More 100 billion in profits for oil majors

The figure makes you dizzy: it is the amount of destruction caused by cyclone Katrina in the south of the United States. It is also the cost of a year of war in Iraq for the American economy.

Over 100 billion dollars! This is the cumulative amount of profits that the five largest oil companies in the world are preparing to make this year thanks, in large part, to the explosion in oil prices. The figure makes you dizzy: it is the amount of destruction caused by cyclone Katrina in the south of the United States. It is also the cost of a year of war in Iraq for the American economy.

Never before has an industrial sector generated so many benefits. Even if, in 2004, the five majors (ExxonMobil, Chevron, Total, BP and Shell) had already broken all records with more than $ 1 billion in turnover and 150 billion in profits.

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These performances are now being wiped out after the unprecedented surge in oil prices since the start of the year. Despite several increases in OPEC production, the price of Brent jumped 49% in London in six months and the price of a barrel exceeded 70 dollars in the United States in the aftermath of the cyclone in Louisiana. As a result, the majors posted performances in the first half alone, up 30% on average.
Without this exceptional economic environment, the tankers' balance sheets would have been less flattering. Total recalled yesterday that the increase of $ 4,23 billion in operating profit from one semester to the next, is explained, to the tune of nearly $ 3 billion, by the increase in hydrocarbon prices.

In fact, the miraculous figures of the petroleum industry have hitherto concealed its weaknesses: the saturation of production tools and the exhaustion of reserves. From there to say that the multi-billion dollar oil companies are colossi with feet of clay, there is only one step that some do not hesitate to take.

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For the International Energy Agency (IEA), 20% of investment is currently lacking to meet global demand for the next XNUMX years. So rather than paying large dividends to their shareholders or launching ambitious share buyback programs, experts say, majors would be wiser to invest in prospecting and new production capacity. In other words, if world demand continues to break records, notably due to China's colossal needs, companies will have more and more room for maneuver.

Source: Christine Lagoutte (AFP)

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