Oil Profits: BP, Shell And Exxon Mobil

In concert with BP, Royal Dutch Shell and Exxon Mobil have both reported record quarterly profits: 2008 - 3rd quarter BP = $10bn (3Q: $4bn in 2007) 2008 - 3rd quarter Shell = $10.9bn ($6.4bn in 2007 ) 2008 - 3rd quarter Exxon Mobil = $14.8bn ($9.41bn in 2007) This is based on the fluctuating price of oil. This 'fluctuation' can 'theoretically' be manipulated by ramping up or cutting production. As two separate companies, Shell and Exxon seem to be joined at the hip. Profits in 2005.

• Coincidentally, BMW (Bavarian Motor Werks) posts a big loss for the same period. In the redistribution game of Winners And Losers, the oil company (Winner) achieves record profits as a procurer, but the user (car manufacturer) has a large trading deficit (Loser). The ultimate Loser is the product buyer and depreciation is another loss maker.

Shell claims to have benefited from higher oil and gas prices [linked and chained together in the UQ (aka UK)] and represents terribly bad luck (oxymoron): a real 'bummer'. Crude oil prices were more than 50% higher and gas realisations some 48% ahead of the same quarter last year (2007) and the concept of the windfall tax does nothing to correct any distortion between profiteering and fairness. British Gas - The Owner (Centrica) The government is the sole beneficiary from this occasional (unpredictable) and arbitrary tax, yet the prices (and profits) remain in place to the disadvantage of the consumer and make way for a future 'windfall' tax (predictable).

• Taxation = redistribution
• Winner = government
• Loser = taxpayer

Shell (Chief Executive and Director, Jeroen van der Veer):

• Steering the Shell ship through rough waters
• Yes, we are generating large profits
• Yes, we have the largest investment programme in Shell's history to create value for shareholders and to play our part in providing safe and cost competitive energy for consumers

This illustrates the hard times and treacherous journey Shell is experiencing. 'Large' profits benefit the shareholder ('value') who theoretically could also be a consumer, but is probably not. Certainly a (very small) minority only (of consumers) will be shareholders.

• The large investment programme is mysteriously linked to "benefited from higher oil and gas prices"

• Shell's bad luck is just doomed to continue.

The Shell strategy remains: "pay competitive and progressive dividends"

• Winner = Shell
• Loser = consumer

Peter Voser is currently Chief Finance Officer and Director and the probable future (summer 2009) Chief Executive:

• The company is on track to reach its target
• Asset sales of $5bn this year
• 'Credit crunch' was curbing the number of buyers
• No rush to sell assets
• Not a fire sale

It seems Exxon Mobil is having a hard time too by benefiting from high prices of its crude oil: $162m a day or $113,000 a minute. And that's even with the disruption caused by hurricanes Gustav and Ike in the Gulf of Mexico.

• Exxon Mobil has maintained a strong financial position despite all the difficulties

It must be tough. Like trying to sell water to people in a hot desert