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Offshore Oil Spills July 22, 2010

Posted by hslu in Economics, Energy, Global Affair.
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ExxonMobil, Chevron, ConocoPhillips and Shell are  setting up a non-profit company called Marine Well Containment Company to come up with a rapid-response system to handle offshore oil spill. It will take 6 months for a team of engineers from each of the four companies to develop a solution to contain future underwater blowout in GM and elsewhere in the world.

The system can be mobilized within 24 hours of the blowout to contain oil spills in water as deep as 10,000 feet and capture up to 100,000 barrels of oil a day.

Each company will put in $250 million and I am sure service companies will be involved.

Over the years, the U.S. oil companies have faced tremendous competition for development leases in foreign countries. They have to survive in the era of wide swings of crude oil prices, Congress’s attack and unfair (windfall profit) taxes, hatred from American public and unfair advantage of National Oil Companies: Saudi Arabia, Iraq, Iran, Chinese, Russian, Kuwait, Venezuela, Indonesia and many others.

One thing that has helped them to survive all these years was the advancement of petroleum technologies in every discipline: geophysics, drilling, production and reservoir engineering; because if it wasn’t for the advancement of technologies, these public traded companies would have ceased to exist.

The easy fruit in the world has already been picked. Now these companies have to go out deep in the ocean and search in the most remote areas of the world to find projects that are worth developing. Without new technologies, development and production costs will be too high and they will not be able to compete with National Oil Companies in the open market.

I have no doubt that American oil companies will overcome this hurdle too.

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