Oil majors urged to pump profits into investment

Washington, April 29:

US president George W Bush called on the oil majors to pump their multi-billion-dollar profits back into new investment to help bring down petrol prices.

Bush said he opposed a push by some US senators, both Republican and Democrat, to slap a windfall tax on the profits.

“The answer is for there to be strong re-investment to make this country more secure from an energy perspective,” he said, “My attitude is that the oil companies need to be mindful that the American people expect them to re-invest their cash flows in such a way that it enhances our energy security.”

“That means pipeline construction for natural gas deliveries. That means expansion of refineries. That means exploration in environmentally friendly ways. It also means investment in renewable sources of energy.” Opinion polls say that voters are growing increasingly angry at the Bush administration as petrol prices soar above three dollars a gallon, reflecting a record rally by crude prices.

Their anger has been stoked this week as the big oil companies have reported an earnings bonanza. ExxonMobil announced a first-quarter profit of $8.4 billion, while Chevron reported earnings of four billion dollars.

Bush this week ordered a federal investigation into the record-high fuel prices to see if there is any truth to allegations of profiteering by the oil majors.

Among several measures to help slow the rapid rise in petrol prices, he also said that new government deposits into the US strategic oil reserve would be suspended in a bid to boost supplies to the market.

“I have no evidence that there’s any rip-off taking place, but it’s the role of the Federal Trade Commission to assure me that my inclination and instinct is right,” Bush said during his Rose Garden appearance.

He added, “And the American people have to understand that we are living in a global economy and so, when China and India demand more oil, it affects the price of gasoline at the pump, “And, therefore, it’s important for us to diversify away from oil.”