Big Oil likely to be leaner

The party’s over for Big Oil.

That may not be immediately evident as the world’s largest publicly traded oil majors reveal their annual 2008 profits in the coming days. Crude’s wild ascent into triple digits for most of last year paves the way for yet another string of record annual earnings.

But oil’s swift fall in late 2008 paints a starkly different picture for those last three months and possibly well into 2010, depending on when economic recovery begins eclipsing the worst recession in decades.
“The air has gone out of the tires, the wind’s gone out of the sails,” said John Olson, an analyst with Sanders Morris Harris in Houston.

ConocoPhillips will lead off earnings announcements on Wednesday, followed by Royal Dutch Shell, Exxon Mobil Corp. and Chevron Corp. BP, Marathon Oil Corp. and the largest independents will report in early February.

Unlike its peers, ConocoPhillips already alerted investors to its plan to slim down in response to lower oil and natural gas prices, including impending layoffs, asset value write-downs, shrunken capital spending and a significant hit on reserves.

Houston Chronicle