Cynthia A. Janak
The "crude" truth
By Cynthia A. Janak
I am going to say this before I begin. You are not going to be happy when you read this article. I have spent many hours reading articles and researching this topic. What I have found is that there are many players and profit is the motive. This is not limited to the United States because I have found international connections in high places. The sad thing is that the United States is very much involved.
I am going to inform you of the truth behind the oil (crude) that we use to run our cars, heat our homes and other necessities of our life.
Today the big news in the world is that the price of oil (crude) is up to $71.00+ a barrel. The reported reasoning behind this is the concerns over Iran and the rise of the insurgency in Nigeria. This sounded reasonable to me but I wanted to know what OPEC was thinking about this so I went to their site. http://www.opec.com/ , April 18, 2006 edition.
Several headlines caught my attention. One was OPEC believes oil prices are too high: delegate. When I read this my interest was peaked. If OPEC thinks the prices are too high then who is in control? I had to know the answer to this question. Our mainstream media is telling us that OPEC is controlling the prices but OPEC is telling us it is not. The article is on Reuters. Here are some excerpts.
DUBAI (Reuters) — OPEC believes oil prices are too steep, after setting a fresh record high above $70 a barrel, and the rise is not justified by market fundamentals, a senior OPEC delegate said on Tuesday.
"Geopolitics are riding the price," the OPEC delegate said, stressing that there was no shortage of crude in the market.
Qatari Oil Minister Abdullah al-Attiyah said on Monday the cartel was already producing at maximum levels and was expected to maintain its current output for the rest of the year if demand levels hold and with the current level of prices.
Attiyah said he was confident there would not be any supply disruptions from Iran, which pumps around 5 percent of the world's oil.
http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-04-18T091354Z_01_L18203482_RTRIDST_0_BUSINESSPRO-ENERGY-OPEC-DELEGATE-DC.XML
What interested me here is that Iran only pumps 5% of the oil and OPEC says that the world would not be affected by any supply disruptions because they are producing at their maximum levels. OPEC also is planning to maintain this output for all of 2006.
In regards to Nigeria the prolonged shut-in of more than 500,000 barrels per day in OPEC-producer Nigeria had resulted in "some distortion" in some refineries but was not a global issue.
It was my understanding that this was a global issue but I come to find out it is not right from OPEC. So, if it is not a global issue then what is it?
This is where my research has led me.
I found a statement referencing the third quarter earnings reports of big oil from John Sweeney, President of the AFL-CIO, dated October 27th, 2005. I am going to quote one paragraph.
This week, all the major oil companies announced record profits. BP PLC (nee British Petroleum) reported earnings up 34 percent, from $4.9 billion to just over $6.5 billion. ConocoPhillips reported $3.8 billion, up 89 percent. Chevron's profits rose to $3.2 billion. Royal Dutch Shell PLC profits took a 68 percent jump, from $5.4 billion to $9 billion. Exxon Mobil's net was up 75 percent to $9.92 billion, the largest quarterly profit in history for a U. S. company to run defensive newspaper ads proclaiming their booty was "driven by the price of commodities we sell."
http://www.aflcio.org/mediacenter/prsptm/pr10272005a.cfm
Wow, what a statement this is. I never knew how much money was involved here. Because of this statement, I had to look deeper into the individual oil companies. I had to prove, beyond a shadow of a doubt, that his statements were true for my own benefit. This is what I found.
Our government agency, the Energy Information Agency had this to say about the fourth quarter for 2005, energy companies.
The level of net income for Q405 was 43 percent higher than in the fourth quarter of 2004 (Q404). Net income for Q405 increased primarily as a result of higher crude oil and natural gas prices, higher refining margins, and higher foreign refinery throughput.
All lines of business reported increases in net income for Q405 relative to Q404 with the exception of foreign refining/marketing. Overall, the petroleum line of business (which includes both oil and natural gas production and petroleum refining/marketing) registered a 40-percent increase in net income between Q404 and Q405. A 49-percent increase in oil and gas production net income was augmented by a 20-percent increase in refining/marketing net income. (Note: corporate net income and the total net income of the lines of business differ because (1) some items in corporate net income are nontraceable, such as interest expense, and are not allocated to lines of business, and (2) the number of companies reporting line-of-business net income varies.) For all of 2005 all of the lines of business generated higher earnings relative to 2004. In particular, worldwide petroleum operations were 37 percent higher ($85.6 billion to $117.6 billion) relative to a year earlier with worldwide upstream increasing 39 percent ($24.1 billion to $31.8 billion.)
http://www.eia.doe.gov/emeu/perfpro/news_m/index.html
I found this under the Worldwide Petroleum section of the same document.
Earnings from domestic upstream operations for all of 2005 also were higher than in 2004 increasing 31 percent from $27.3 billion to $35.7 billion. The overwhelming reason cited by the companies in their press releases were higher realized prices for crude oil and natural gas, which were somewhat offset by higher operating costs and lower production level, chiefly due to Hurricanes Katrina and Rita.
Net income from foreign upstream operations increased 48 percent relative to Q404, as all six companies that reported separate net income from foreign upstream operations reported an increase in Q405 relative to Q404. Foreign earnings primarily grew on the strength of higher crude oil prices and an increase in foreign crude oil production.
Under Earnings from worldwide refining and marketing operations... I found this to be of value.
U.S. gross refining margins (the per-barrel composite wholesale product price less the composite refiner acquisition cost of crude oil) increased despite somewhat by higher petroleum product stock levels. Further, Hurricanes Katrina and Rita reduced domestic refinery throughput relative to Q404 by those U. S. majors reporting domestic refinery throughput which offset the effects of higher U. S. gross refining margins. The net effect was a 40-percent increase in U.S. refining/marketing earnings from $4.7 billion in Q404 to $6.6 billion in Q405.
To sum it all up this is what the report had to say under chemical operations.
Higher margins offset hurricane effects and result in increased earnings from the majors' chemical operations.
What these paragraphs are referring to is that the hurricanes and other concerns did not truly affect the profits of the major oil companies. In fact, this says to me that the major oil companies were expecting a larger profit in 2005 because of the hurricanes. My opinion is that the oil companies were opportunists and used the hurricanes as a reason to raise prices to the consumer.
What I see here is price gouging in its finest form. These companies are setting our prices because they are telling us that all the hurricanes and other concerns are hurting them. I expect this news is part of their marketing policies to placate the American consumers and foreign consumers of oil. The negative effects of the hurricanes in the gulf were not truly felt because of the higher profit margins (higher prices at the pump).
Now, I am not a financial analyst but I do participate in the stock market. What all this tells me is that the oil companies are not satisfied with a modest profit from the sale of their products.
For the historical prices of gasoline for your state, go to this site. http://zfacts.com/p/48.html
It will show you what the prices were a year ago, last week and today. It is interesting to see how the major oil companies vary the prices per state. If you live in a state that has more money or a larger population, your price at the pump will be higher.
I was talking to a friend of mine who is a financial planner to get more information about the oil companies. They told me something that I found to be very interesting. They said that most oil companies will 'hedge' on the possibility of some major catastrophe (hurricanes, etc.) so if it does happen they will not be hurt financially. This information, I was told, can be found on the company's financial statement. They also said that you have to read the whole statement because it will be a small paragraph inserted some place in that document. I guess I have more research to do after I finish writing this article.
What I understand the word hedge to mean is that they sort of bet that the event will happen. It is like betting on a horse to lose instead of win. I hope I explained that properly for you.
This definition of hedge is taken from the Encarta Dictionary:
2. protective method — finance, a means of protection against something, especially a means of guarding against financial loss
• a hedge against inflation
5. try to offset possible losses — finance, intransitive verb, to take measures to offset any possible loss on a financial transaction, especially by investing in counterbalancing securities as a guard against price fluctuation
What I am going to do now is send you to a site that will totally astound you. This will help you to understand why we do not have the refineries and other services by the major oil companies.
http://www.eia.doe.gov/emeu/finance/fdi/tab01_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab02_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab03_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab04_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab05_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab06_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab07_FDI_2003.html
In the links that I have provided you will notice in the charts the fact that the companies that are featured there are all foreign in nature. What you see here is that the US companies are only a subsidiary of a foreign company. The list goes on when you look at the charts.
Here are examples:
Now I can see why we have high gasoline prices. Many of the companies are run by a foreign entity and they do not care what happens in America. They probably, in my opinion, would like to see the American Patriot be burdened by high energy prices so they can line their pockets with cash.
http://www.fhwa.dot.gov/ohim/mmfr/apr05.pdf
In this document, it shows the volume, prices and the tax rates. The interesting pages on this report are page 13 and page 15. Page 15 gives a state-by-state breakdown of the prices of gasoline per state. (I would have reproduced that here but it is too extensive.
