The Oil Drum

73 comments on New BP statistical review

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oilaholic on June 15, 2006 - 12:48am

Why own a resource extraction company that has no hope of replacing it's production. Oil is increasingly the property of the country in which it is found, a paradigm shift of catastrophic proportions to the E&P world, particularly the majors. Soon they will be reduced to doing contract extraction work, not the past model of exploring and producing for their own account, minus a "royalty". Even the Canadians are now getting very nationalistic about oil - note today's story about Newfoundland refusing to let XOM and another major (Shell, I think) roll over them and threatening to cancel existing contracts. Sounded like Venezuela. And this from our northern neighbor. I can't imagine wanting to own a major oil company when there are so many more attractive ways to play the future of oil. By the time oil is over $150, the majors won't have any left to sell.

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wstephens on June 15, 2006 - 7:00am

I agree. Many oil stocks ("growth" investments) will need to be re-priced -- i.e. as bond-like investments ("return on/of capital" investments). Energy production trusts are already priced this way and may be a better "investment" on that basis.

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