Global oil companies are making profits in billions

Kamil Abdallah al-Harmi
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Over the second quarter of the current year, oil companies made profits and cash flaws worth $5 to $8 billion each, which is the highest revenue for some giant oil companies. However, they do not wish to proceed with the industry of fossil fuel of oil and gas, or to invest in it, although it comprises the core of these companies.

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In spite of these huge profits and cash flaws, these companies are facing some kind of a reversal by their owners and shareholders who are calling for abandoning the oil industry and heading to alternative sources of energy. This is expected to cause a shortage in oil and gas supplies later if it is not causing it already.

The giant ExxonMobil made a profit of some $7 billion, followed by US Saffron with $6 billion which simultaneously, though, reduced its investments in the oil sector by 22 percent. Nowadays there is a tendency to distribute the profits to the owners and shareholders, buy their shares, and to quit the oil investments altogether and leave it to the people in charge of oil-producing countries and their national companies. This means leaving the responsibility of oil and gas production solely to the countries of OPEC Plus, which will have to invest in new oil excavations to add to their daily and yearly reserve of oil and gas, in order to be able to afford the operations and supply the increasing demand on oil in the forthcoming years.

It is not an easy task to quickly find the required alternatives, as it might take years to achieve. While the giant oil companies are still reluctant, the pressure exerted by their shareholders might eventually lead to a shortage in supplies and a tremendous surge in energy prices, as is happening today with the gas market due to Russia’s refraining from providing Europe with the needed gas amounts, and Germany’s refusal to approve the new gas line that stretches from Russia to Europe without passing through Ukraine.

Eventually, Germany is expected to accept Russia’s conditions, which will reduce the gas price for consumers.

It is not easy to find alternatives for fossil energy sources, and it will take a long and difficult time to find them, let alone that it will be also costly. The governments might eventually be the source of solution with their capability to innovate natural alternatives such as solar and wind energy. The start might focus on the reduction of the use of coal, which is the most dangerous source of pollution, particularly in China, which is required to cut down on its polluting gas emissions that directly affect the global environment.

The easiest alternative for the time being is to resort to atomic energy for electricity production, and to build nuclear reactors in preparation for any energy scarcity in Europe.

Britain and France are already going in that direction and intending to construct additional reactors or increase the productivity of already existing ones, to provide for other European countries as well.

The key question posed to the oil-producing and exporting countries is whether they will proceed with their investments in the oil and gas sector, and at what rate or range, while giant global oil companies are moving away from that kind of investment? Will these countries opt for sharing their oil fields, as the Arabian Gulf countries are doing?

This article was originally published in, and translated from, Kuwaiti outlet Alrai.

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