Here is a reproduction of page 13. This page reflects what is going on overseas. They are being gouged too. This is not just happening in America. The only difference is that the governments of those countries are probably balancing their budgets with the amount of tax that is being imposed.
I want you to notice the tax amount that the United States is imposing on a gallon of crude. I was shocked when I saw that our country was not taxing the fuel as much as I was led to believe by the mainstream media.
What I want to do now is give you some more excerpts from various news reports about the profits of big oil.
Bloomberg.com October 27th, 2005 Exxon Profit Rises to $9.92 Bln, Oil Industry Record.
Shares of Exxon Mobil rose 45 cents to $56.65 at 9:10 a.m., before the start of regular trading on the New York Stock Exchange. The stock, which has 17 buy and seven hold ratings from analysts, is up 9.6 percent this year.
Profit from oil and natural-gas sales, which account for three-quarters of the company's net income, surged 87 percent to a record $7.35 billion as unprecedented oil and gas prices more than made up for a 4.7 percent decline in daily output from Exxon Mobil's wells.
http://www.bloomberg.com/apps/news?pid=71000001&refer=us&sid=aBfEe2X7TS_s
post-gazette.com October 28th, 2005 Backlash spreads as oil companies' profits surge
As high fuel prices roil consumers and Congress considers a variety of measures to ease the impact, Exxon Mobil Corp. and Royal Dutch Shell PLC, the world's No. 1 and No. 3 oil companies, weighed in with record third-quarter earnings that totaled almost $19 billion.
The companies combined quarterly revenue of $177.16 billion exceeded Denmark's economic output last year.
In a written statement that accompanied Exxon's earnings release Thursday, Lee Raymond, its chairman and chief executive, didn't mention the result was a record. Instead, he pointed out that the figure included "the impacts from hurricanes Katrina and Rita, two of the most significant U.S. natural disasters in recent history," stressed that his company "acted responsibly" in pricing gasoline at company-operated filling stations in the wake of the storms, and cautioned that "reduced volumes and higher costs" will "impact" Exxon's earnings in the fourth quarter.
http://www.post-gazette.com/pg/05301/596812.stm
CBCnews/Business January 26th, 2006 Early market indicators show strength as energy profits pile up.
In the news:
latimes.com March 15th, 2006 Oil Industry Defends Its Record Profits.
In their testimony Tuesday, the executives insisted their industry remains highly competitive. And as they did in November, they defended their profits, saying the companies have plowed a large chunk of the money into profits to increase energy supplies.
Some senators pressed the executives on the issue of profits.
"We're representing the people...who are very upset with the price of gasoline," said Sen. Herb Kohl (D-Wis.) "It's hard to explain to them how you all, at a time of record high prices that you're paying for your raw material [crude oil], are able to generate record profits."
http://www.latimes.com/news/nationworld/nation/la-na-oil15mar15,1,5753682.story (in archives-not available)
Guardian January 31, 2006 ExxonMobil makes world's biggest profit with $36bn in a year
But Fadel Gheit, oil analyst with Oppenheimer & Co in New York, said the figures were spectacular in a year when the firm had spent $5bn in each of the last two quarters. "And we have not seen anything yet. I believe these monstrous numbers are just the appetizer with the main course this coming year. Profits will be significantly higher in 2006 unless oil and gas prices collapse, which I do not expect."
http://www.guardian.co.uk/print/0,,5387677-110373,00.html
SBC Yahoo Finance bizjournals.com April 17th, 2006 Renzi seeks investigation into gas price hikes.
Renzi, a Republican who represents most of rural Arizona, wants Congress and the federal government to look at high prices, record oil-company profits and "swelling executive salaries."
Renzi and others are upset that Raymond is getting a mammoth $400 million retirement package.
Exxon Mobil turned a record $36 billion annual profit last year.
"Rising oil prices threaten to hobble America's economy," said Renzi, in a statement. "And if terrorist concerns and other world events were not troubling enough, now we see the outgoing chairman of Exxon fleecing our great nation. Enough is enough. This obscene retirement package makes a mockery of Americans who are forced to pay exorbitant gas prices just to get to work."
http://biz.yahoo.com/bizj/060417/1274221.html?.v=1
What bothers me the most is what I read about the hurricanes. The mainstream media was telling us how the oil companies were hurting because the oilrigs in the gulf were out of service. We were told that the oil companies were losing money because the rigs were down. With what I have read in the articles, it is my opinion that this was all a marketing fabrication for the benefit of the American public.
