Chevron Data Shows Industry Lag in Producing New Oil from U.S. Sources
Lower Production Shows Failure of Investment, Not Lack of Oil, Says Watchdog
SANTA MONICA, Calif., Aug. 1 /PRNewswire-USNewswire/ – Chevron Corp. reaped
another record quarterly profit of** $6 billion dollars, despite producing less**
oil than projected and losing money on its refining of oil into gasoline. The
results illustrate an industry with plenty of resources to produce more oil in
the U.S., but slow to spend the money to develop them, said Consumer Watchdog.
“The most striking thing about Chevron’s report was its executives’ webcast
discussion of its available new oil and its progress, or lack of it, in
producing that oil,” said Judy Dugan, research director of the nonprofit,
nonpartisan Consumer Watchdog. “Its most immediate project is a Nigerian
oilfield expected to ‘turn a handsome profit,’ as one executive acknowledged,
while costlier projects in the Gulf of Mexico merited only vague predictions.”
“These economic choices show the pointlessness of President Bush’s demand that
currently off-limits coastal areas be handed on a platter to oil companies,
while known large discoveries in the Gulf of Mexico go undrilled,” said Dugan.
"The ‘drill now, drill everywhere’ campaign is a hoax on Americans."
Chevron alone has four large areas being developed in the Gulf of Mexico, two
of which – leases named Blind Faith and Tahiti – are projected to produce
oil by the end of 2009. Two others, known as Jack and St. Malo, are years
behind schedule – put off because of cost and the lack of drilling rigs,
according to a recent Bloomberg report. The fields are each likely to produce
at least several hundred millions of barrels of oil.
(See the Bloomberg report here)
“Chevron’s laggard production of U.S.-based oil shows a company intent on
assuring the highest profit from top-quality Nigerian oil, while costlier U.S.
production takes a back seat,” said Dugan. “Later, when Chevron’s new Nigerian
production is hampered by political violence, it’ll be another excuse for
traders to jack up the price of crude oil.”
Chevron, like all the other major oil companies, also continued buying back
its own stock rather than putting the money into producing new oil. The stock
**buybacks in this and the two previous quarters totaled more than $6 billion. **
The company also revealed that its losses in the refining end of its business
were largely due to its own derivative trading in futures markets rather than
actual losses on producing fuel. Under pressure from questioning analysts,
executives sheepishly acknowledged that they were cutting back on such trades.
http://www.reuters.com/article/pressRelease/idUS204642+01-Aug-2008+PRN20080801
The big boys do not want to drill in America. They want to continue making record profits and operate the same way they are now.