http://www.msnbc.msn.com/id/12689611/snip>
Browne's comments underscore a surprising point. Big Oil, that clutch of oil and gas giants in the U.S. and Europe, has big problems. Yes, we know it sounds ridiculous. Exxon Mobil Corp. has been reporting the lushest earnings in the history of the business, notching up $8.4 billion in its latest quarterly report. Combine the forecasted 2006 earnings of BP, Royal Dutch Shell, Chevron, Total, ConocoPhillips, and ExxonMobil, and you get roughly $135 billion, a sum greater than the gross domestic product of the Czech Republic or Israel. These companies, moreover, enjoy huge political clout in their home countries, have spotty environmental records, and staunchly defend outrageous prices at the gasoline pump. Why worry about them?
Well, you don't have to love the big oil companies to worry about their ability to provide us with the energy we need. That job is getting difficult, thanks to huge technical challenges, competition from national oil companies, and demanding, even hostile foreign governments. Just look at events in Bolivia on May 1, when the government abruptly nationalized the nation's gas fields.
snip>
But even if oil prices were to slump — and pros like BP's Browne believe that prices could still "turn on a dime" — the predicament of Big Oil and its customers would persist, since so much of the global oil patch is now off-limits. In theory that shouldn't matter, as long as someone is getting the oil to market. In practice, though, the private oil companies are better than national companies at the technology and innovation that get the best results. Over the long haul, if Big Oil can't apply its skills fully, consumers will suffer more than they expect.
snip>
Companies also say it's not easy finding the personnel needed to man these projects, especially in the West. In Russia, China, and elsewhere, it's a different story. Russia's Gubkin Institute of Oil & Gas has an enrollment of 8,000 students and adds 1,500 each year — more than the total native British and U.S. students studying petroleum science, says Joseph A. Stanislaw, senior adviser to Deloitte & Touche's energy practice. The scarcity of people and equipment is delaying projects, putting further pressure on costs and prices. Rigs are being channeled to development projects, which provide quicker profits, rather than pure exploration, possibly diminishing future prospects.
Wait a minute, how does that paragraph was with the snippet right before it?more...