Christophe de Margerie, chief executive officer of France’s global integrated oil company Total SA (TOT, quote), has emerged as one of the highest-profile supporters for the peak oil school of thought, which contends the world will eventually run out of economically extractable petroleum.
Big Oil companies like Total seem to have strapped on their “exploration mojo” as The Wall Street Journal termed it recently, with Eni (E, quote) announcing a major find off Madagascar and YPF Repsol (YPF, quote) striking big shale oil in Argentina.
But the mother of all oil companies has its sights on what could become a huge play. ExxonMobil (XOM, quote) recently signed an agreement with Kurdistan, where there is an estimated 45 billion barrels of oil and up to 200,000 billion cubic feet of gas.
As JR Ewing once said to his sibling and partner in Ewing Oil, Bobbie, about the potential for exhausting the supply of crude, “The world’s been running out of oil since the first barrel was pumped, little brother!”
ExxonMobil’s CEO has testified to Congress that he does not believe oil should trade above $60 to $70 a barrel.
With West Intermediate crude topping $110 per barrel once again, it looks like demand for petroleum is not going over a cliff any time soon.
If so, that end of the fundamental supply/demand equation seems to be arguing against Exxon here.
But maybe Exxon knows more about the long-term supply outlook than its somewhat smaller rivals.
TOT may simply be having more trouble getting the deals, and so it is closer to “peak” than its gigantic U.S. counterpart.