World oil giants face serious problems

Baku. 17 October. REPORT.AZ/ Balances of world's largest oil companies continue to diminish.

Report informs citing the SRSroccoreport.com, this is due to a decrease in profits and sharp increase in debt in the background of the high costs of companies.

Over the past three years, Energy Return On Investment – EROI of the leading oil companies have fallen dramatically. For example, Chevron was profitable when oil price was $ 19 per barrel in 1997 but suffered a loss at times of $ 44 per barrel. The following table presents the net profit of 7 major oil companies in 2004 - 2016: 

Giant oil companies began to drastically increase their debts after the 2008 financial crisis. Thus, in order to overcome the 2008 crisis, central banks have increased liquidity in the financial markets and increased their capital costs, even though the price of oil increased. For example, although in 2013, 7 largest oil companies in the world made a profit of $ 213 billion, capital expenditures were $ 230 billion and net cash flow was $ 17 billion negative. The table below shows the debts of seven major oil companies in 2007-2016:

This can lead to the collapse of the world's oil industry, eventually the world economy.

It is forecasted that the process will occur gradually, including sharp decline in property prices.