Saturday, May 09, 2015

rex knows his company is in liquidation and is terrified his stockholders will find out...,


dailyimpact |  Arthur Berman is perhaps the most credible debunkers of oil hype on the planet because he is a highly qualified petroleum geologist and a longtime, top-tier employee of the oil industry. In a presentation early this year, he made an offhand remark in answer to a question about Exxon Mobil CEO Rex Tillerson. “Oh,” Berman responded, “Rex knows his company is in liquidation and he’s terrified his stockholders are going to find out.” I don’t know if anyone else heard a thunderclap at that moment. The discussion moved quickly onward, but I sat stunned (as I listened to the tape). It seemed to me I had just heard spoken aloud the essential truth of our industrial age: it’s in liquidation, and the people in charge are terrified we are going to find out.

Liquidation, also known as a going-out-of-business sale, is a stunning word to use about the oil industry, unless you think about it for a minute. A company in liquidation stops making or buying its product and keeps selling until its inventory is gone, then turns out the lights and locks the doors. Oil companies don’t make oil, they have to find it, and they aren’t finding any. What’s more, take a look at their capex (capital expenditures for exploration and development) numbers and you see that after a decade of increasingly frenzied and expensive searching for new oil fields, with ever-diminishing returns, the industry has virtually stopped looking. Which brings us once again to the shoals of peak oil.

Oil hypists have been declaring the “theory” of peak oil to be dead since the phrase was first used. Never more enthusiastically than when the shale oil “revolution,” a.k.a. the fracking boom, took hold in America five years ago. The assault on logic and uncommon sense was massive, well funded and for a time successful: for a while, the term “peak oil” became synonymous with “loser.” Not any more. Peak oil is back, and Rex Tillerson is, if anything, more terrified than he was at the beginning of the year.

0 comments:

What Is France To Do With The Thousands Of Soldiers Expelled From Africa?

SCF  |    Russian President Vladimir Putin was spot-on this week in his observation about why France’s Emmanuel Macron is strutting around ...