Quote:
Originally Posted by Frequitude
The write down was pretty much just a mandatory accounting exercise due to the strip price of oil. You should know that. It hardly has anything to do with Exxon's perception of Kearl's viability. If the price of oil rises they will just write it back up.
This has more to do with high cost oil than specifically the Oil Sands. Right in line with Shell selling off all their arctic stuff. They see the future in gas and not oil.
It's probably more of a bad thing because it just further solidifies Shell's belief that the future is gas and not oil. Given how heavily favored we are towards the oil sands now, that would be bad. At least we still have a bunch of gas though.
I think that's a short term view. Shell's thinking 50 years out here, not timing 10-year cycles right. They're betting the future is gas. I'm inclined to believe them.
edit: So ya, I pretty much just said the same thing three times. Poorly structured post...
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Yeah, I'm well aware that it was an accounting exercise, but thanks for the condescension. The thing is that write-down is based on the profitability of the reserves, and frankly I doubt any company is eager to drop 14% of their value and that kind of magnitude. And yeah, they can just write it up again when prices rise, but even so its not exactly good news. I don't think the end is near for oilsands projects, but when super majors are taking these actions its not completely irrelevant either.