As share prices of major oil companies crash in line with the broader stock markets, Exxon Oil which survived the pressure seems set to acquire Shell. With crude prices crashing, many oil firms are in deep debt and stuck with expensive projects. It's for this reason that Exxon Mobil could most likely become the worlds biggest Oil Company, when it starts acquiring the heavily indebted companies including Shell.
Shell is down 35 % in the last 6 months while Chevron and BP are about 30% down. Shares in many other oil firms that rushed to expand over the last few years are down even more.
Exxon Mobil stands at just 10 % lose. Oil company analysts at investment bank Johnson Rice & Co say due to record oil prices over the last few years and a cautious investment strategy that drew fire from critics, Exxon has close to $40 billion in cash reserves. It has another $225 billion in repurchased stock tucked away. Over the last five years, oil companies worldwide rushed to develop new projects to take advantage of oil's rising prices, often paying exorbitant sums for leases, drilling rigs and other assets needed to bring crude to market. Exxon never rushed into these acquisitions saying the price rises were temporary.
Investor gala set for Jan 16
The Investor of the Year Awards 2008 gala is due at Hotel Africana Jan 16. Twenty four companies were nominated with 8 in the large scale category, 9 in medium scale while 7 are in small scale.
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