Record profits for oil majors in 2006
2006 will be remembered as a year where the price of the barrel of oil hit shortly $80. Oil is a very lucrative business, to exemplify my statement I will give below the profit earned by the five major oil companies worldwide.
According to the Figaro (dated 2/2/2007, page 22) the average price of the barrel in 2006 was of $69.5 when a year earlier the average was of $51.3. As I write, the price of a barrel is $58.30 at the New York Mercantile Exchange (NYMEX ; website). The high prices of oil are the main responsible for so important benefits for oil companies.
- Total, a French company did 12.6 billion € ( approx. $16.55 billion)
- BP did $22.4 billion
- Royal Dutch Shell, $25.4 billion
- Chevron Texaco with $13.3 billion
- and finally Exxon Mobil, the leading oil company broke all records with nearly $40 billion.
The five majors hence did more than $117 billion in profits for the year 2006.
To go further, I would like to quote here a paper I wrote on the oil industry last year at the Audencia Nantes Management School for my Master’s degree :
“Mankind needed around 85 millions barrels of oil per day in 2005, and as the price of a barrel is around 65 US Dollars we can estimate the oil industry is making 85 million X 365 X 65 = 2,016,600 million USD i.e. around 2,016 billion dollars.”
This gives an idea of how really oil is in our world nowadays. This resource is indeed the basis of our energy needs as it accounts for 37,5 percent of the primary energy source worldwide. (IEA, 2003)
If you were interested in reading the whole paper on the oil industry, you can contact me via e-mail or by leaving a commentary for this post.