Question:

If the gas/oil companies are just sucking in all this money, what are they doing with it?

by  |  earlier

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Ok, so the oil companies are jackwhacked out of their minds.... and they're collecting all this money for their product.... but what are they doing with that money?

All they have to do is spend that money and it goes right back into the economy. Why can't the oil companies at least BUY BUY BUY instead of saving and collecting money. Ok, we get it, oil companies like to have all the money in the world! so , why aren't they spending it?

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4 ANSWERS


  1. Oil Companies are just like other trading companies. Because of the high price of oil, gas/oil companies can make huge profit from their oil and oil products. In turn, they can pay higher dividends to their shareholders and make higher provisions for their reserves.  Actually, all the crude oil producing countries, like Russia, US,Africa etc, and OPEC are the ones that are making huge amount of money. These countries invest their money in first world countries, like Banks, Government securities etc. But most of their money goes into prospecting for new oil wells, in researches and maintaining their oil stock piles. And most OPEC countries helped their people by providing cheap oil for their cars and other transportations. In fact OPEC, maintain that the high oil of price is not due to the lack of oil supply. I think the current record high crude oil price is due to the weak dollar, and speculators are hedging by buying crude oil due to the weak dollar. So, the FEB must now take steps to strengthened the value of the dollar to stop the price of oil from getting higher.


  2. There paying their CEO's extravagant salaries and earning their stockholders record dividends.  And no one is trying to stop this.

  3. They pay it in dividends to shareholders and in tax receipts to their governments. In Europe tax rates are very high, so even though BP/Total/Shell  generate good profits the government takes a huge slice.

    Also prospecting costs have increased hugely and are sucking up the money. A North Sea prospecting rig in 2005 was $13,000 a day to rent, today is $485,000.

    Http://www.cityunslicker.blogspot.com

  4. They are investing out of the country where the money is worth more...

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