t see they''ve been taking us, you must be part of the problem.
Funny thing is that all this greed still leads to the great equalizer, death.
Take heart that is were life leads you no matter what you try you can''t cheat death.
That is one that you can''t take away from anyone.
How Americans can support Repubs is amazing; but then again there are still those that long for the day of Hitler. Ignorance, intolerance, and greed fuel both. The end of the cold war should have brought huge infusions of money to the social ills of America, but the Repubs have no interest in that sector; so they created a new bogeyman to feed their war machine.
The destruction of retirement plans, the .com bust, manipulating the energy market, the housing bust are all Repub conspiracies to impoverish the middle class Americans. These financial schemes were definitely immoral, if not illegal, but no CEO actually paid the price, just the middle class. The actual corporate and political crooks are bailed out once again to create another Ponzi scheme.
Most American corporate executives are incompetent. They only succeed if allowed to illegally manipulate the market and cut corners on safety. We used to lead the world, but the Repubs changed the game and now Americans and the world are paying the price in busted economies, devastated environments, and no hope for the future.
Thats could be done with a few small marks of a pen.
Then overnight we would see $1.00 a gallon gas or less.
Posted by beehive21 at 08:40 AM : Jul 22, 2008
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Yes, like the good little serfs we all have become.
The new "American dream" of the middle class for the 21st century...
...the ability to afford a decent pair of shoes!
What has our government done with that extra cash?
Our government wants you to believe big oil companies are the bad guys so that our government can distract you so they can pick your pocket.
Our government should be using some of that extra/bonus profit driven tax revenue to fund alternate energy studies.
Instead, we got the short sighted ethanol rush which benefits farm corporations at the expense of dinner on our tables.
Our government is the cause of high gas and food prices.
They call themselves "americans" but these global capitalists are the same sociopaths that built empire in the old world. They use corporate charters, global trade agreements, manipulation and control of the monetary and economic system to build empire. The wealth they build in unconscionable. This is what evil truly is.
Posted by GOP_forever
You are entitled to he*ll and crooks like you will get just that.
Your idea of morality is perverted and you will find out how terribly wrong you are when your mortal life draws to conclusion.
our government has gotten us into a war (costing billions of dollars a month) designed to perpetuate the profits of the oil companies.
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Oil companies are "oil companies" not "alternative energy companies". They have no business managing anything other than oil exploration and profits on oil production.
Our government is not investing in alternative energy any of that extra $100B they are raking in today on those oil company profits.
Anyone that really believes our government will tax the oil companies to lower prices at the pump is a product of our public education.
Governments current windfall taxes are not being spent to help Americans. Why should we believe that additional taxes will be spent on such?
Is the American public really that foolish?
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