Rex Tillerson

Back in September I approvingly quoted Rex Tillerson, Chairman and CEO of ExxonMobil.

High oil prices and perceptions of soaring industry profits have prompted many producing countries to give national oil companies more power to extract richer fiscal terms and greater control over resources, pushing out international players, Rex Tillerson, chief executive of US supermajor ExxonMobil, said.

Such policies will lead to tighter oil supplies as ExxonMobil and other majors stop deploying their technology, know-how and capital in some of those countries, he said.

“If there’s no room to share it then there is no role for us – it’s a simple as that,” he told business and political leaders at a meeting in Calgary, Reuters reported.

And I will do so again:

ExxonMobil boss Rex Tillerson, speaking in the wake of last week’s dire warnings from the International Energy Agency about unsustainable growth in energy use, sought to warn of the dangers of resource nationalism.

Talking about oil supply tightness, Tillerson told reporters during this week’s World Energy Congress in Rome that: “It’s not a resource problem. The world has plenty of oil.”

Instead, “it is an issue of whether or not the investment dollars, technology and the know-how to develop those resources in an efficient and reliable way…is going to be brought to bear on those resources”, he argued.

Tillerson talked about such nationalism as being counter-productive for the resource-rich countries where the people miss out on revenues and opportunities.

Amongst all the talk about peak oil, increased energy demand, dwindling hydrocarbon reserves, and dependence on unstable regimes which appear daily on the TV, radio, and in the international press, the opinions of Rex Tillerson do not enjoy any special prominence over those of journalists, minor politicians, environmental activists, and layman commentators.  Yet insofar as he is able to describe in a few brief sentences the exact problem faced by the world’s energy consumers, there are few who deserve to be listened to more keenly on the subject.

I have a feeling that Rex Tillerson’s speeches will be treated kindly by historians as they dig through the archaeology of the Oil Age.  By contrast, the most vociferous of contemporary commentators, which includes most politicians and the international media, will likely be noted for having held opinions and voiced expectations that were not flattered by events.

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5 Responses to Rex Tillerson

  1. Pingback: Robert Amsterdam

  2. Kolya says:

    Tim,

    Although you are probably not an expert on the “peak oil” issue, you know more about it that most of us. What’s your best guesstimate? Is the world within the next twenty years facing an unprecedented energy crisis because of our dependence on oil? Or do you think there is enough time (and political will) to wean ourselves out of our reliance on oil? Or do you think that there is no need to worry, because there is enough oil for the next several decades–enough time for us to calmly develop new technologies that will satisfy the world’s future energy needs?

  3. Grant says:

    Consequences of National Oil Company Dominance.
    The problem with national oil companies is that they are not explorationalists. It would be hard to imagine geologists in National Oil Companies looking beyond the their own national boundaries, not necessarily because of a lack of knowledge but because it would need to be politically sponsored State Oil Companies to date have not managed to do this to the same extent as the big international companies that are economically driven to explore for reserves. The limited success of some State companies (CNPC/Sudan) in Africa has been isolated to a few countries and then largely for their own domestic markets.
    The Success of International Companies is that they promote exploration geologists to work across borders and often out of their own comfort zones to capitalise on the risks required to find reserves for the future. Im not sure that domestic companies are capable of doing this and that is the frightening part as the international companies are going to be restricted to fewer areas of opportunity in the future.

  4. Tim Newman says:

    That’s an excellent point Grant, one I’ve not thought of before or seen covered elsewhere.

  5. Glenn says:

    I’ve got memories of studying this kind of thing at school 20 years ago – energy crisis blah blah; world shortage, etc etc etc.

    Newspapers, politicians and people in general just like doomsayers and to say the end of the world is nigh. It makes them feel self important, or maybe there its the type of collective gloom which makes people like me like The Smiths.

    Resource nationalism is rife in Russia, Venezuela – but how much do they use their oil and gas revenues to invest in developing their own global companies with enough expertise to explore and develop oil reserves profitably? jack shit I’d imagine.

    The reaction to peaking prices – it brings previously more marginal reserves into play. Look at cornish tin mining. And Alberta tar sands. Next we’ll see coalfields opening up again in the UK. A lot through international corporate investment – which also conveniently avoids the unstable regimes in the likes of Russia too.

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