So how exactly are we supposed to make any money at all when oil futures are NEGATIVE FOR MAY????
What does COP do in this situation???
5 replies (most recent on top)
I retired from Chevron, years ago. Toward the end of my career, I had the dubious honor of being sent to a Phillips chemical plant, for the specific purpose of "bringing their budgeting and reporting into the current century". Am NOT trying to p#ss anyone off, here,... just saying how it was layed out, for me. No amount of forewarning, however, could ever have prepared me for what I ran into. Pure, bone chilling stubborness and (no other way to say it,...), stupidity. The head bean-counter at the plant was an accounting professor, at night, and was of the opinion that NO ONE but he could see cost data, etc. Toward that end, he simply did not distribute any data, and so, anyone wishing to get a grip on where their unit stood, with respect to annual operating or capital budget, had to go to (let's just call him "Jim"), so HE could tell them. And,... that's ALL Jim could/would tell them,... no details, no insight, no idea, therefore as to what could be done to "right the ship". The Plant Manager never knew if he was "really" under, on, or over budget,... he had no CLUE (the data, itself, was rarely correct). Engineers, operators, and the Plant Manager, all, were just "flying, blind"! I was so aghast at Jim's approach, and so furious at what I went through to change it, that, even years after the fact I will involuntarily flinch, when "Phillips" is mentioned. I'm sure Jim was an anomaly in the Phillips organization, (or not),... just had the urge to bring ol' Jim's name up,... 'cuz,... he, and likely, others like him, did Phillips no good. No good, at all.
COP hasn't led by example is quite some time. If evaluating and presenting over and over again until the project is no longer viable is an example, then yes, very good at that. They also created the "Conspiracy of no Responsibility" work method which means no one will make a decision, things will get pushed back, maybe eventually happen, and when they don't work out or don't work out as well, no one remembers who decided to do it, so no one gets in trouble in management and the workers get hung out to go explain to upper management what happened without any of their direct supervisors support (been there done that). And EagleFord wasn't even purchased for oil play, it was purchased for gas....COP got lucky that it was oily in their acreage. So if being lucky instead of smart is an example, then yes, pretty good at that.
How long and hard did you need to think about this? I have some land in Bartlesville you may be interested in.
COP will do exactly what all other oil companies should do and that is curtail production. Will the curtailment be enough? Probably not, but at least we’re taking a stand and leading the industry by example. It’s simply more valuable to defer production under these circumstances. Heck, even if we wanted to produce as normal, there’s not enough demand right now. Simple economics here really, that is companies won’t make any money in the near term. So better hunker down and ride it out to the best of our ability. At least we have the ability to do that for a while, some companies don’t have this luxury...
I had to think about this long and hard. When oil is negative, no money will be made. Rather, money will be forfeited.
COP in this situation lives its SPIRIT Values