SHELL's net profit record 9 Billion

[6.2 G-30 van]

Shell oil company's net profit soars to a record $9 billion.

CNN.com :
http://www.cnn.com/2008/BUSINESS/04/29/shell.profit.ap/index.html

Google search results :
http://www.google.com/search?hl=en&ie=ISO-8859-1&q=shell+profit+record+billion

[More Power]

A quote from the article:


That sent net profit soaring to a record $9.08 billion. Sales were up 55 percent to $114 billion.

That's what, about an 8% profit margin? How does that profit margin fit with the other essential products we all use?

Where I think profits can get out of hand is for oil pumped from US public lands and shores. Oil from public lands that was profitable at $50/barrel is now being traded at $120. I suspect imported oil at $120 is not as profitable for the oil companies.

Jim

[JohnC]

"Big Oil" makes roughly 8¢ per gallon profit. For this they have to get the crude, either by drilling or purchase, build and run the refinery, and transport the materials and product. Contrast that with the roughly 18¢ federal tax per gallon. For that they contribute nothing to the process. "Big Oil" is the easy target, but they aren't the bad guys here. Making their lives miserable will just make ours more miserable.

Big companies make big investments so they can have big sales figures. Big profits are the logical outcome. Record sales means record profits. Expecting anything else is sensless. Do more work and make less money? Not for me, thank you.

Oh, yeah, and our Senator Schumer is an idiot....

[Mark Rinker]

Its the taxes on top of each gallon that are out of line, IMO. The transportation sector needs some relief - that would also help consumers as product prices would stabilize. How about an 'economic stimulus package' that gives a $.20/gallon rebate to every DOT/MC carrying company, for each gallon of road diesel burned in 2008?

MRE's check would be about $2400. (By the way, I am not getting any 'check' on the current program, so if you are - don't laugh at my idea!)

[More Power]

Saw a Shell exec on TV last evening. He said that yes, they made close to $9B in profits, but they also paid $17 billion in taxes - if I remember correctly.

Jim

[tpitt]

Its the taxes on top of each gallon that are out of line, IMO. The transportation sector needs some relief - that would also help consumers as product prices would stabilize. How about an 'economic stimulus package' that gives a $.20/gallon rebate to every DOT/MC carrying company, for each gallon of road diesel burned in 2008?

MRE's check would be about $2400. (By the way, I am not getting any 'check' on the current program, so if you are - don't laugh at my idea!)

Why should we single out just DOT/MC for tax relief. Theres a lot of us that use our vehicles for business and are not DOT/MC. My brother has a heavy haul business with a 600 Cummins. (imagine his fuel mileage) He just charges more and if they don't like the price they have to get someone else. Fuel taxes affect not just truckers, but several small business owners. Anytime we single out certain groups it is grossly unfair.

Don't tell me about the trucking business, I've had a class A license for 43 years. Theres a reason why I never went into the trucking business. Now we have all of the Mexican truckers who will work for peanuts. I agree a lot of the independants have taken it in the shorts, but sadly a lot of them have brought it on themselves. just my 2 cents worth.
flame suit on! tpitt

[DmaxMaverick]

This whole "world price per barrel" is a crock of bull. If everyone were paying the same price, we wouldn't be able to get #2 or gas for $2.10 (or less) a gallon with one mile of the Mexican border (on the other side). And, before you say "they pump and sell their own oil", so do we. Are we gouging ourselves? Sure sounds like it. And, our oil does not "belong" to anyone. Most of the oil now is pumped from public lands, anyway. The per barrel cost should only be a profit for getting it to the fuel pumps. Not the oil itself. Too many hands in the pocket, and we are paying someone an exorbitant amount for something we already own. The "government" doesn't own anything. The people are the government, therefore, anything the government possesses, we have already paid for, or it was ours to begin with. Well, that's the way it's supposed to work, and anything else is unconstitutional.

I have no problem with the big oil company profits. They're just doing what any one of us would do if we were them. Riding a wave created by someone else. And, their profits aren't by the gallon. They make money on the sales. Taxes are per gallon, so if we use less, less tax is collected. No so for the profiteers. That's why they can make more money, even though less product is sold. It's not their fault the "market" (hypothetical entity) inflates the price of the base product. The "market" decides what big oil makes on the product they move.

[93GMCSierra]

One question I have, everyone talks about how much they pay...... however Profit itself is after everything is paid. Thats alot of profit.