The proof is in the percentage of profit that all the major oil companies reported and the salaries that they are giving themselves. Let us look at the reported profit percentages. We have BP up 34%, ConocoPhillips up 89%, Royal Dutch/Shell up 68% and ExxonMobil up 75%. Even our government reported that the profit of the oil companies is up 43% and they attribute the increase to higher crude oil and natural gas prices.
Last night I did something that I do not normally do. I watched the news on television. I wanted to see if the mainstream media would report on the prices at the pump. CBS, channel 5 for the Chicago area did report on the prices. They told me that the prices will probably go up to $4.00 a gallon by the end of the summer. They also interviewed several people who need gas to run their businesses (cab drivers, delivery and service truck drivers). These people did not know how they are going to survive if the price goes that high. Most are concerned that they will not be able to continue doing business.
To watch that hurt me. These people are working hard to put food on the table and a roof over the head of their family. You and I can relate because it is happening to people that we know. These people live down our streets and in our neighborhoods. What upsets me even further is that we are only getting lip service from our 'old guard Congress' who represents the people. My question for them is: Where the heck are you with protecting the country's interests? Actions speak louder than words and your actions are telling us that you are only interested in your personal agenda.
From everything that I have read to this point, OPEC is not a major part of this equation. Big oil is driving the market price. Therefore, OPEC, you are partially off the hook on this. I said partially because now OPEC needs to do something to curtail what big oil is doing to the population of the world. They need to drop the prices of a barrel to show the world that they do not condone what big oil is doing. They need to go to the governments of the world and ask them to do something about the price gouging that is occurring at the well.
I will not say that the Arabs are responsible, as the mainstream media would like us to think. It is my opinion that what is being used here is the 9/11 sentiment against the Middle East and it is being used against us. Why I believe this to be true is going to be in my follow-up article, The "Crude" Truth Reasons and The "Crude" Truth People. I had to do this because I have over 300 pages of documents and financials and I seem to add more everyday.
(Side note: The Guardian Business, April 3rd, 2006, Mark Milner reported that "Venezuelan president Hugo Chavez is poised to launch a bid to transform the global politics of oil by seeking a deal with consumer countries which would lock in a price of $50 a barrel."
"We have the largest oil reserves in the world, we have oil for 200 years." Mr. Chavez told the BBC's Newsnight programme in an interview to be broadcast tonight. "$50 a barrel — that's a fair price, not a high price.")
We need to make companies come back to reality and accountability to the people. The big business mergers have to stop to increase competition in the market place. We need to stop the "One World" mentality where the elite are rulers and the people are just servants.
What can you do to stop the madness? You can stop buying gas from Exxon/Mobil gas stations around the world. The power is in the consumer and not the company. A company can only have record profits if we allow them to. I believe that if we do this Exxon/Mobil will have to lower their prices at the pump and we will have competition between the oil companies.
You can also contact your legislator and inform them that you are tired of the lip service and start working for the people who elected them.
The power is in the people and not the government. The government wants supremacy because if the people are supported by the state then they are easily manipulated.
TO FIND YOUR SENATORS AND CONGRESSMEN
Find your Senators=> www.Senate.gov/general/contact_information/senators_cfm.cfm
Find your Congressmen=> www.House.gov/writerep
Find your Congressmen & Senators=> www.MoralLaw.org/delegation.htm
Find your Newspapers=> www.TownHall.com/action/write_media.html/
Find Local Talk-Radio=> www.Radio-Locator.com
© Cynthia A. Janak
I am going to say this before I begin. You are not going to be happy when you read this article. I have spent many hours reading articles and researching this topic. What I have found is that there are many players and profit is the motive. This is not limited to the United States because I have found international connections in high places. The sad thing is that the United States is very much involved.
I am going to inform you of the truth behind the oil (crude) that we use to run our cars, heat our homes and other necessities of our life.
Today the big news in the world is that the price of oil (crude) is up to $71.00+ a barrel. The reported reasoning behind this is the concerns over Iran and the rise of the insurgency in Nigeria. This sounded reasonable to me but I wanted to know what OPEC was thinking about this so I went to their site. http://www.opec.com/ , April 18, 2006 edition.
Several headlines caught my attention. One was OPEC believes oil prices are too high: delegate. When I read this my interest was peaked. If OPEC thinks the prices are too high then who is in control? I had to know the answer to this question. Our mainstream media is telling us that OPEC is controlling the prices but OPEC is telling us it is not. The article is on Reuters. Here are some excerpts.
