Interesting article here:
http://www.businessweek.com/bwdaily...p+news_top+news+index_businessweek+exclusives
"...Halfway through the three-hour meeting, Exxon management flashed a chart that showed the company's worldwide oil production staying flat through 2012.
Ponder that for a minute. Texas-based Exxon is the largest publicly traded company in the energy business. In fact, it's the most profitable company in the history of capitalism, earning a record $40.6 billion on sales of $404 billion last year. Yet even with prices at the pump near all-time highs, Exxon isn't planning on producing any more oil four years from now than it did last year. That means the company's oil output won't even keep pace with its own projections of worldwide oil demand growth of 1.2% a year.
Imagine a chief executive of another growth company making a similar announcement to Wall Street as Exxon Chairman Rex Tillerson. What if Steve Jobs said Apple (AAPL) wasn't going to sell any more iPhones than it did in 2007? What if Howard Schultz said Starbucks' (SBUX) latte production would stagnate, at least until the next U.S. president embarked on his or her reelection campaign? Shares of both companies would plummet.
After the management presentations, Tillerson took questions from the audience. The first hand that shot up was that of Deutsche Bank (DB) oil analyst Paul Sankey, who wanted to know why the company wasn't showing any volume growth. "We don't start with a volume target and then work backwards," Tillerson explained. Instead, he said, his team examines the available investment opportunities, figures out what prices they'll likely get for that output down the road, and places their bets accordingly. "It really goes back to what is an acceptable investment return for us," Tillerson said. In other words, producing incremental barrels just to ease prices for consumers is not part of the company's calculations."
from another source:
"Given the potential for devastating reversals, Exxon doesn’t see itself on a mission to ensure energy security in North America or elsewhere. The shareholders come first, last and always.
"It really goes back to what is an acceptable investment return for us," Tillerson told the analysts.
Last year, Exxon spent more money buying back its stock – $36 billion – than on reinvesting in the business. Since replacing his similarly unsentimental predecessor, Lee Raymond, in January of last year, Tillerson, 55, has raised capital spending just 18 per cent against a 75 per cent jump in expenditures on share buybacks.
That gambit increases earnings per share, but obviously doesn't add a drop of oil or gas to the firm's reserves in order to sustain the business. Yet Shell and Chevron Corp. also are furiously buying back their stock, at a rate that will see Exxon and Chevron retire all of their stock by about 2024. It comes down to this: buying back the company's stock is a far more certain bet on increasing investor returns than operating a new deep-water drilling program."
I just heard yesterday that the US is still buying barrels of oil at the current rates and stashing them in the Strategic Oil Reserve! What the hell?? That's millions of more barrels that could be out there to help ease the situation and couldn't that money be going towards something a bit more beneficial for our economy?
All I know is that my freelance work cost me about $200 in gas last week. Work has stopped for a while so I'm torn between being scared as hell about not working for a few weeks and being relieved for not having to drive anywhere. Anybody out there get a wage increase to cover the rising costs of freakin' everything?? Neither did I. They can make as much profit as they can but if it doesn't balance out on our end of things then they're going to cripple us.