There are four Big Oil companies that massively dominate in the US.
The two of these that are US owned Corps are Exxon Mobil and Chevron. The two that are foreign owned companies are Royal Dutch Shell and BP.
Since the earnings level of these four Big Oil Corps was so monumentally high prior to 2010, it seems that there is no way that the percentage earnings growth on such an incredibly high base could be robust after 2009.
But guess what? The total earnings growth of these four Big Oil Corps has been truly exceptional since the start of 2010.
Let me lay out the Pretax Income numbers and percentage growth since the beginning of 2010.
In annual 2009, even after the start of the Great Recession and Job Depression, the total Pretax Income of these four Big Oil Corps was $99.4 bil.....yeah, that's an incredibly high earnings base.
But in annual 2010, the total Pretax Income (with BP's Gulf Oil Spill Charges excluded) of these four Big Oil Corps surged to $156.5 bil, up a massive 57% in just one year.
But it didn't stop there.
In the 1Q 2011, the Total Pretax Income growth of these four Big Oil Corps over the prior year's 1Q was 49%.
And in the 2Q 2011, this Total Pretax Income growth was 44%.
And then in the 3Q 2011, this Total Pretax Income growth shot up to 53%. Whew!
So what happened in the most recent 4Q 2011?
Well, believe it or not, there was a massive earnings growth deceleration, with 4Q 2011 earnings growth of these four Big Oil Corps plummeting to a meager 2%.
Let me break down these earnings percentage growth numbers by each of these four Big Oil Corps.
......................Pretax Income Percentage Growth over Prior Year
................................Annual.....1Q.......2Q.......3Q........4Q
.................................2010.....2011....2011....2011....2011
Exxon Mobil...............52%......57%....47%......45%......11%
Chevron.....................73%......65%.....71%....133%.......5%
Royal Dutch Shell.......68%......45%.....51%......94%......14%
BP(1)..........................44%......24%.......4%....(15)%....(27)%
Total all 4..................57%.....49%....44%.....53%.......2%
(1) BP Pretax Income excludes Gulf of Mexico Oil Spill Charges and Credits.
I think what happened here with this massive earnings growth deceleration in the 4Q 2011 by these four Big Oil Corps, after seven straight quarters of earnings growth over the prior year's quarter of roughly 50% each, is the single best economic development for sustainable full-time US job creation, at a fair wage, and US small business development, along with that around the world, in over a decade.
What happened in the Bush/Cheney Presidential years was a massive transfer of wealth from the pocketbooks of US citizens due to unreasonably high gas prices, and from Non-Oil US businesses, due to these high energy costs, to these four Big Oil Corps as windfall pretax profits. And the US Government piled on by giving these four Big Oil Corps substantial tax subsidies, which turned these windfall pretax profits into truly obscene after-tax profits.
High energy costs put severe economic strain on consumers, and also substantial downward pressure on consumer confidence. But high energy costs also keep potential entrepreneurs from starting a business. And they also keep small business owners and medium-sized businesses from expanding their businesses.....not just due to the high energy costs, but also due to the risk that they will continue to vastly grow unabatedly on end.
Further, somewhat under the radar screen, high energy costs have been one of the main causes of the massive US Corp outsourcing trend. CEOs and CFOs of US Big Corps are driven by worldwide after-tax profits. With the severe and continuing energy cost pressure, in order to still get their desired after-tax profit goal, these CEOs and CFOs of US Big Corps take advantage of the lower labor environment and the lower income tax in foreign tax havens. They call it "managing their worldwide after-tax earnings". After all, these CEOs and CFOs work for their stockholders, and worldwide after-tax earnings drive stock prices.
When the US Government cannot stop the continuing windfall profits of US Big Oil, due to all Republicans in the US Congress, and even a handful of Democrats, protecting the awesomely powerful Big Oil Industry, then the 99% all around the world must take it in their own hands at the gas pump and boycott, as best they can, the clearly dominating Exxon Mobil, Chevron, Shell and BP.
When you are cruising down the Interstate in the US or in highways around the world, and in need of a gas fix, it is so easy to spot the highly visible Exxon, Chevron, BP and Shell signs. And it is usually much more convenient to just pull into the huge Exxon, Chevron, BP or Shell gas stations, after all, their immense wealth permits them to have accumulated all the choice real estate gas fill-up locations.
But for the US economy and US job creation's sake, and also for that of the world, it is usually much wiser to go the inconvenient route and avoid Exxon, Chevron, BP and Shell. The only way this dormant economy is going to turn around in the long run on a sustainable basis is for the 99%, including small businesses, to take charge and act on their own to remove the massive windfall profits from the income statements of the dominant ExxonMobil, Chevron, BP and Shell Big Oil Titans.