DUBAI (Reuters) — OPEC believes oil prices are too steep, after setting a fresh record high above $70 a barrel, and the rise is not justified by market fundamentals, a senior OPEC delegate said on Tuesday.
"Geopolitics are riding the price," the OPEC delegate said, stressing that there was no shortage of crude in the market.
Qatari Oil Minister Abdullah al-Attiyah said on Monday the cartel was already producing at maximum levels and was expected to maintain its current output for the rest of the year if demand levels hold and with the current level of prices.
Attiyah said he was confident there would not be any supply disruptions from Iran, which pumps around 5 percent of the world's oil.
http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-04-18T091354Z_01_L18203482_RTRIDST_0_BUSINESSPRO-ENERGY-OPEC-DELEGATE-DC.XML
What interested me here is that Iran only pumps 5% of the oil and OPEC says that the world would not be affected by any supply disruptions because they are producing at their maximum levels. OPEC also is planning to maintain this output for all of 2006.
In regards to Nigeria the prolonged shut-in of more than 500,000 barrels per day in OPEC-producer Nigeria had resulted in "some distortion" in some refineries but was not a global issue.
It was my understanding that this was a global issue but I come to find out it is not right from OPEC. So, if it is not a global issue then what is it?
This is where my research has led me.
I found a statement referencing the third quarter earnings reports of big oil from John Sweeney, President of the AFL-CIO, dated October 27th, 2005. I am going to quote one paragraph.
This week, all the major oil companies announced record profits. BP PLC (nee British Petroleum) reported earnings up 34 percent, from $4.9 billion to just over $6.5 billion. ConocoPhillips reported $3.8 billion, up 89 percent. Chevron's profits rose to $3.2 billion. Royal Dutch Shell PLC profits took a 68 percent jump, from $5.4 billion to $9 billion. Exxon Mobil's net was up 75 percent to $9.92 billion, the largest quarterly profit in history for a U. S. company to run defensive newspaper ads proclaiming their booty was "driven by the price of commodities we sell."
http://www.aflcio.org/mediacenter/prsptm/pr10272005a.cfm
Wow, what a statement this is. I never knew how much money was involved here. Because of this statement, I had to look deeper into the individual oil companies. I had to prove, beyond a shadow of a doubt, that his statements were true for my own benefit. This is what I found.
Our government agency, the Energy Information Agency had this to say about the fourth quarter for 2005, energy companies.
The level of net income for Q405 was 43 percent higher than in the fourth quarter of 2004 (Q404). Net income for Q405 increased primarily as a result of higher crude oil and natural gas prices, higher refining margins, and higher foreign refinery throughput.
All lines of business reported increases in net income for Q405 relative to Q404 with the exception of foreign refining/marketing. Overall, the petroleum line of business (which includes both oil and natural gas production and petroleum refining/marketing) registered a 40-percent increase in net income between Q404 and Q405. A 49-percent increase in oil and gas production net income was augmented by a 20-percent increase in refining/marketing net income. (Note: corporate net income and the total net income of the lines of business differ because (1) some items in corporate net income are nontraceable, such as interest expense, and are not allocated to lines of business, and (2) the number of companies reporting line-of-business net income varies.) For all of 2005 all of the lines of business generated higher earnings relative to 2004. In particular, worldwide petroleum operations were 37 percent higher ($85.6 billion to $117.6 billion) relative to a year earlier with worldwide upstream increasing 39 percent ($24.1 billion to $31.8 billion.)
http://www.eia.doe.gov/emeu/perfpro/news_m/index.html
I found this under the Worldwide Petroleum section of the same document.
Earnings from domestic upstream operations for all of 2005 also were higher than in 2004 increasing 31 percent from $27.3 billion to $35.7 billion. The overwhelming reason cited by the companies in their press releases were higher realized prices for crude oil and natural gas, which were somewhat offset by higher operating costs and lower production level, chiefly due to Hurricanes Katrina and Rita.
Net income from foreign upstream operations increased 48 percent relative to Q404, as all six companies that reported separate net income from foreign upstream operations reported an increase in Q405 relative to Q404. Foreign earnings primarily grew on the strength of higher crude oil prices and an increase in foreign crude oil production.
Under Earnings from worldwide refining and marketing operations... I found this to be of value.
