Anyone who keeps abreast of business news from within the oil industry will already know that BP posted astonishing profits for the 2012/13 tax year. Insiders now claim that figures will be even higher this year for many drilling companies thanks to extra oil coming from the Middle East. With that in mind, we thought it warranted some more research. We wanted to know why oil from that part of the world allows UK and US firms to earn such a high income. What we found out might be of some interest to you. There are many different reasons for increased turnover, but we’ve managed to identify the ones making the most significant difference.
Twenty-five year drilling contractors
Almost as soon as the Iraq war started, business owners from within the oil industry began making their pitches to control wells. After negotiation, the government of Iraq signed a bill that allowed British and American oil giants to take the lion’s share of profits for the next twenty-five years. All they had to do was keep the wells in good working order, and keep the fuel flowing. That has no doubt made life a lot easier for those earning from this field. Most of the structures required were already in place. That meant the firms concerned didn’t have to spend very much to get started. Oil prices are falling at the moment as a direct result of that arrangement. Still, the big names are still taking their cut regardless.
Better attitude towards recycling
While businesses in most industries are currently involved in a drive to go green, it is those dealing with oil that need to make the biggest changes. The heads of BP and similar firms understand that, which is why they have implemented strict recycling procedures. Where they would have purchased brand new products in the past, they now prefer to opt for used drilling cases and machinery. By opting for that strategy, the job is still completed. However, environmental impact is lowered.
Most drilling companies ship their best team members around the world when focusing on new locations. That usually means they have to offer better wages and incentives. Even so; many of the unskilled jobs can be performed by local people. As the bulk of Middle Eastern countries are in turmoil at the moment, residents are willing to work for a pittance. That is because the average living wage in their country is very low. Anyone who can find work with an oil company is guaranteed to earn more than their neighbours. However, the wages are nowhere near as high as you might expect. That has helped drilling firms to keep costs down.
As you can see, there are many reasons drilling specialists are profiting more than ever from Middle Eastern oil. Will things continue down this path in the near future? Almost certainly. What will happen when their twenty-five years are up? It is impossible to say. That said; pundits and industry buffs are going to have a lot of fun finding out.