|
You might be right about that. Shell operates differently than most domestic oil companies. I worked for them from 1990-1992, and the corporation is very much run with an iron fist from The Netherlands and what they say/do is not always indicative of what other companies are going to do. The vast majority of oil companies that produce in this country don't own refineries and have no control over that end of the game. Only the big boys (Exxon, Shell, Chevron-Texaco, etc.) have refineries. I'm pretty much limited on my information regarding their economics, so I'm actually not surprised by what you are saying.
Also, regarding the oil companies reserving rights to the reserves. This doesn't sound right to me. Most oil fields are not located next to refineries. Some oil fields are lucky enough to have pipelines next to them that ship the oil sometimes hundreds of miles to refineries. In many of the places I worked, the oil was actually picked up by tanker and taken to a pipeline facility where it was then shipped. It is very rare for an oil company to own mineral rights to oil. They instead lease the rights from the true owner (usually a private landowner or the federal/state government). The lease typically has a cessation clause that basically means that once production stops, the rights to produce that oil is lost and instead reverts to the real owner. All leases are different, but I can't imagine any landowner granting an oil company a lease in perpetuity. The only way for the landowner to derive revenue from produced oil or gas is for it to be produced and sold on the market. If the oil company was allowed to sit on it indefinitely, then the landowner would lose the use of their own minerals. I was involved in a case in the early 1990s where my company sued some of the major oil companies in southwest Kansas because the leases they had from the 1930-1950s basically gave them the right to not drill for deeper production underneath the shallow gas production they had going. They actually won the case (although it was close), but it was so close that they started giving us concessions to allow us to drill for oil underneath the shallow production.
I'm basically saying that the oil economy is so diverse and widespread with so many different players involved that without a very large group working together there is no way for prices to be affected for a long period of time. OPEC is an obvious exception. The companies in the US don't even supply enough for our own needs so saying we have the ability to adversely affect prices is ridiculous considering that we have a hard time just working together on small things.
|