U.S. gross refining margins (the per-barrel composite wholesale product price less the composite refiner acquisition cost of crude oil) increased despite somewhat by higher petroleum product stock levels. Further, Hurricanes Katrina and Rita reduced domestic refinery throughput relative to Q404 by those U. S. majors reporting domestic refinery throughput which offset the effects of higher U. S. gross refining margins. The net effect was a 40-percent increase in U.S. refining/marketing earnings from $4.7 billion in Q404 to $6.6 billion in Q405.
To sum it all up this is what the report had to say under chemical operations.
Higher margins offset hurricane effects and result in increased earnings from the majors' chemical operations.
What these paragraphs are referring to is that the hurricanes and other concerns did not truly affect the profits of the major oil companies. In fact, this says to me that the major oil companies were expecting a larger profit in 2005 because of the hurricanes. My opinion is that the oil companies were opportunists and used the hurricanes as a reason to raise prices to the consumer.
What I see here is price gouging in its finest form. These companies are setting our prices because they are telling us that all the hurricanes and other concerns are hurting them. I expect this news is part of their marketing policies to placate the American consumers and foreign consumers of oil. The negative effects of the hurricanes in the gulf were not truly felt because of the higher profit margins (higher prices at the pump).
Now, I am not a financial analyst but I do participate in the stock market. What all this tells me is that the oil companies are not satisfied with a modest profit from the sale of their products.
For the historical prices of gasoline for your state, go to this site. http://zfacts.com/p/48.html
It will show you what the prices were a year ago, last week and today. It is interesting to see how the major oil companies vary the prices per state. If you live in a state that has more money or a larger population, your price at the pump will be higher.
I was talking to a friend of mine who is a financial planner to get more information about the oil companies. They told me something that I found to be very interesting. They said that most oil companies will 'hedge' on the possibility of some major catastrophe (hurricanes, etc.) so if it does happen they will not be hurt financially. This information, I was told, can be found on the company's financial statement. They also said that you have to read the whole statement because it will be a small paragraph inserted some place in that document. I guess I have more research to do after I finish writing this article.
What I understand the word hedge to mean is that they sort of bet that the event will happen. It is like betting on a horse to lose instead of win. I hope I explained that properly for you.
This definition of hedge is taken from the Encarta Dictionary:
2. protective method — finance, a means of protection against something, especially a means of guarding against financial loss
• a hedge against inflation
5. try to offset possible losses — finance, intransitive verb, to take measures to offset any possible loss on a financial transaction, especially by investing in counterbalancing securities as a guard against price fluctuation
What I am going to do now is send you to a site that will totally astound you. This will help you to understand why we do not have the refineries and other services by the major oil companies.
http://www.eia.doe.gov/emeu/finance/fdi/tab01_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab02_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab03_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab04_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab05_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab06_FDI_2003.html
http://www.eia.doe.gov/emeu/finance/fdi/tab07_FDI_2003.html
In the links that I have provided you will notice in the charts the fact that the companies that are featured there are all foreign in nature. What you see here is that the US companies are only a subsidiary of a foreign company. The list goes on when you look at the charts.
Here are examples:
| Foreign | US |
| BP = UK | BP America |
| Royal Dutch/Shell = UK | Shell Oil |
| Royal Dutch/Shell = UK | Meridian Resource |
| Nexen = Canada | Nexen Petroleum USA |
| BHP Billiton = Australia | BHP Billiton Pertroleum (Americas) |
| EnCana = Canada | EnCana Oil & Gas (USA) |
| RWE = German | Consol Energy |
| Talisman Energy = Canada | Fortuna Energy |
| Petrobras = Brazil | Petrobras America |
| Nuon = Netherlands | North Coast Energy |
Now I can see why we have high gasoline prices. Many of the companies are run by a foreign entity and they do not care what happens in America. They probably, in my opinion, would like to see the American Patriot be burdened by high energy prices so they can line their pockets with cash.
http://www.fhwa.dot.gov/ohim/mmfr/apr05.pdf
In this document, it shows the volume, prices and the tax rates. The interesting pages on this report are page 13 and page 15. Page 15 gives a state-by-state breakdown of the prices of gasoline per state. (I would have reproduced that here but it is too extensive.
Here is a reproduction of page 13. This page reflects what is going on overseas. They are being gouged too. This is not just happening in America. The only difference is that the governments of those countries are probably balancing their budgets with the amount of tax that is being imposed.
