Categotry Archives: Economics

Major Comparison 2015

Similarly to what I did last year, now all the 2015 annual reports are out I thought it would be interesting to create tables showing revenues, profits, number of employees, and profit per employee for each of the majors. Despite the prolonged downturn, ExxonMobil is still doing very well as a company.  True, revenues are down and profits halved but any company that can make north of $16bn clear profit in the biggest slump in a generation must be doing […]

Newfound pain

There’s a long but interesting article in Canada’s The Star on how the decline in oil prices has hit the city of St. John’s in Newfoundland.  It is interesting because although St. John’s does have an offshore oil industry, it is not a traditional coastal oil town in the manner of Aberdeen or Stavanger, and is often overshadowed insofar as the Canadian industry goes by Calgary. Though Newfoundland is some 6,500 kilometres east of ground zero for Canada’s oil industry, […]

When engineers ignore economics, Part 375

One of the many side effects of the collapse in the oil price is a proliferation of nonsensical articles on the subject.  Today I stumbled across this in LinkedIn. It must be hard for the world to have sympathy for an oil and gas industry that has been so extravagant and wasteful. Why yes, it must be. The Hubbert curve is a logistic model showing the theoretical depletion of worldwide resources over a two hundred year period.  It has a steep ramp up […]

Nations and Corporations: Parallel Decadence

It can sometimes be an interesting exercise to compare countries with corporations.  Not in the usual sense that dimwitted Social Justice Warriors do when they compare a company’s market capital (a stock) with a country’s GDP (a flow).  You might as well compare a lake with a river (and iif you’re a SJW, express concern that the Rio Grande is bigger than Crater Lake).  On this point, Tim Worstall explains all. No, I’m thinking more along the lines of how […]

Profile view

One of the most damning things about the state of the oil industry is how this downturn – which has sent oil to between $40-$50 per barrel – has caused the whole industry to freeze like a rabbit in the headlights.  As I have said before: We last saw $50 per barrel oil in late 2004, before which it had been consistently lower than that.  I was working in the industry in late 2004 and I don’t recall there being […]

Major comparison

Following on from this post, I thought it would be interesting to do a little digging and prepare charts for each supermajor showing their revenue, profit, staff headcount, and profit per employee for the past 3 years. Once again, I will state that this is a pretty crude method of judging a company’s performance.  One obvious shortcoming is the fact that as Upstream revenues have dropped, the profitability of Downstream sectors – which are more labor-intensive – has increased, and so one […]

Where the axe should fall

ExxonMobil bucks layoff trend reports Upstream Online. ExxonMobil will not make any major staffing cuts or reorganisations of its corporate structure, bucking a growing trend within the industry of operators slashing their headcounts in order to preserve cash amidst the steepest decline in oil prices in decades. I suspect the reason for this is that they were running a pretty lean operation to begin with.  Take a look at the table below (numbers taken from Wikipedia: ExxonMobil, Shell, BP, Chevron, […]

Un caso de una cesta

As was expected inevitable, the Venezuelan economy is tanking thanks to blitheringly idiotic socialist economic policies and a plunging oil price.  The former bus driver who is running the country had this to say: President Nicolas Maduro said the economy had been hit by political instability and falling oil prices. He accused the United States of flooding the markets with oil as part of an economic war against Russia. This must be the only time in history a country has […]

One supermajor too many?

It is difficult to talk about the oil price these days without somebody or other popping up with a conspiracy theory involving the Saudis deliberately not cutting back on production in order to simultaneously cripple Russia, damage Iran, and hobble the fledgling US shale oil industry. Streetwise Professor does an admirable job of explaining why this is bollocks, that the price drop is from the demand side, and the Saudis cutting production would cause them to lose revenue (which is […]

“However did this happen?!”

I once worked for a company that was, by and large, run by a group of acquaintances if not actual mates.  The company was appallingly run, and survived largely on handouts from its parent company that did extremely well out of a monopoly position kindly granted to it by the government.  A feature of this company was regular reorganisations which saw the same dozen or so men (all of the same nationality) shuffled between the senior positions in HQ like […]