ExxonMobil Spends $100M Every Day for Capital and Exploration, On Our Behalf as Consumers
We hear a lot from the media and politicians about the "big profits" of "Big Oil" companies like ExxonMobil, which earned $9.45 billion in the first quarter of 2012, and $41 billion last year. But the media never covers the "big investments" companies like ExxonMobil make, which are almost equal to the profits it earns.
Here's a WSJ news report today that highlights ExxonMobil's ongoing efforts to find additional oil and gas around the world, largely on your behalf as a consumer of ExxonMobil's products:
"Exxon Mobil said Friday it agreed to develop so-called tight oil reserves in Western Siberia with Russian state oil and gas company Rosneft, in the Texas company's latest effort to replicate the U.S. shale boom globally and gain access to one of the world's largest untapped oil fields. Exxon and Rosneft would use technology that the U.S. oil company already employs in unconventional oil and gas formations in the U.S. and Canada. The companies expect to approve in the near future geological studies and drilling for selected blocks in the Bazhenov and Achimov reservoirs. The Bazhenov Shale is believed to hold many times more oil than the prolific Bakken Shale in North Dakota and it has the potential to be one of the world's largest sources of shale oil.
Exxon Mobil will finance the geological studies and exploratory drilling, which is expected to begin in 2013. The agreement is the latest chapter in a long-term strategic deal that includes offshore exploration of massive energy reserves in Russia's Arctic Sea and the Black Sea. The venture comes at a time when Exxon has been increasing its foothold on unconventional oil and gas development, not only in North America, but all over the world.
The company--which is exploring for shale oil and gas in Germany and Argentina--recently revealed it will also develop tight oil in Colombia and that it was evaluating the potential of shale oil and gas in China. Exxon has said a key component of its $25 billion acquisition of shale producer XTO Energy in 2010 was transferring the know-how that allowed the company to unlock vast new reserves of natural gas in the U.S. via hydraulic fracturing."
Bottom Line: When we think about "Big Oil" and their big profits, we shouldn't neglect the "Big Investments" those companies have to make to be able earn those profits. In just the few minutes it took you to read this post, just the one "Big Oil" company ExxonMobil Corporation spent about one-quarter of a million dollars on "capital and exploration," basically on your behalf as a consumer, and on the behalf of your children and your grand-children as consumers, to ensure that American consumers will have a constant, dependable supply of affordable energy for many generations in the future.