Economy 53,076 Posted August 25, 2015 Share Posted August 25, 2015 http://www.fool.ca/2015/05/11/2-big-ways-suncor-energy-inc-is-capitalizing-on-low-oil-prices/http://business.financialpost.com/news/energy/warren-buffetts-berkshire-hathaway-drops-us3-7-billion-exxon-mobil-investment-amid-global-oil-rout Suncor Energy is by far Canada's largest oil/energy company and also by far the most efficient one. The have managed to increase productivity and efficiency so much that while Canadas oil sands on average cost $60 to $70 a barrel to produce, they have been producing at an average cost of $28/barrel and as low as $14/barrel in specific projects new in-situ technologies were experimented with Despite a 60% collapse in oil prices the company expects profits as large as last years (also helped by their refining portion of the business). They hope if oil prices stay low some other Canadian companies will go bankrupt and they can monopolize the market cheaply Link to post Share on other sites More sharing options...
Miker 5,683 Posted August 25, 2015 Share Posted August 25, 2015 Bigger companies will survive in different ways. They can wait for competition to go bankrupt or they buy their competition and then downsize their personnel. They have been doing that forever. Mars..........or bust! Link to post Share on other sites More sharing options...
Economy 53,076 Posted August 25, 2015 Author Share Posted August 25, 2015 Bigger companies will survive in different ways. They can wait for competition to go bankrupt or they buy their competition and then downsize their personnel. They have been doing that forever.bigger companies have bigger cash reserves and less debt usually... in the case of oil companies larger companies also tend to have refining operations as well (which are highly profitable right now since refined products havent fallen as much as oil itself) which can make up operation losses in the case of operation costs itself, Suncor is one of the few (if not the only) Canadian Company to be producing at a profit right now... at lest of the ones in oil sands (the costliest to produce) The acquisition market can be gold for them in some time if prices remain depressed Link to post Share on other sites More sharing options...
Miker 5,683 Posted August 25, 2015 Share Posted August 25, 2015 bigger companies have bigger cash reserves and less debt usually... in the case of oil companies larger companies also tend to have refining operations as well (which are highly profitable right now since refined products havent fallen as much as oil itself) which can mae up operation losses in the case of operation costs itself, Suncor is one of the few (if not the only) Canadian Company to be producing at a profit right now... at lest of the ones in oil sands (the costliest to produce) The acquisition market can be gold for them in some time if prices remain depressedSuncor will still have to process the oil so if there is any profit to be made it will be lost elsewhere in their organization. Also they will likely have to reduce operations somewhere to balance the bottom line. Mars..........or bust! Link to post Share on other sites More sharing options...
Economy 53,076 Posted August 25, 2015 Author Share Posted August 25, 2015 Suncor will still have to process the oil so if there is any profit to be made it will be lost elsewhere in their organization. Also they will likely have to reduce operations somewhere to balance the bottom line. what do u mean? do u mean like restructure operations of companies they bvuy that are less efficient? Link to post Share on other sites More sharing options...
Miker 5,683 Posted August 25, 2015 Share Posted August 25, 2015 what do u mean? do u mean like restructure operations of companies they bvuy that are less efficient?There will be part of their operations that will cost them an arm and a leg in comparison to the price of the oil. If it is done in Canada the labor costs will be much higher making it more competitive to bolster their operations in other countries where the labor is cheaper. Mars..........or bust! Link to post Share on other sites More sharing options...
Economy 53,076 Posted August 25, 2015 Author Share Posted August 25, 2015 There will be part of their operations that will cost them an arm and a leg in comparison to the price of the oil. If it is done in Canada the labor costs will be much higher making it more competitive to bolster their operations in other countries where the labor is cheaper.oh that... thats easier said than done tho... Most Countries that allow private investment dont have any meaningful reserves and their output is in decline And many Countries who do allow private investment in oil besides being in decline are also rich Countries anyway so labor will still be expensive. They might as well invest in Canadas u talped shale reaerves which are now cheaper than oil sands generally. If they can e kings of efficiency in shale as well they can compete hard they do have the resources, big balance sheet, low debt and they are still running profits But they are spending a lot in the forhls project which wont be done before 2017 earliest. Its a huge area thats suppostu yield oil for some 50 years. I doubt with low oil prices and already so money devoted to a big project that they are gonna get involved in anymore atm Link to post Share on other sites More sharing options...
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