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Thesis & Antithesis

A critical perspective on energy, international politics & current affairs

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Location: Washington, D.C.

greekdefaultwatch@gmail.com Natural gas consultant by day, blogger on the Greek economy by night. Trained as an economist and political scientist. I believe in common sense and in data, and my aim is to offer insight written in language that is clear and convincing.

08 March 2006

Exxon’s aggressive strategy

ExxonMobil has just announced an aggressive strategy; its press release said that, “the company expects to start up more than 20 new global projects in the next three years to produce even more energy to fuel vehicles, light and heat homes, and power businesses around the world” (link). Its new chief executive suggested that “upstream projects, from the Caspian Sea to the deepwater Gulf of Mexico, could over time bring on the equivalent of 2.5 million barrels of new oil a day” (link).

This is interesting for two reasons. First it underlines the link between prices and investment—in a market which is so often presumed to be riddled with imperfections, there are certain sound dynamics at work and ExxonMobil’s plan reveals that. The second is that the presumption among industry experts is that the reason oil companies make so much money is that there are few good investment opportunities out there. Call it the end of easy oil. And also call it inaccessible oil, either for geology, geography or politics. The success of ExxonMobil’s strategy will be a good test case for this hypothesis.

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