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Oil Companies Are Split on Push By Nations to Wring More Profits

Summary: Royal Dutch Shell (NYSE:RDS.A) and Exxon Mobil (NYSE:XOM) are among several oil companies determined to retain the terms of contracts signed with oil-producing nations in the early 1990s, despite the wrath of governments that expect to be compensated for the subsequent rise in oil prices. Chevron (NYSE:CVX) and France's Total S.A. (NYSE:TOT), on the other hand, have expressed a willingness to share profits. Russia has indicated its displeasure at existing contracts by revoking an environmental permit for Shell's $20 billion Sakhalin-II project -- a move that could shut down the project completely. Developing countries are unilaterally increasing royalties and taxes on oil revenue, and companies that balk, like Italy's Eni and France's Total, are seeing their fields confiscated. Read full article >
Related links: Commodities' Downward TrendWhy We Continue to Expect Exorbitant Oil PricesMcDep Buy Recommendations: Chevron, Encana and MarathonRussian Government Muscling In on Anglo-Russian Gas Field Venture • Conference call transcripts: Exxon Mobil Co. Q2 2006

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Source: Division Among Oil Companies: Cling to Outdated Contracts or Share Profits?