There won’t be too many tears shed for big oil - except, perhaps by former Alaskan governor and vice-presidential hopeful, Sarah Palin - after the majors reported big drops in profit following a record-breaking feast of profits lasting more than five years.
Along with many of the world’s giant banks, quarterly profits at the likes of Royal Dutch Shell, Exxon, BP and PetroChina have exceeded the GDP of many of the world’s poorest countries. Shell, Europe’s biggest oil company, saw a 62% drop in profit in the third-quarter of 2009 to $3.25 billion, from $8.45 billion in the same period last year. Shell was accused of making obscene profits in 2007 (by all sorts of people, not just trade unions), when it had annual earnings of $27.6 billion, beating a 2006 record of $25 billion. By contrast, US outfit Exxon Mobil, the world’s biggest company by market value, reported a profit of $45.2 billion for 2008, breaking its own record of $40.6 billion in 2007. But now its third-quarter earnings have fallen 65%, as oil prices see-sawed in the eye of the global recession. Its profits came in at $4.73 billion for the quarter ending 30 September. London-based BP said its net income fell 34% to $5.34 billion in 2009, after beating analysts’ estimates for the past three quarters. It posted third-quarter earnings of $4.67 billion. Crude oil has averaged $59 a barrel in New York in 2009, compared with $99.75 in 2008. Oil prices hit record highs above $147 a barrel in July 2008, but plummeted to about $30, before rising sharply again. It’s been a roller-coaster.
By Mark Allix