I want you to notice the tax amount that the United States is imposing on a gallon of crude. I was shocked when I saw that our country was not taxing the fuel as much as I was led to believe by the mainstream media.
| MOTOR FUEL TAX RATES FOR SELECTED COUNTRIES 1/ | ||
| April 2005 Reporting Period | ||
| Created On: 01/13/2006 | ||
| (CENTS PER GALLON) | ||
| COUNTRY | GASOLINE | DIESEL |
| Belgium | 394 | 259 |
| France | 382 | 287 |
| Germany | 402 | 302 |
| Italy | 379 | 295 |
| Japan | 222 | 135 |
| Netherlands | 432 | 269 |
| United Kingdom | 434 | 438 |
| United States 2/ | 38 | 45 |
| 1/ Source for foreign rates is data collected by the U.S. Department of Energy from various sources. Rates were converted to U. S. currency using current exchange rates. | ||
| 2/ Includes the weighted average of State taxes as shown on table MF-121T plus the Federal Tax. | ||
What I want to do now is give you some more excerpts from various news reports about the profits of big oil.
Bloomberg.com October 27th, 2005 Exxon Profit Rises to $9.92 Bln, Oil Industry Record.
Shares of Exxon Mobil rose 45 cents to $56.65 at 9:10 a.m., before the start of regular trading on the New York Stock Exchange. The stock, which has 17 buy and seven hold ratings from analysts, is up 9.6 percent this year.
Profit from oil and natural-gas sales, which account for three-quarters of the company's net income, surged 87 percent to a record $7.35 billion as unprecedented oil and gas prices more than made up for a 4.7 percent decline in daily output from Exxon Mobil's wells.
http://www.bloomberg.com/apps/news?pid=71000001&refer=us&sid=aBfEe2X7TS_s
post-gazette.com October 28th, 2005 Backlash spreads as oil companies' profits surge
As high fuel prices roil consumers and Congress considers a variety of measures to ease the impact, Exxon Mobil Corp. and Royal Dutch Shell PLC, the world's No. 1 and No. 3 oil companies, weighed in with record third-quarter earnings that totaled almost $19 billion.
The companies combined quarterly revenue of $177.16 billion exceeded Denmark's economic output last year.
In a written statement that accompanied Exxon's earnings release Thursday, Lee Raymond, its chairman and chief executive, didn't mention the result was a record. Instead, he pointed out that the figure included "the impacts from hurricanes Katrina and Rita, two of the most significant U.S. natural disasters in recent history," stressed that his company "acted responsibly" in pricing gasoline at company-operated filling stations in the wake of the storms, and cautioned that "reduced volumes and higher costs" will "impact" Exxon's earnings in the fourth quarter.
http://www.post-gazette.com/pg/05301/596812.stm
CBCnews/Business January 26th, 2006 Early market indicators show strength as energy profits pile up.
In the news:
- Crude oil prices rose Thursday as worries about possible supply disruptions from Iran and Nigeria resurfaced, despite U. S. weekly inventory data that showed a larger-than-expected gain in gasoline stockpiles...
- Petro-Canada says its fourth-quarter earnings jumped 62 percent to a record $714 million, from a year- earlier $441 million.
- Annual profits at Canadian Oil Sands Trust jumped 63 percent to $831 million as cash flow topped $1 billion, the big oil sands operator reported Wednesday.
- Shell Canada got caught up in the negative showing in the energy sector, losing 93 cents to $44.32 even as it reported record profits and revenue thanks to strong prices. For the year, profit came in at over $2 billion, $700 million better than a year ago.
latimes.com March 15th, 2006 Oil Industry Defends Its Record Profits.
In their testimony Tuesday, the executives insisted their industry remains highly competitive. And as they did in November, they defended their profits, saying the companies have plowed a large chunk of the money into profits to increase energy supplies.
Some senators pressed the executives on the issue of profits.
"We're representing the people...who are very upset with the price of gasoline," said Sen. Herb Kohl (D-Wis.) "It's hard to explain to them how you all, at a time of record high prices that you're paying for your raw material [crude oil], are able to generate record profits."
http://www.latimes.com/
Guardian January 31, 2006 ExxonMobil makes world's biggest profit with $36bn in a year
But Fadel Gheit, oil analyst with Oppenheimer & Co in New York, said the figures were spectacular in a year when the firm had spent $5bn in each of the last two quarters. "And we have not seen anything yet. I believe these monstrous numbers are just the appetizer with the main course this coming year. Profits will be significantly higher in 2006 unless oil and gas prices collapse, which I do not expect."
http://www.guardian.co.uk/print/0,,5387677-110373,00.html
SBC Yahoo Finance bizjournals.com April 17th, 2006 Renzi seeks investigation into gas price hikes.
