Wednesday, May 28, 2008

Big Oil Defends Profits

Recently top executives of the five largest oil companies said they were helpless to reduce profits even when Exxon's annual profit increased from $11.5 billion to 40.6 billion in the past five years. Executives claim that it is simply impersonal supply and demand. They are only partly right. High profits in theory should increase supply, but these oligopolies have no incentive to build new refineries, which they have not done for 40 years. The industry points to things like terrorists destroying oil installations in Nigeria. I wonder why? Perhaps if the oil companies would share a bit of their wealth with the local people, they would help protect the installations rather than destroying them.
When Stephen Simon, vice of Exxon was asked how much his salary was, he claimed he did not know. This is unbelievable, it must be nice to make so much money you can't remember how much!