Disappointing 1H Douses Hope for ‘07 Big Oil Output Gains

Halfway through the year, hopes for 2007 output growth from the major energy companies have been extinguished.

This year is forecast to be the latest in a long string of disappointments, as governments tighten their grip on hydrocarbons resources and rising costs make it increasingly difficult to shore up oil and gas production in mature, declining fields around the world.


Over the past four years, surging energy prices contributed to quarter after quarter of record profits for the large integrated energy companies, overriding investor concerns about weakening output. The worry: Big Oil is experiencing difficulties in tapping resources amid political upheaval and more stringent contract terms from key producers. Now that crude-oil and natural-gas prices have stabilized, prospects for profit growth have dimmed, and attention has refocused on production.

“These companies continue to disappoint in terms of value growth, particularly for oil,” said Rod Oster, an analyst at A.G. Edwards in St. Louis, Mo. “The industry worldwide is having difficulty growing production.”

Dow Jones Newswires