Saturday, July 12, 2008

Incentives Work-For Oil Companies Too!-2

"In the latest sign that high prices are driving oil producers to wring every drop from aging fields, Occidental Petroleum Corp. said it will spend $1.1 billion to expand production in Texas' Permian Basin, one of the country's oldest oil-producing regions. Occidental said Monday that it expects to produce an additional 50,000 barrels of oil per day in West Texas within the next five years, a 25% increase over its current production there. ... The increased production will be possible, the company said, because it is joining with natural-gas producer SandRidge Energy Inc. to build a plant that will separate carbon dioxide from natural gas. ... Experts said the deal is the latest example of companies pursuing projects that wouldn't have made sense when petroleum prices were lower. ... Jim Byrne, an analyst with BMO Capital Markets in Calgary ... said Monday's deal probably makes sense for Occidental only if prices stay above $80 per barrel", WSJ, 1 July 2008.

Congress need do nothing to "stimulate" domestic oil production.

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