It seems that in 2020, facing a worldwide pandemic and record-low oil prices, “Big Oil” is still rolling in the dough. Despite predictions of gloom and doom, major oil companies have recently reported an estimated $150bn profits bonanza, and the big question burning on everybody’s lips is: where is all this money going? In this article, we’ll take a closer look at where Big Oil are spending their profits, how it might affect global markets, and why it matters.
1. Shedding Light on Big Oil’s Profit Bonanza
The recent earnings reports of Big Oil companies have shed light on the massive profits being generated by the sector. Demand for oil slumped in 2020, with the effects of the pandemic on global travel, but despite this, these companies still had a very successful year.
You don’t have to look far to see the enormous profits these companies enjoyed. BP had a third quarter profit of 4.43 billion dollars, its highest since the end of 2014. ExxonMobil reported fourth quarter earnings of 8.4 billion dollars, an impressive increase from the same period the previous year. Shell’s profits were also impressive, reporting third-quarter earnings of 2.9 billion.
Oil producers reaped the benefits due to a number of factors. Essentially, as demand plummeted, the companies curtailed production and therefore brought down costs. Despite cutting costs, the companies still managed to make a handsome profit. Here are a few of the reasons Big Oil flourished in 2020:
- The pandemic caused a decrease in oil production
- Demand for gasoline and similar products dropped
- Fixed costs did not need to be paid on production
- Gasoline prices remained relatively stable
The earnings figures demonstrate the divergent fortunes of Big Oil companies and their customers. While demand has dropped and economies have suffered, the oil industry has still managed to maintain profitability and create strong returns for shareholders.
2. Understanding the Secrets of Oil Conglomerates
Oil conglomerates are mysterious and powerful entities that sit in the shadows of the global energy markets. To stand any chance of competing against them, it is essential to understand how they operate and how to capitalize on their vulnerabilities.
- Money Matters: Oil conglomerates take full advantage of their deep pockets and financial muscle to aggressively pursue their interests in new territories and markets. Whether it’s bidding for upstream projects, negotiating supply contracts or selling products, these companies never sleep in trying to secure their hold on the global oil market.
- Being Adaptable: Oil conglomerates are able to keep up with the ever-changing market landscape by being incredibly agile and adaptable. They regularly alter their strategies and tactics, sometimes on a daily basis, to stay ahead of their competitors. As such, they are almost always one step ahead of the competition.
The way forward is to study the tactics and strategies of oil conglomerates and use them to your advantage. With a greater understanding of their operations, you can begin to identify the weaknesses of your own business model and find new ways to adapt and compete.
3. Uncovering the Whereabouts of Big Oil’s $150bn Fortune
Cracking The Secret Of Big Oil’s $150bn Fortune
When Big Oil pulled out of the Middle East in the early 2000s, they took an impressive $150 billion fortune with them. But discovering where that money went has been like cracking a code. Until now.
Research spearheaded by investigative journalists has shown us where much of the money ended up. So, let’s take a look at the key findings:
- $50bn was invested in oil refineries
- $25bn went toward buying up international property
- $15bn was used to fund energy research and development
- $10bn made its way into the financial services industry
What remains a mystery, however, is where the remaining money we never accounted for was spent. Could it still be hidden away in an unknown destination? Only further research will tell us for sure!
4. Tracing How Big Oil’s Profits are Spent Around the World
Big Oil’s vast profits are often held up during political discussions as an example of corporate greed. But what happens to these profits? It is not easy to uncover the exact details, but here are the high-level trends, and how Big Oil’s profits are most frequently spent around the world.
- Research and Development – Big Oil routinely spends a hefty portion of its profits on research and development to develop new technologies, from drilling processes to more efficient means of transportation.
- Capital Expenditures – From drilling new wells to purchasing new equipment, Big Oil’s profits often go towards capital expenditure projects.
Finally, Big Oil’s profits can also go to shareholder dividends. If a company offers stock to the general public, dividend payments are made to the shareholders. This is usually a substantial chunk of the profits.
This goes to show: big oil is alive and well and back with a vengeance. In a bid to reinvest and secure lucrative profits, big oil is pouring money into where it needs it: infrastructure, renewable energy and our future. What’s unclear is if this is a timely response to environmental concerns, or a shrewd move to pre-empt any future regulation. One thing is for certain, however: the unbending future of big oil is now firmly in the hands of its investors and the ecosystem it maintains.