An excellent story on the plight of the big U.S.oil companies, as other countries, favoring their own state-run firms, lock them out:
Oil production has begun falling at all of the major Western oil companies, and they are finding it harder than ever to find new prospects even though they are awash in profits and eager to expand.
Part of the reason is political. From the Caspian Sea to South America, Western oil companies are being squeezed out of resource-rich provinces. They are being forced to renegotiate contracts on less-favorable terms and are fighting losing battles with assertive state-owned oil companies.
And did you ever think you’d read the following passage in the NY Times?
Sluggish supplies have prompted a cottage industry of doomsday predictions that the world’s oil production has reached a peak. But many energy experts say these “peak oil” theories are misplaced. They say the world is not running out of oil — rather, the companies that know the most about how to produce oil are running out of places to drill.
“There is still a lot of oil to develop out there, which is why we don’t call this geological peak oil, especially in places like Venezuela, Russia, Iran and Iraq,” said Arjun Murti, an energy analyst at Goldman Sachs. “What we have now is geopolitical peak oil.” [emp. added]
Nobody is better at getting oil out of the ground than Americans. But our producers are increasingly locked out of other countries — and wide swaths of our own.
Not that the oil companies were especially far-sighted on this matter, of course:
Unquestionably, the oil companies could have done more. They failed to invest heavily in exploration after the oil-price collapse of the mid-1980s, which lasted through the 1990s. […]
The major companies picked up their capital spending around 2005, although much of the increase has been offset by the soaring cost of development. Exxon, for example, expects to spend about $25 billion annually for the next three years to expand its business, compared with $15 billion a year from 2002 through 2006. [emp. added]
Hmm… what else happened in 2005? Oh yes, Congress passed a law enabling oil companies to write off more of their capital expenditures, one of those “tax breaks for the oil companies” that Democrats (and some Republicans) have been trying to take away ever since. Now is not a good time to do that, according to this piece. Does the NY Times edit board agree?