Tuesday, April 16, 2013

About those greedy oil companies.....

Yesterday, as part of my collection of Tax Day entries, I posted about how large oil companies pay an incredible amount of corporate income taxes every year (here).  Here, I link to an interesting aricle written by an industry insider who argues that, when all variables are taken into account, the oil industry is not an attractive business to be in.  In fact, in his fascinating article describing 5 facts about the oil industry that most people have no idea about, Ryan Carlyle claims that oil companies make relatively little money:
Frankly, it’s a miracle anyone wants to be in this business at all. I truly think the major oil companies are underpaid. The risk-adjusted returns are crap compared to most sectors. The only way oil companies survive this kind of business environment is by consolidating, so that the risks are spread out over a wider base. That’s why oil companies are some of the largest publicly-traded companies in the world — because they have to be huge to survive.
This is a superb article that has lots of interesting, amazing facts, several informative charts, and counter-intuitive conclusions (HT: Carpe Diem).