Investors get much of oil firms' cash windfall
The five largest fully publicly traded oil firms are spending more on finding and producing oil, but the industry is still handing back much of its windfall from record oil prices to investors.
Defence pays dividends for private investorsExxon Mobil Corp., Royal Dutch Shell Plc, BP Plc and two smaller rivals upped capital spending to $29 billion in the first quarter - and spent $20.7 billion (10.6 billion pounds) on dividends and stock buybacks.
Oil companies are handing cash to investors because they plan their businesses at lower prices than today's. Even though the industry is investing more, some say spending on new supplies remains too low.
"The money that is put in is not enough," said Fatih Birol, chief economist at the International Energy Agency, an adviser to 27 industrialised countries, referring to investment by international and national oil firms.
"We can either do two things - either step up the investment or slow down the demand growth."
Record earnings have brought the oil industry under the scrutiny of politicians and consumer groups, who are upset about skyrocketing fuel prices at the pump.
Oil firms are lifting spending after years of underinvestment and rising demand helped propel crude oil's rally from below $20 a barrel at the start of 2002 to a record $123.93 on Wednesday.
Executives such as Shell Chief Executive Jeroen van der Veer say their companies are doing their bit. Shell invested $7.6 billion in the first quarter, more than larger rival Exxon.
"Shell has the largest capital spending programme in our industry today to grow the company and play our part in ensuring that energy markets remain well supplied," he said on April 29.
RISING COSTS
- 1 Pensions fall short on life expectancy
- 2 Brown hopes Bank can cut interest rates further
- 3 Costly living could kill Europe's consumer revival
- 4 Study: Employers see drink as No. 1 threat to employee wellbeing
- 5 Investors get much of oil firms' cash windfall
- 6 Russia foreign investors unfazed by rows with West
- 7 Putin in control as Russia names cabinet
|
- 1 Costly living could kill Europe's consumer revival
- 2 Politics or prudence- Brown faces dilemma
- 3 Banks may swap up to 90 billion pound mortgage assets
- 4 Brown hopes Bank can cut interest rates further
- 5 Europe sails into its own credit crunch
- 6 Brown to reveal housing market plan
- 7 Retail sales fall for second month in April
|
|
