Lost in the beatdown of investment bankers is news from the oil patch, and yet another reason to be glad you’re not living in big, bad ol’ Russia: You’d spit up your morning vodka in outrage if you read the news that Russia’s big oil companies are begging their government for bailouts. (See Kommersant‘s “Russia’s Oil and Gas Giants Seek Govt Support.”)
Hey, we’ve got it all over those ex-Commies. Our oil companies are sitting on piles of cash.
See the Wall Street Journal‘s “Market Slide Puts a Spotlight on Big Oil’s Cash Hoard,” which notes:
The companies maintain brawny balance sheets, thanks to months of $100-plus oil prices, have ample cash and are seen as good credit risks. Moreover, their investments have been made based on much lower oil price assumptions. Unlike many smaller energy companies, they aren’t compelled to shed assets or cut their capital budgets to manage their cash. . . .
Compared with many blue chips, Exxon, Chevron and other oil majors are cash-rich. Exxon has $39 billion in cash and has been buying back shares at an $8 billion-a-quarter clip. The value of the stock it has repurchased is about $218 billion, a shade less than the current value of General Electric Co.
Russell Gold‘s story points out that, yes, crude-oil prices have dropped and oil goliaths’ share prices have dropped but that, yes, the industry has posted record profits the past couple of years.
We’re not hearing much about Big Awl these days, which is all the more reason to step back from kicking those investment bankers in the ribs and read Gold’s piece, which concludes:
This article from the Village Voice Archive was posted on October 8, 2008