Hot on the heels of Business Week laying into the oil majors, now the Financial Times is doing it too. Although they are making “unprecedented profits” and have returned well over $120bn to shareholders, the FT says these are “uncertain times for the international oil companies”.
Once again the issue of gaining access to reserves is explored. “The first, and perhaps largest, problem they face is getting access to new resources. About three-quarters of the world’s oil and gas reserves are off limits to them because governments such as Saudi Arabia do not allow them to participate”.
Coupled with declining mature fields, hostile governments increasing their tax burden, and a host of countries renationalizing or tightening their grip on their oil assets, all is not rosy with Big Oil.
Unwanted by countries such as Saudi Arabia, the majors are being forced into frontier areas of the world – such as ecologically sensitive Sakhalin or into “unconventional” technology, such as the equally damaging tar sands in Canada. What this means that every barrel of oil carries a higher ecological price than the one before.
Instead of destroying these fragile ecosystems, the majors could be spending their vast stockpiles of cash on kick-starting the renewable revolution. So what’s stopping them?