Below here are the 4Q 2011 Pretax Earnings, along with a comparison to the prior year’s 4Q 2010 amounts, of the 33 US Big Oil Corps and Partnerships, with Pretax Income (PTI) or Pretax Loss (PTL) of more than $100 mil in either the 4Q 2011 or the 4Q 2010, and which have already released their 4Q 2011 earnings through February 7, 2012. I’ve included Royal Dutch Shell and BP, since they have such substantial US operations.
........................................PTI(L).......PTI(L)..........Increase.....
..........................................4Q.............4Q............(Decrease)....
........................................2011.........2010......Amount.......%..
............................................(millions of dollars)
4 Big Oil That Should Be Boycotted
Exxon Mobil..................17,041......15,327........1,714.......11%
Royal Dutch Shell..........11,805.......11,261...........544.........5%
Chevron..........................9,965........8,766........1,199.......14%
BP(1)..............................7,023........9,599......(2,576).....-27%
Total of all 4..................45,834......44,953...........881........2%
Rest of Big Oil Through Feb 7, 2012
ConocoPhillips................5,833.......4,292.........1,541......36%
Occidental Petroleum......2,590.......1,810..........780.......43%
Schlumberger..................1,886.......1,335..........551........41%
Halliburton......................1,354.........910..........444........49%
Marathon Oil....................1,218.........841..........377........45%
Anadarko Petroleum(2)...1,054.........289..........765.....265%
National Oilwell Varco........843.........623..........220.......35%
Baker Hughes(3).................784.........520..........264.......51%
Enterprise Productss LP.....727.........295..........432.....146%
KinderMorganEnergy LP.....491.........419...........72........17%
Murphy Oil(4).....................469.........286..........183........64%
Spectra Energy...................425.........493..........(68)......-14%
Kinder Morgan Inc.............397.........364...........33.........9%
Hess(5)..............................327.........357..........(30).......-8%
Cameron Intl(6).................234.........215............19.........9%
Helmerich & Payne.............228.........167...........61........37%
Diamond Offshore..............204.........311.........(107)......-34%
Pioneer Natural Res(7)......163..........(18).........181......1006%
Noble Corp........................150.........115............35........30%
EQT....................................141.........113............28........25%
Patterson UTI....................140...........92...........48........52%
Sunoco Logistics LP(8)......128...........64............64.......100%
RPC...................................122...........90............32........36%
CompleteProductionSvcs..122...........54............68.......126%
Magellan Midstream LP.....111...........57............54........95%
Atmos Energy...................107.........116............(9).......-8%
Valero Energy....................93.........334.........(241)......-72%
Marathon Petroleum.......(180)........361.........(541).....-150%
Tesoro............................(191)..........13.........(204)....-1569%
Total 29 Rest of Big Oil..19,970....14,918.......5,052.......34%
(1) BP 2011 PTI excludes Gulf of Mexico Oil Spill Response Credit. Its 2010 PTI excludes Gulf of Mexico Oil Spill Response Charge.
(2) Anadarko Petroleum 2011 PTI excludes Asset Impairment Charge.
(3) Baker Hughes 2011 PTI excludes Trade Name Impairment Charge.
(4) Murphy Oil 2011 PTI excludes Republic of Congo Property Impairment Charge.
(5) Hess 2011 PTI excludes Loss on Refinery Shutdown.
(6) Cameron International 2011 PTI excludes Deepwater Horizon Charge.
(7) Pioneer Natural Resources 2011 PTI excludes Oil and Gas Properties Impairment Charge.
(8) Sunoco Logistics LP 2011 PTI excludes Asset Impairment Charge.
It is really good for the US and world economies to see so many Oil Corps other than the Big 4 perform so well in the 4Q 2011. These 29 Oil Corps had their 4Q 2011 earnings increase by 34%, as compared with the huge Big 4 Oil Corps that dominate, whose 4Q 2011 total earnings were up only by 2%.
It's particularly good for the US economy to see ConocoPhillips, which is going the patriotic route by breaking up its businesses, do so well, and unlike the Big 4 Oil Corps, actually saw its earnings growth tick up to 36% in the 4Q 2011, as compared with its 34% earnings growth in the 3Q 2011.
And it's also good to see Occidental Petroleum register 4Q 2011 earnings growth of 43%, also an uptick from its 3Q 2011 earnings growth of 41%. In 2010, Occidental Petroleum patriotically added 600 jobs.
It's also good for the US economy and US job creation, as well as that of the world, to see Oil-Related Giant Schlumberger continue to do so well. This is basically a best-of-breed technology company. And it is hiring the very best and brightest from the top engineering, science and math programs of universities all across the country.
Marathon also went the patriotic route and broke itself up into two parts. It seems fair to me that the 99% should reward them for an action like this.....and so should the US Government, which should be encouraging breakups, which nearly always result, in the long run, in very nice full-time job growth.
