Quote:
Originally Posted by mpahlca
did you read what it actually comes from? writing down certain assets, re assessing values of existing assets, not operating losses. So in other words they jacked the value of assets while the share price was on the way up, and are now dumping the share value to buy low.
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Right. They had to write down the value of their assets. Those asset price changes are real in that they are oil and gas - which are now worth considerably less than they were. Directly in that the value of the natural gas purchased in the Burlington deal is now worth less than it was and indirectly in that their 20% ownership of Lukoil is now worth less; which is partly attributable to the fall in energy prices. And ok, give some credit to the Russian stock market and equities in general there too.
The conspiracy theories out there would have led you to believe companies like Conoco, Exxon and BP were able to push prices up over $140/barrel in order to create the profits of the past few years.
The truth is those companies reserves are dwarved by the size of the big nationals; Saudi Aramco, National Iranian, Qatar General Petro, Kuwait Petro and so on.
Even in that case there was so much speculative money in futures it is not clear to what degree even they can control prices. Though certainly a lot more Exxon, BP and Conoco can.