Renzi, a Republican who represents most of rural Arizona, wants Congress and the federal government to look at high prices, record oil-company profits and "swelling executive salaries."
Renzi and others are upset that Raymond is getting a mammoth $400 million retirement package.
Exxon Mobil turned a record $36 billion annual profit last year.
"Rising oil prices threaten to hobble America's economy," said Renzi, in a statement. "And if terrorist concerns and other world events were not troubling enough, now we see the outgoing chairman of Exxon fleecing our great nation. Enough is enough. This obscene retirement package makes a mockery of Americans who are forced to pay exorbitant gas prices just to get to work."
http://biz.yahoo.com/bizj/060417/1274221.html?.v=1
What bothers me the most is what I read about the hurricanes. The mainstream media was telling us how the oil companies were hurting because the oilrigs in the gulf were out of service. We were told that the oil companies were losing money because the rigs were down. With what I have read in the articles, it is my opinion that this was all a marketing fabrication for the benefit of the American public.
The proof is in the percentage of profit that all the major oil companies reported and the salaries that they are giving themselves. Let us look at the reported profit percentages. We have BP up 34%, ConocoPhillips up 89%, Royal Dutch/Shell up 68% and ExxonMobil up 75%. Even our government reported that the profit of the oil companies is up 43% and they attribute the increase to higher crude oil and natural gas prices.
Last night I did something that I do not normally do. I watched the news on television. I wanted to see if the mainstream media would report on the prices at the pump. CBS, channel 5 for the Chicago area did report on the prices. They told me that the prices will probably go up to $4.00 a gallon by the end of the summer. They also interviewed several people who need gas to run their businesses (cab drivers, delivery and service truck drivers). These people did not know how they are going to survive if the price goes that high. Most are concerned that they will not be able to continue doing business.
To watch that hurt me. These people are working hard to put food on the table and a roof over the head of their family. You and I can relate because it is happening to people that we know. These people live down our streets and in our neighborhoods. What upsets me even further is that we are only getting lip service from our 'old guard Congress' who represents the people. My question for them is: Where the heck are you with protecting the country's interests? Actions speak louder than words and your actions are telling us that you are only interested in your personal agenda.
From everything that I have read to this point, OPEC is not a major part of this equation. Big oil is driving the market price. Therefore, OPEC, you are partially off the hook on this. I said partially because now OPEC needs to do something to curtail what big oil is doing to the population of the world. They need to drop the prices of a barrel to show the world that they do not condone what big oil is doing. They need to go to the governments of the world and ask them to do something about the price gouging that is occurring at the well.
I will not say that the Arabs are responsible, as the mainstream media would like us to think. It is my opinion that what is being used here is the 9/11 sentiment against the Middle East and it is being used against us. Why I believe this to be true is going to be in my follow-up article, The "Crude" Truth Reasons and The "Crude" Truth People. I had to do this because I have over 300 pages of documents and financials and I seem to add more everyday.
(Side note: The Guardian Business, April 3rd, 2006, Mark Milner reported that "Venezuelan president Hugo Chavez is poised to launch a bid to transform the global politics of oil by seeking a deal with consumer countries which would lock in a price of $50 a barrel."
"We have the largest oil reserves in the world, we have oil for 200 years." Mr. Chavez told the BBC's Newsnight programme in an interview to be broadcast tonight. "$50 a barrel — that's a fair price, not a high price.")
We need to make companies come back to reality and accountability to the people. The big business mergers have to stop to increase competition in the market place. We need to stop the "One World" mentality where the elite are rulers and the people are just servants.
What can you do to stop the madness? You can stop buying gas from Exxon/Mobil gas stations around the world. The power is in the consumer and not the company. A company can only have record profits if we allow them to. I believe that if we do this Exxon/Mobil will have to lower their prices at the pump and we will have competition between the oil companies.
You can also contact your legislator and inform them that you are tired of the lip service and start working for the people who elected them.
The power is in the people and not the government. The government wants supremacy because if the people are supported by the state then they are easily manipulated.
TO FIND YOUR SENATORS AND CONGRESSMEN
Find your Senators=> www.Senate.gov/general/contact_information/senators_cfm.cfm
Find your Congressmen=> www.House.gov/writerep
Find your Congressmen & Senators=> www.MoralLaw.org/delegation.htm
Find your Newspapers=> www.TownHall.com/action/write_media.html/
Find Local Talk-Radio=> www.Radio-Locator.com
© Cynthia A. Janak
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