Sympathy For The Oil Industry: Diminishing Returns Start To Hit Home

[phantom power]

Later in March, Jim Mulva, CEO of ConocoPhillips admitted that seeking new oil reserves was not a money making venture. According to Chris Nelder, on Seeking Alpha:
On March 25, ConocoPhillips (COP) CEO Jim Mulva admitted that pursuing new oil reserves just doesn't pay. The remaining resources have become too marginal and too expensive, and the competition for them has become too intense.

Rather than keep slugging it out with bigger and better-funded players in pursuit of growth, Conoco has decided to sell $10 billion worth of its assets over the next two years, all of them in the marginal category, and concentrate on producing its core assets.

The proceeds will be used to buy back its stock, reduce its debt, and raise dividends — just as rival ExxonMobil (XOM) has been doing for the last five years or so.

The risks of searching for oil offshore were brought home this week with the explosion and sinking of the Transocean Ltd. oil-drilling rig Deepwater Horizon in the Gulf of Mexico.

http://www.countercurrents.org/wild240410.htm