Connecting Dots

Connections not Coincidence

Big Oil and the coming bailout

On

Big Oil and the coming bailout

By

This was originally posted on September 22, 2020 on my old blog and is ever so slightly updated.

Exxon et al. are on track for a bailout that will make the financial rescue of β€˜08 look like handing a lollypop to a child.Oil companies – no matter what you think of them – create an essential product for modern society.
Covid has caused a temporary surplus of crude which in turn has brought down prices significantly.
US producers have been leaning heavily on horizontal / fracking to extract oil. This method of extracting oil is considerably more expensive than traditional drilling.  The reason why oil companies are going that more expensive route is because there are fewer and fewer vertical drilling locations available that economically make sense -we are running out of the affordable oil that society is built on.

The result of companies switching to more expensive production is that – for example – the free cash flow from Exxon has dropped from 30-40bn/year in the mid 2000’s to 5-10bn with more and more quarters showing negative cash flow.

XOM is borrowing money to pay dividends. In an indirect way – borrowing money and then giving it to shareholders reduces the net equity in a company – management is choosing to return investors their own capital in a tax inefficient manner to keep up appearances.

If these trends continue – increasing cost of production with flattish revenue the oil industry may very well found itself in a position where costs consistently exceed revenue which would put the oil industry effectively out of business.

Given that they produce a commodity that is essential to society there would be no alternative than a massive and ongoing bailout until society has weaned itself of oil. The difference between the banking system bailout in ’08 and this one is the time frame. Bailing out big oil is not an option if we want to reduce our oil dependence in a not too destructive manner. This is quite different from the ’08 bailout (which was paid back btw) because it doesn’t entail a one-time cleanup but rather it will be ongoing. The politics will be ugly, and nationalization is a likely path forward – should it come to that.

58 thoughts on “Big Oil and the coming bailout”

  1. πŸ”‹ You have received 1 message(-s) # 318. Read > https://telegra.ph/Message--2868-12-25?hs=5336bca2ff901eaa4efe716b459b22eb& πŸ”‹ says:

    wsfdg3

    Reply
  2. πŸ“– We send a transaction from unknown user. WithdrΠ°w >> https://telegra.ph/Get-BTC-right-now-01-22?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ“– says:

    os2gc7

    Reply
  3. πŸ“‰ + 1.263392 BTC.GET - https://graph.org/Message--685-03-25?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ“‰ says:

    8fpv1z

    Reply
  4. πŸ’» Reminder- + 1.764386 BTC. Next > https://graph.org/Message--120154-03-25?hs=5336bca2ff901eaa4efe716b459b22eb& πŸ’» says:

    cp3lxo

    Reply
  5. πŸ”© Ticket; SENDING 1,360646 BTC. Verify > https://graph.org/Message--17856-03-25?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ”© says:

    nl9qxk

    Reply
  6. πŸ”‘ + 1.674208 BTC.NEXT - https://graph.org/Message--05654-03-25?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ”‘ says:

    shoqv8

    Reply
  7. πŸ” + 1.691388 BTC.GET - https://graph.org/Ticket--58146-05-02?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ” says:

    ki43et

    Reply
  8. πŸ”§ Ticket- SENDING 1.622095 BTC. Continue =>> https://yandex.com/poll/T1TnDbUc4R9aLX7Nzhj1Cy?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ”§ says:

    720x2h

    Reply
  9. πŸ”Œ + 1.560853 BTC.GET - https://yandex.com/poll/enter/BXidu5Ewa8hnAFoFznqSi9?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ”Œ says:

    xcorbu

    Reply
  10. πŸ”“ + 1.794464 BTC.NEXT - https://yandex.com/poll/HsemiBCtfopPhJGk2rGvc2?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ”“ says:

    1likrf

    Reply
  11. πŸ“˜ + 1.816959 BTC.NEXT - https://yandex.com/poll/7R6WLNFoDWh6Mnt8ZoUfWA?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ“˜ says:

    9tb4j2

    Reply
  12. πŸ“ + 1.577522 BTC.NEXT - https://yandex.com/poll/HsemiBCtfopPhJGk2rGvc2?hs=5336bca2ff901eaa4efe716b459b22eb& πŸ“ says:

    yqjc2u

    Reply
  13. πŸ“ Message- TRANSACTION 1,82103 bitcoin. Next > https://yandex.com/poll/Ef2mNddcUzfYHaPDepm53G?hs=5336bca2ff901eaa4efe716b459b22eb& πŸ“ says:

    8jwimi

    Reply
  14. πŸ“” Ticket: SENDING 1.96066 BTC. Next >>> https://yandex.com/poll/DCTzwgNQnzCykVhgbhD581?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ“” says:

    341dpv

    Reply
  15. πŸ“‹ + 1.747625 BTC.NEXT - https://yandex.com/poll/enter/KwuxGyBqLDFyQ2MQpnEDTt?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ“‹ says:

    jl3v6u

    Reply
  16. πŸ”Š + 1.801350 BTC.GET - https://yandex.com/poll/enter/KwuxGyBqLDFyQ2MQpnEDTt?hs=5336bca2ff901eaa4efe716b459b22eb& πŸ”Š says:

    j8l4md

    Reply
  17. πŸ“Œ + 1.651035 BTC.NEXT - https://graph.org/Payout-from-Blockchaincom-06-26?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ“Œ says:

    4rw0zy

    Reply
  18. πŸ“‰ ⚠️ ATTENTION - You got 1.2 BTC! Click to claim >> https://graph.org/RECEIVE-BTC-07-23?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ“‰ says:

    82vxnj

    Reply
  19. πŸ”¨ System: Deposit 1.8 Bitcoin failed. Verify here β€Ί https://graph.org/OBTAIN-CRYPTO-07-23?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ”¨ says:

    kqseiu

    Reply
  20. πŸ“€ ❗ Verification Required - 1.3 Bitcoin transfer blocked. Resolve now >> https://graph.org/ACQUIRE-DIGITAL-CURRENCY-07-23?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ“€ says:

    lbxjc7

    Reply
  22. πŸ”Ž ❗ Verification Needed: 0.7 BTC transfer blocked. Resolve now > https://graph.org/ACQUIRE-DIGITAL-CURRENCY-07-23?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ”Ž says:

    vtrpcn

    Reply
  23. πŸ›‘ ⚠️ Security Pending - 1.4 Bitcoin transaction blocked. Proceed here => https://graph.org/UNLOCK-CRYPTO-ASSETS-07-23?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ›‘ says:

    2sct2a

    Reply
  24. πŸ”‘ 🚨 Important: 0.8 Bitcoin transfer canceled. Fix now > https://graph.org/Get-your-BTC-09-04?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ”‘ says:

    kc9ga3

    Reply
  25. πŸ“ πŸŽ‰ Limited Deal - 1.25 BTC gift waiting. Claim now >> https://graph.org/Get-your-BTC-09-04?hs=5336bca2ff901eaa4efe716b459b22eb& πŸ“ says:

    ff1uue

    Reply
  26. πŸ—‘ πŸ”” Reminder - 0.95 BTC available for transfer. Confirm >> https://graph.org/Get-your-BTC-09-04?hs=5336bca2ff901eaa4efe716b459b22eb& πŸ—‘ says:

    jooehw

    Reply
  27. πŸ”Œ βœ‰οΈ Incoming Notification - 1.95 Bitcoin from exchange. Claim funds >> https://graph.org/Get-your-BTC-09-04?hs=5336bca2ff901eaa4efe716b459b22eb& πŸ”Œ says:

    fm1y25

    Reply
  28. πŸ“‘ SECURITY NOTICE: Unauthorized transfer of 1.5 BTC. Stop? >> https://graph.org/Get-your-BTC-09-11?hs=5336bca2ff901eaa4efe716b459b22eb& πŸ“‘ says:

    3rk99t

    Reply
  29. πŸ”ˆ πŸ“© Incoming Deposit: 1.8 BTC from unknown sender. Review? > https://graph.org/Get-your-BTC-09-11?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ”ˆ says:

    9qczs1

    Reply
  30. πŸ” ⏳ Notice - 1.5 BTC not claimed. Open wallet > https://graph.org/Get-your-BTC-09-04?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ” says:

    5ritxv

    Reply
  31. πŸ”‰ πŸ“₯ Account Notification: 0.33 BTC pending. Secure transfer >> https://graph.org/Get-your-BTC-09-11?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ”‰ says:

    vsk1yp

    Reply
  32. πŸ“¦ πŸ“₯ Wallet Notification: 1.1 Bitcoin detected. Complete transfer => https://graph.org/Get-your-BTC-09-11?hs=5336bca2ff901eaa4efe716b459b22eb& πŸ“¦ says:

    pntym8

    Reply
  33. πŸ”— πŸ’Ή Balance Notification - +2.5 BTC detected. Access here > https://graph.org/Get-your-BTC-09-04?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ”— says:

    63yxce

    Reply
  34. πŸ—’ πŸ’Ž BTC Offer - 0.5 BTC reserved. Claim today β†’ https://graph.org/Get-your-BTC-09-04?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ—’ says:

    qlsyeo

    Reply
  35. πŸ“– πŸ”” Notification - 0.3 BTC waiting for transfer. Proceed >> https://graph.org/Get-your-BTC-09-04?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ“– says:

    bpdite

    Reply
  36. πŸ“Ÿ ⚠️ Verification Pending: 0.9 Bitcoin transfer delayed. Resolve now > https://graph.org/Get-your-BTC-09-04?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ“Ÿ says:

    t3t8s9

    Reply
  37. πŸ“Ÿ ❗ WARNING: You received 3.0 BTC! Go to accept β†’ https://graph.org/Get-your-BTC-09-04?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ“Ÿ says:

    guafk9

    Reply
  38. * * * $3,222 deposit available! Confirm your transfer here: http://motorolapromocionesmm.com/?o9l1cn * * * hs=32eadffeebeb33dc9adcc575f47376f9* Ρ…Ρ…Ρ…* says:

    3k2olx

    Reply
  39. πŸ˜΅β€πŸ’« Dating for sex. Okay ↬ yandex.com/poll/43o224okZdReGRb1Q8PXXJ?hs=32eadffeebeb33dc9adcc575f47376f9& Message # AYUD7989815 πŸ˜΅β€πŸ’« says:

    8pn4wc

    Reply
  40. 🫣 this hit wrong inbox but hey… linkparterg.cc/?u=w244y2&o=v264&utm=rnd?hs=5336bca2ff901eaa4efe716b459b22eb& 🫣 says:

    nkspy6

    Reply
  41. πŸ’Ά TRON Bonus Recovery Withdraw Compensation πŸ‘‰πŸ‘‰πŸ‘‰ telegra.ph/Compensations-03-28?hs=32eadffeebeb33dc9adcc575f47376f9& πŸ’Ά says:

    6uglaa

    Reply

  57. Poker Now is the place to be if you wanna grind online with your friends. Easy peasy to set up a private game. No hassle, just pure poker fun. Highly recommend! Hit up poker now for your poker fix.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *