cavelamb himself wrote:
BobR wrote:

Peter Dohm wrote:

"Blueskies" wrote in message
.. .

"Steve Hix" wrote in message
...

For starters, look at what companies like that will have to spend in R&D,
developing new field and processes, etc etc etc.

They're not just taking the profits and locking them up in the bank.


Profits are stated after all the costs, like R&D, new field developement,
etc etc are rolled in...

Not necessarily. I am not an accountant, but AFAIK you are not
automatically allowed to expense and/or depreciate everything that would
make good business sense in the year that you might expect...


Most capital expenditures must be paid for up front and depreciated
over their life. A portion of the profits will be paid out in
dividends and a large portion put back into development of new
reserves. The biggest problem from the standpoint of the oil
companies is that each new find will cost substantially more to
develop that the current fields. The high prices are helping to make
some finds that were abandoned as unprofitable look just a little
better for development. They won't be developed though unless the oil
companies feel that there will be some stability in the market.



Everybody seems to be overlooking the tax breaks and subsidies.
Without which, gas would cost us somewhere between $10 and $12 a gallon!


FWIW

Richard

Just imagine what a gallon of gas would cost if the oil companies had
not found so many uses for hydrocarbons beyond burning them up as
fuel. If the only product derived from a $100 barrel of oil was
gasoline a gallon of gas would cost $5 just based on the crude price
alone. A 42 gallon barrel of the best grade of crude, which is the
basis for reporting oil prices, will yield less than 20 gallons of
gasoline. When you add in transportation, refining, more
transportation, distribution and a minimum profit for each step along
the way, the prices are surprisingly low.