The price of crude oil is getting cheaper, and some of the largest oil companies out there are actually considering the idea of shrinking a bit. The largest of the companies, Chevron, Royal Dutch Shell, and Mobil are no longer thinking about expanding, at least not in the short term. As the prices for oil drop, the price that many companies are paying to actually extract that oil are on the rise, and this is eating into their profits.
Each of the large companies are making less than they did a decade ago, even though the price of oil is higher than it was back then. Exxon is at a five-year low, and BP has had to sell assets due to legal bills and cleanup costs.
These companies need to start looking for ways to reduce the costs of getting that oil and gas from the ground, and one of the ways that they are considering doing that is by looking into better and newer technologies for obtaining that gas and oil. Through better equipment and technology on their side, oil companies will be able to continue their oil and gas production at lower costs that will allow them to have a higher profit.
The addition of better equipment can make a world of difference to any gas and oil company, large or small. It helps to increase the levels of efficiency, as well as the levels of safety associated with the operation. Each of the companies does plan to return to a higher output in the next few years, with both Chevron and Exxon saying that they plan to have their output boosted again by 2017 at the latest.
Many small companies, such as those in the United States that have their focus on shale, have actually been doing better recently, mainly due to the fact that they have to spend less on the extraction process.
While these lower prices at the pump are great for consumers, it does still present a significant concern for all of these companies. More and more of the oil companies today, large and small, realize that they need to do more to invest in themselves and their technologies if they want to be able to remain economically viable. Through investing in these technologies, it can help to make the extraction cheaper and easier overall, allowing those companies to improve their profits.
However, as the price of oil never really remains stagnant for too long, things might change – some experts are already predicting record high prices in the next year or so.
Oil Works, Inc. is a complete drilling rig equipment manufacturer and service provider based in the Permian Basin for over 20 years. OWI’s product and service offerings include Derricks, Substructures, Drawworks, Mud Systems, Walking Systems, Power Generation, Control Systems, Iron Roughneck Repair and Upgrades and complete Rig Solutions built to API and ISO standards. OWI is also proud to offer 24/7 Service and Support.