[DmaxMaverick]

Petroleum is big business. You are right, their profits are large. But, so is their overhead. 17B in taxes, and a net of 9B? I couldn't survive on that scale. They are providing a product we just can't live without.

Anyone notice the price of other petroleum products? Nothing is selling for more than "normal" inflation increases, that I can see. Motor fuel is over 300% of it was not long ago. Motor oil, plastics, etc. is, maybe, a % higher over the same period. Are they eating the difference? I don't think so (motor fuel is supposed to be the low profit product). I still think there's a lot more to this story than what we are being told. It would seem the price per barrel is for motor fuel, not the oil itself. How does that figure in? Marketing. Profiteering. Dare I say monopoly? Sure, they are divided into different companies, but they are all rowing the same boat.

[93GMCSierra]

Yes I noticed and said something about plastic and other products not going up in price, thus the unusual jump is quite strange.

[JohnC]

It's a lot of profit on an absolute sense, but as percent return on investment it's not all that impressive. I say again, how well would you react if someone asked you to work more hours at a lower rate? My recollection is that overtime was always at a higher rate, not lower.

Has everyone forgotten what happens when price controls are introduced? Do you really want to wait in line for hours to buy 5 gallons of fuel at a better price? Sorry, odd number plates only today...

[DmaxMaverick]

Yes. Be very careful what you wish for. Government regulation has never worked in the past (name one). What makes anyone think it will now? What's changed? Certainly not government regulation strategies.

[JohnC]

Maybe they think they can learn from past mistakes. Oh, right, the whole idea was a mistake.... So, maybe they can't learn...

[DmaxMaverick]

Those who do not learn from history are doomed to repeat it. Someone important said something to that effect, and I'm sure I butchered it. The message is the same, though.

[SoTxPollock]

Railing about the Big Oil Companies really does one thing for me. It confirms the ignorance of our politicions. We have Big Oil companies that provide us with fuel so we can drive.
Lets say there are NO OIL COMPANIES, so each one has to drill his or her own oil well in their own back yard, extract the oil, build a refinery to process it to make the fuel, and oil to run our vehicles with, also in their own back yard. Which one of us could do that? Of course if you live in an apartment or condo, you don't have a back yard so your out of luck. No car for you. Those same politicions are starting to say they have to cut back on the tax credits to those making bio-diesel, those pioneers who are trying to do a little good, first in their own back yard, and then own to larger companies etc. Lets face it folks our government is and has been broke for a long, long time. The survivors of such a broken institution will always be the ones who can still think and do things for themselves. Lets hope it never gets to the point where we have to provide our own instead of buy it from someone else.
Every time the government gets involved in what used to be called the free interprise system, they screw it up, sometimes beyound repair. I suggest we do all we can to keep others from telling what to do and how to think. Free interprise will always be the best system, once they start to tax it, we're all in trouble. We pay taxes to support those whom we elect to represent us in the "collective bargining process called Government". I think our elected and those running for election have shown us how bad the process has really become. Talking about work, never has gotten the work done, only those who actually do the work can see that they have gotten something done. Our politicions can talk forever and will have accomplished little other than to spend our money and get us farther in debt.
Oh I could go own forever, but I've got to get back to work. Have a great day.

[93GMCSierra]

One interesting aspect of sotx's post
so each one has to drill his or her own oil well in their own back yard
Some would devise a different, possibly better alternative, to our transportation problems. The thing I dont like about big oil is... they are in the business to make money and that means putting down anyone that can beat them, common business practice, in the end it also makes it an effective monopoly and when that occurs do not presume to think customers are better off. I dont think there are to many genuinely altruistic business that actually make it.

[SoTxPollock]

One of the problems I see here is that there seems to be a jump on the bandwagon of "Lets get the big oil companies", as if they we all one and not competing with each other.
Nothing could be farther from the truth, I have spent 45 years now designing equipment that goes into those refineries and processing plants. I have read and written some of the specifications of those companies, like Gulf Oil, Unocal, Continnetal Oil, Royal Dutch Shell, Exxon, Mobil, Texaco, Arco,........ many of which required a signed agreement of secrecy that would not allow you to divulge information they considered confidential to their particular company. They are highly competitive against one another. If there is anyone out there that thinks they can beat them, bring it on.

The American Oil companies have developed the industry for every major industrial or emerging industrial country, except a very few of the earlies like Japan, or Germany, or Great Britian. Attacking the "Big Oil Companies" is armchair quaterbacking and political posturing on the part of those wanting to tell you anything they think you want to hear, so you'll vote for them.
The oil industry was not developed by the USA government, it began with "free interprising individuals who sunk their personal fortunes into drilling for oil because they saw a need for it coming in the future and they made this a great country, where one can go anywhere one wants to coast to coast and not have to worry about fuel, unless the government steps in like they did with the Arab oil embargo in the 70's, then there were long lines for fuel and I personally slept in the van we took to the races at a filling station until they opened the next day so we could maybe get enough gas to get home, since the government took away that embargo and let the ships come in we haven't had to do without gas at the stations except in rare hurricane or flood disasters. I don't know where the prices are going, I hope the bio-fuels really get going good, so we don't have to worry about where our next fill up will come in while we wait in line.
My personal intent in to not put anyone down, I know I've contributed to the lowest prices in America for fuel for a long time, the system is not perfect, never will be, but sure beats the $9.00 a gallon in England.
Question for someone. How much bio-diesel can I make with 250, 000 lbs. of corn?

[More Power]

I think everyone can understand the cost at the pump when world market-priced imported oil is at $120+ per barrel.

According to a recent article in the Detroit Free Press, "Crude oil prices account for 72% of the price of a gallon of gasoline, with the rest coming from refining, transporting and taxes".

Now, what I don't understand is, what about oil pumped from United States public lands and territories? Oil pumped from U.S. public lands (oil that belongs to you and me) should not be priced at world market levels. It should be priced at U.S. market levels - certainly way less than $120.00/barrel.

According to Brian Schwitzer, Governor of Montana, there is enough coal in the U.S. that, when converted to petroleum, would replace all imported oil for the next 200 years (at current import levels of 4 Billion barrels annually). Current coal/oil conversion costs are between $40 & $50 per barrel. We could be energy independent within a few years, once all of the syn fuel plants came online. OPEC be damned.

Global warming and its related carbon tax nonsense could change everything. That's why large-scale coal conversion isn't being done as we speak (There is already one small plant in North Dakota and another that currently supplies the U.S. military). The investors don't know what will develop with upcoming carbon tax laws, and won't invest till they know how bad Congress will hit them with new carbon (CO2) taxes.

Congress is proposing $18,000,000,000 in new energy taxes..... Congress at work for the American people... :(

Jim

[SoTxPollock]

MP, your a genius, and here's why. If we could get Congress to pass a law that oil extracted from public lands shall not be traded on the oil futures market, that would be a start, then we could get them to amend that law to include all oil extracted from all US and US territories. That would prevent the oil speculators and major investors in oil from buying oil futures just to have a place to put their money as a hedge against inflation and the falling american dollar. That would let them buy and sell the foreign oil futures as usual and still make money or loose it, but it wouldn't be destroying our economy as it is now.
If we could do that, then the oil companies that actually explore and refine oil could price the oil instead of having the oil futures commodity market price it. I believe that would bring the price down to a very reasonable level, but until we get the invironmentalist to open up the locations where the known oil deposits are, and your are right, the midwest is full of oil\shale oil\coal etc, but there aren't enough realists left in Congress to allow us to go after the oil. Someone a long time ago, a very few very powerful people deceided that we would buy all the oil from the rest of the world and use their supply up first and that would guarantee our ability to be the last one standing in the energy battle. I guess the question is slowly becoming have we reached the breaking poing where we aren't gonna take any longer and put the people with enough intellegence in Washington D.C. to see things the people's way and get the process working in the people's favor instead of more taxes and higher fuel bills. If we could get our government officials to operate on the same system that all people have to operate under, we would have a chance, but for now our government operated under an elitest, almost royalty type of system, where they have everything they want at our expense and we can't do anything about it, or so it seems.
Your idea about the public lands oil is the best approach to solving this problem I've encountered. When are you going to run for Congress? I'd vote for you if I lived in Montana. Racers are thinkers, too bad more people don't race.

[curmudge1]

I guess the "gummint" could force the oil companies to cap the price they get for oil from US gov't leases, but how would that affect the incentive the oil companies have to explore and pump and extract more oil from old wells, etc.? And, bid on the leases?

Who would you trust in the govt to get this "right"?

