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Oil Search Ltd says low oil price will hurt (http://www.compareshares.com.au/~compare1/show_news.php?id=S-546730)

http://www.cleanmpg.com/photos/data/501/oil_drilling_rig_sunset.jpg
CompareShares.com.au - Jan 27, 2009

Higher costs, declining production, lower selling prices - oil companies are hurting. Reduced exploration now will lead to shortages and high prices later. --Ed.

Oil Search Ltd, Papua New Guinea's largest oil producer, says earnings this year will be affected by the lower oil price and has delivered a drop in fourth quarter output for 2008.

The oil and gas producer also said operating costs for the second half of 2008 would be about 10 per cent higher than the first half due to an increased level of well work over.

Oil Search managing director Peter Botten said conditions in the second half of 2008 were some of the most challenging yet experienced by the energy sector.

"Looking forward to 2009, cash flow will undoubtedly be impacted by the current low oil prices and the company is in the process of reviewing budgets for 2009 and opportunities for reducing discretionary spending," Mr Botten said in a statement. http://www.compareshares.com.au/~compare1/show_news.php?id=S-546730

This article takes one oil company and uses it as an example for us to generalize what is happening to all other oil companies. Implied also is that these companies are simply reacting to free enterprise market factors and that these factors are responsible for their actions. They, in effect, say to us that our free enterprise democracy continues to work well. The editor here and most of us have accepted this explanation.

(Higher costs, declining production, lower selling prices - oil companies are hurting. Reduced exploration now will lead to shortages and high prices later. --Ed).

I do not have that feeling. I feel the oil industry has been fixing the cost of oil and gasoline for years. The price of oil and gasoline has now dropped due to our recent discovery of the effects on our economy of the dramatic increase of the cost of oil and gasoline in 2008. It triggered a recession/depression. They have now been forced to drop the cost in the face of the disastrous results of their rapid increase of our cost of living. No more windfall profits = oil companies are hurting.

Not.

I for one feel that our problems have their origin in the entrenchment of unethical and corrupt behavior in business and in our government. We have arrived here because we have failed to develop policy and procedure that will keep those in power honest.
We have totally ignored it and, even worse, we Americans have come to expect it as SOP, opening the door for even more unethical entrenchment.

Next time you have a minute, check out the impeachment trial of our Illinois governor to see the extent of the problem and the horrifying entrenched power we now struggle against.

Next time you have a minute, check out the mechanism called the "Tax Gap" and the consequences of giving good people great power without effective regulations, checks and watchdogs.

The oil industry, as most, have simply taken advantage of the fact that their regulation, checks and watchdogs have effectively "regulated" them so that they can do what they want to do.

Oil companies hurting. Give me a break. What did they do with all those 10-15 billion dollar per quarter windfall profits from last year? They should be using some of that money for exploration. Why are gasoline prices up now? Oil consuption and oil prices are
down which are supposed to both be large determining factors in gasoline prices. I think what I said during the time gas prices were at $4.+ per gallon is becoming reality. I said then that the oil companies would never allow prices to drop to their previous prices even if oil prices dropped to where they were before. Oil is currently trading at $43. a barrel and has been in the mid $30 range from time to time in the past few weeks, yet gas prices are on the rise. Oil prices are at about 29% what they were at their highest point yet we are still paying nearly 42% the cost gasoline was at it's highest point. This is using state average numbers from the current average price per gallon in NC as apposed to the highest average price it ever reached in NC.

I didn't have anything to add I just needed to change someting in my last post.

According to the TV program, 60 Minutes, as a result of changes to the investment laws under George W Bush one of the big guys (Merril Lynch?) bought up 15% of the oil refineries in the States, and managed to convince a whole bunch of their big institutional clients (like pension funds) to invest in Oil Futures, much as they would any other stock.

THAT's what caused oil to go nuts last time. When the bubble burst, these same investors fled the market, hence the price tumbled like a stone.

We cannot allow speculators to get their mitts on something as essential as oil futures, and bid it up for the benefit of the ultra rich and the ultra corrupt. Nor should we be giving a DIME to the companies that crashed because of oil-price manipulation.

Apparently the oil industry lives check to check like most Americans unfortunately. :(

Windfall Profits evaporated. And they don't have the savings to continue exploration. I don't believe it for a second.

Posted from my Windows Mobile Phone.

http://finance.yahoo.com/q/ks?s=XOM

Exxon currently has 38 billion in cash. Subtract the 10 billion debt, to leave 28 billion. For a company that has 464 billion in annual revenue, that's less than a month's revenue. Paycheck to paycheck is a pretty good comparison, I'd say.

We cannot allow speculators to get their mitts on something as essential as oil futures, and bid it up for the benefit of the ultra rich and the ultra corrupt. Nor should we be giving a DIME to the companies that crashed because of oil-price manipulation.

Speculators and "analysts" are now, and always have been determining the price we pay for oil & gasoline. And the criteria they use to buy or sell it has always been money in their pocket. Even worse, for the last few decades our government has had their blinders on to the oil industries price collusion and price fixing. I think oil "went nuts" because our government let it. We have no way to protect ourselves from it.

And oil is not the only industry using our inability to stop them as a springboard to dirty riches. The pharmaceutical company, Ovation just bought the only two drugs existing that treat heart defects in infants. They then raised the cost of those drugs 1300%. Another example of business ethics in America.

And the infants who might need that drug to live? Well, our governor here in Illinois was recorded telling contractors here that if they want to play they will pay him for the privilege. End of topic.

Comes pretty close to what Ovation is telling the parents of infants who would need the drug. Pay our immoral price or take a hike. :mad::flag::mad::flag:

Democracy without morality does not work.

John Quincy Adams.