Thread: Oil firms reap huge profits after storms

http://www.washtimes.com/business/20051 ... -2582r.htm

Oil firms reap huge profits after storms

By Jeffrey Sparshott
THE WASHINGTON TIMES
October 28, 2005

Exxon Mobil Corp.'s profits surged 75 percent to a record $9.92 billion in the third quarter, fueled by high crude oil and natural gas prices, the world's largest publicly traded oil company reported yesterday.
Revenue for the Irving, Texas, oil giant neared $101 billion in the quarter -- the first time a U.S. company has broken the $100 billion mark in a three-month period.
Marathon Oil Corp., the fourth-biggest U.S. oil company, and Royal Dutch Shell, Europe's second-biggest oil company, also reported record profits for the third quarter.
Houston-based Marathon's net income rose to $770 million from $222 million a year earlier. The Hague-based Shell said net income rose 68 percent to $9 billion.
"It's all on price," James Halloran, who helps manage $33 billion, including Exxon Mobil and Shell shares, at National City Private Client Group in Cleveland, told Bloomberg News. "They're going crazy on price."
Prices for natural gas, oil and gasoline, already near record highs because of rising demand, were driven higher by Hurricanes Katrina and Rita, which damaged and shut down oil platforms and refineries around the Gulf of Mexico, crimping supply.
A gallon of unleaded gasoline in the District peaked at an average of $3.38 on Sept. 7 -- the highest in the nation at one point -- though it is now about $2.71, according to AAA Mid-Atlantic.
The world's five biggest publicly traded oil companies are heading for combined 2005 profit of almost $107 billion, according to analyst estimates, partly because of the widening gap between crude costs and refined fuel prices.
Members of Congress and the Bush administration are admonishing the oil industry for record profits on the back of historically high prices paid by consumers for gasoline, natural gas and home heating oil.
Senate Majority Leader Bill Frist said yesterday he has instructed two committees to hold hearings on high prices and instructed an investigative subcommittee to examine whether companies have engaged in price gouging.
"Ultimately, if the facts warrant it, I will support a federal anti-price gouging law," the Tennessee Republican said.
His call comes two days after House Republican leaders questioned high profits for oil companies, with House Speaker J. Dennis Hastert saying the companies must help consumers by laying out a plan for bringing down energy costs in the long run.
Energy Secretary Samuel W. Bodman at a Senate Energy and Natural Resources Committee hearing yesterday echoed Mr. Hastert's comments.
"These companies are turning in record profits, that they have a responsibility to increase refining capacity, that the American public expects that and should see that," Mr. Bodman said.
Lee Raymond, Exxon's chairman, said his company had acted responsibly in the wake of Hurricanes Katrina and Rita, first ensuring the safety of workers and then raising gasoline production at refineries.
"Our earnings in the third quarter reflect the impact of the relatively volatile industry environment on commodity prices and industry margins," he said.
Exxon Mobil's $101 billion in revenue is bigger than the annual gross domestic product for countries such as Mideast oil producers Kuwait, Qatar and the United Arab Emirates.
It is not clear if oil companies will quickly add to refinery capacity. They have been hesitant to build new facilities because local communities often do not want them, because of regulatory restrictions and because there has been little economic incentive to increase supplies to consumers.
"If Washington is serious, they should make it more appealing for these companies to invest at home," said Fadel Gheit, senior energy analyst at investment firm Oppenheimer & Co. "But you have environmentalists, people who don't want [a refinery] in their back yard. And politicians cater to the lowest common denominator of their constituency."
Mr. Gheit excoriated politicians for their accusations of excess profits at Exxon Mobil and its competitors.
"They didn't steal the money, they earned it. They lost tens of millions of dollars from the hurricanes' impact, they treated their employees well and they have been model corporate citizens," he said.
That is not the common view in Washington.
Republicans are chiding the oil giants, and Democrats have called for a tax on windfall profits to help pay for Hurricane Katrina reconstruction, home heating costs this winter and other projects.
"Big Oil behemoths are making out like bandits, while the average American family is getting killed by high gas prices, and soon-to-be record heating oil prices," said Sen. Charles E. Schumer, New York Democrat.
Mr. Bodman rejected such plans.
"We have proven, I thought, to our general satisfaction back in the '70s and '80s that didn't work, when we last had a windfall profits tax," he said.
• Stephen Dinan contributed to this report.
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The stupid party in Congress in their not so infinite wisdom just handed out another 12 billion of our tax dollars to these same big oil companies to quote on quote encourage them to build more refineries. All of this I'm sure at the blessing of Jorge W Bush. Big oil companies should be the last corporate entity that should be receiving our tax dollars after the big profits they are reaping. Haliburton must be laughing all the way to the bank. They must love this administration. The Republican parties campagin coffers must have been getting a bit low. This is a sick joke. How many people honestly think that these big oil companies are going to build another refinery without the government cracking down on them. Why would they? They haven't built one in 30 years and all they have to do is jack up the gas prices and force the stupid gutless sheep in this country to just simply pay the price. This is just another example of the stupid party and Jorge Bush pandering to big elite corporate interest. It just shows that they have been bought off and don't have America's best interest at heart.

I can't wait until 2006. It's so high time to throw these worthless bums out of office.

I guess that explaines this>

http://www.alipac.us/ftopict-11681.html

But...But Jorge Bush told them not to gouge us!

Originally Posted by BobC

But...But Jorge Bush told them not to gouge us!

No, I think he said you cant gouge them enough.