You would be forgiven for thinking that oil company bosses spend their lives bathing in banknotes and profit. However, that simply isn’t the case in most instances. Some of the biggest drilling firms around today have to spend a lot of money to keep their operation going. We wanted to set the record straight by highlighting where all that cash goes in the modern industry. You might be surprised to learn that even the most established players have to invest a lot of money in their future.
Parts and maintenance
Drilling firms use very expensive machinery that often requires a lot of attention. When something stops working for even a few hours, the company could lose millions. Something as simple as replacement sprockets might cause the operation to come to a standstill. With that in mind, it’s easy to see why bosses spend millions every year on maintenance and parts. On top of everything else, it helps to keep their workers safe. Most employees will work in rather harsh environments, and that means the machines are exposed to extreme conditions. While most drills are built to last these days, they still require constant tweaks, and that costs money.
Government fees and fines
Oil companies have to pay governments a lot of money in fines and fees every year. That is because they rarely drill in their home country. Bosses who want to excavate reserves in African countries often face the most substantial costs. That is because the establishments in those nations are often corrupt. They want to make as much money as possible from the oil pools beneath their land. On top of that, the average oil spill could cost a company billions of dollars. You only have to look at what happened off the American coast a few years ago.
Renewable energy technology
While most oil giants are content with their industry, they know things will change in the future. That explains by the big names are spending a fortune on renewable energy technology. Indeed, many drilling firms have acquired solar panel and wind turbine companies in recent years. At some point, we will reach a time when there isn’t enough oil left to meet our requirements. When that happens, the oil companies will have to shift their focus and concentrate on more suitable energy solutions. They just need to work out how to make that process as profitable as possible.
As you can see from that information, running an oil company involves a lot of hard work. The public perception is that people are making a mint from the exploitation of natural resources. However, that couldn’t be further from the truth. Government regulations ensure that all drilling specialists meet certain standards these days. The oil rush is over, and now those firms have to focus on the future. Will we see more oil companies purchasing renewable energy patents during the next few years? Almost certainly. How long will it be before oil production becomes a thing of the past? Only time will tell.
Whatever you think of oil and gas giants, there’s no getting away from the fact they spend a lot of cash to make their profits.