Would you force the oil companies to pump "cheaper" oil from the leases? How much? Certainly a blend of say, $50 per barrel oil and $120 per barrel oil would bring the price at the pump down.

I saw this syndicated column in my newspaper, found it online here:

http://www.ohio.com/editorial/commentary/18839509.html


FWIW.

Dave in NJ

[More Power]

Exploration for new oil is controlled by the enviros, not by profit margin. The billion dollar Alaska pipeline was built with corporate money more than 30 years ago, when crude oil and pump prices were a fraction of what they are now.

I've read where big-rig truckers living on the southern border are traveling into Mexico, where they have been reported to save up to $500 on a fillup.

Capping profits is almost always a bad idea. Perhaps the public should charge more for the oil found on public lands.... I'm just saying... ;)

Jim

[JeepSJ]

I think everyone can understand the cost at the pump when world market-priced imported oil is at $120+ per barrel.

According to a recent article in the Detroit Free Press, "Crude oil prices account for 72% of the price of a gallon of gasoline, with the rest coming from refining, transporting and taxes".

Now, what I don't understand is, what about oil pumped from United States public lands and territories? Oil pumped from U.S. public lands (oil that belongs to you and me) should not be priced at world market levels. It should be priced at U.S. market levels - certainly way less than $120.00/barrel.

According to Brian Schwitzer, Governor of Montana, there is enough coal in the U.S. that, when converted to petroleum, would replace all imported oil for the next 200 years (at current import levels of 4 Billion barrels annually). Current coal/oil conversion costs are between $40 & $50 per barrel. We could be energy independent within a few years, once all of the syn fuel plants came online. OPEC be damned.

Global warming and its related carbon tax nonsense could change everything. That's why large-scale coal conversion isn't being done as we speak (There is already one small plant in North Dakota and another that currently supplies the U.S. military). The investors don't know what will develop with upcoming carbon tax laws, and won't invest till they know how bad Congress will hit them with new carbon (CO2) taxes.

Congress is proposing $18,000,000,000 in new energy taxes..... Congress at work for the American people... :(

Jim

One big problem that we have is that we can't refine much of the oil that we pull out of Alaska, which is why we sell that off to Asia. We must buy the stuff that we can refine on the open market.

We need new refineries that can refine the stuff that we are pulling out of our own sources. We have not had a new refinery built in nearly 30 years and existing plants are running at nearly 100% capacity, which means shortages if any one goes down for maintenance or breakage.

Who is to blame for those problems? Not the oil companies. Their profits would soar because their cost of production would come way down (and hopefully the price of fuels would follow).

[More Power]

One big problem that we have is that we can't refine much of the oil that we pull out of Alaska, which is why we sell that off to Asia. We must buy the stuff that we can refine on the open market.


There have been conflicting reports about whether AK crude gets exported to Asia. I read that the oil companies do sell some of it to Asia, and consider it a trade for the oil they import from the bad guys, where it is delivered to the East coast.

I wonder what it costs to extract AK oil and what they sell it for... In my opinion, no U.S. oil should be exported.

Back in the early 80's, it was reported that Saudi Arabia's cost of extraction was $4/barrel. When world market price soared at that time, it reached the high $30's/barrel. When Reagan began promoting and lobbying for a major coal/oil gasification program, OPEC dropped oil to a world market price of $9/barrel to prevent the U.S. from economically converting coal.

The U.S. could do it again. Only this time, follow through, and create energy independence...

Jim

[93GMCSierra]

I seen on the news that most refineries are shutting down production because there is less demand in the us. They say its getting too costly to keep up production when less fuel is consumed, seems like a scam to me though to keep supply lower then demand.

[JeepSJ]

There have been conflicting reports about whether AK crude gets exported to Asia. I read that the oil companies do sell some of it to Asia, and consider it a trade for the oil they import from the bad guys, where it is delivered to the East coast.

I wonder what it costs to extract AK oil and what they sell it for... In my opinion, no U.S. oil should be exported.

Back in the early 80's, it was reported that Saudi Arabia's cost of extraction was $4/barrel. When world market price soared at that time, it reached the high $30's/barrel. When Reagan began promoting and lobbying for a major coal/oil gasification program, OPEC dropped oil to a world market price of $9/barrel to prevent the U.S. from economically converting coal.

The U.S. could do it again. Only this time, follow through, and create energy independence...

Jim

But we would need someone in office who actually had a pair.