Drilling in the Gulf of Mexico, using new technology to drill in ultra-deep water, costs $120 million per well (see picture above).
Many people claim now that oil companies are somehow "underinvesting" or not investing enough in oil exploration and oil production.
Fact: Most oil companies spend about as much in investment as they make in profits. For example, ConocoPhillips makes about $1.5 billion a month in profits and is investing about $1.2 billion a month in oil exploration and oil production. For the U.S. to remain competitive globally for oil and gas, punishing and crippling our own oil companies with windfall profits taxes and fewer tax breaks doesn’t make economic sense.
Read my article in today's Detroit News titled: "Drill a hole in myth on oil investment: Companies actually spend more to find energy than they earn in profits."