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-- BUSH doesnt know math OR ....

BUSH doesnt know math OR ....

in his latest speech he said:
" the iraqis are processing 2 million barrels of oil/ day , this has brought the country, the iraqi citizans, 6 billion Dollars for the past year.

mmmm, well (2 million) x (365) x (30/ barrel AVG)= 22 billion dollars

22 billion is not 6 billion pres BUSH ...
NOW . what happened to the rest of the money ???? the 16 billion dollars ????????????????

CAN SOMEONE TELL ME

where does the money come from to pay the laborors? Engineers? Geologists and other scientists? workers from the corporation? other workers involved the processing of oil?

22 - 6 = 16million

im guessing thats where it goes.

I'm guessing we need OPEC to pump more oil or kick their ass!
The price of oil is only further lining their thick pocketbooks with impugnity. They need to start paying for protection or we should topple their undemocratic governments.


[[[smoke]]]

quote:

Originally posted by Dmatrox where does the money come from to pay the laborors? Engineers? Geologists and other scientists? workers from the corporation? other workers involved the processing of oil? 22 - 6 = 16million im guessing thats where it goes.

Indeed, the oil doesn't turn directly into cash, nor is every dollar that comes out of it pure profit. That would imply a 100% gross margin, which is highly unlikely when you consider a company like Haliburton last reported operating margin of about 4%. In 2003, they had sales of $16.2 Billion and had operating income off that of $648 Million. By comparison, Exxon Mobile has an operating margin of around 11%, much better, but still far from "pure profit". Kerr McGee is another exploration company with margins even higher, pushing 20%. Chevron is back in the 10-11% range. The price of oil has been a lot higher than $30 per barrel as well--right now it's around $40/barrel. Without doing much more digging, I'd say the numbers he quoted were probably reasonable enough.

but the speach never mentioned profits. It read to me like money into the country, which suggests profits and a lot of salaries are still going to non-iraq accounts. this wouldn't be any different to most mining operations in poorer countries though

Maybe it doesn't include costs that aren't paid to Iraq like buying all of that equipment to bring over to get the infrastructure built. In any event, I'm sure the figure he gave was some sort of net figure.

Finance 101: revenues <> profit.

As for why it's been taking so long to generate revenues:

quote:

Iraqi oil revenues not materializing By David Isenberg The promise of oil revenues which US officials had counted on as an essential component of their plan to rebuild Iraq has not materialized, and it is beginning to look like it won't for at least two or three more years at best, even if continuing sabotage can be foiled. While in mid-April various experts were predicting that oil exports could resume in a matter of weeks, that has not happened as quickly as it should have and oil facilities continue to be sabotaged today. Oil industry experts have long known that a large share of the oil income would have to be spent to repair and upgrade those facilities. That means that the money for reconstruction efforts has to come from the international community and not from the Iraqi oil sector. The reality is there won't be any surplus Iraqi oil income for at least three to five years under a best-case scenario. Considering that American administrator L Paul Bremer said, when last in Washington, that "oil revenues are 100 percent of our budget", that means that the Iraqi council next year that is going to be responsible for the 2004 budget is going to be allocating a deficit, and a huge one at that. There was initial optimism because the worst-case scenario of damage to Iraqi oilfields from fighting during the war did not occur - a la the torching of Kuwaiti oil fields in 1991. Officially, by the end of the war only nine oil well fires were set by the retreating Iraqi forces, of out 1,800 in more than 500 oil fields in the southern region. The northern oil fields in Kirkuk and Mosul were not set afire. But the cumulative effects of more than 20 years of underinvestment, mismanagement, neglect and lack of modernization due to sanctions have left Iraq's oil sector in a sorry state. Since before the war many US officials said reconstruction would be paid for by oil revenues, this is a huge problem. Iraq only earned $12.5 billion in oil exports in 2002, and its current export capacity may be down from over 2 million barrels a day in 2000 to around 800,000 - if there is no further sabotage. Bremer said in a press interview on July 31 that it could take $50 billion to $100 billion to reconstruct Iraq, and a $1.6 billion plan to rehabilitate Iraq's oil industry was agreed to in late June. According to a field review undertaken by members of the Center for Strategic and International Studies, oil revenue projections for the new few years are low - the Coalition Provisional Authority (CPA) expects production to reach 1.5 million barrels per day (bpd) by the end of 3003 and 2.5 million bpd by the end of 2004. It is currently at around 600,000 bpd. The CPA expects to earn $5 billion in oil revenue by the end of 2003, but this projection may decrease if security problems persist and oil infrastructure continues to be targeted. Power shortages are also hampering efforts to restart oil production. According to an analysis by Anthony Cordesman of the Center for Strategic and International Studies, rather than conduct an open and transparent effort to rehabilitate Iraq's petroleum industry, with Iraq technocratic and political advice, the US acts on its own priorities and perceptions. Ordinary Iraqis come to feel their oil is being stolen and oil revenues are not used as the "glue" to unite Iraq's divided factions in some form of federalism. Ideas like securitizing Iraq's oil revenues to make direct payments to Iraqi citizens deprive the new government the US is trying to create of any real financial power and leverage and Iraqis with no experience in dealing with such funds become the natural prey of Iraqis who know how to manipulate money and such payments, according to Cordesman's analysis. Speaking at a July 24 symposium at the Carnegie Endowment for International Peace Edward C Chow, a visiting scholar in the Russian and Eurasian Program said, "So I have revised my own estimation of when production might resume back to the 2 million barrels per day or more rate pre-war, and I think, more importantly, the market has reassessed that as well. Right after combat was over, prices started moving lower in anticipation of higher Iraqi production. Since then, oil prices have resumed back to the $30 level." In early May the US set up an advisory board headed by former Royal Dutch/Shell executive Phillip Carroll to oversee the rebuilding of Iraq's oil sector. An Iraqi oil industry professional, Thamer Ghadhban, was named to serve as head of the interim management team that will run Iraq's oil ministry and report to the advisory board. The fist exports began in late June 2003. In late July Iraq contracted to sell about 750,000 bpd. By comparison, its pre-war export rate was about 2.2 million bpd. According to Carroll, a big increase in production is expected from Iraq's key southern oilfields around Basra, where output should more than double, to about 1 million barrels a day once repairs to a vital gas processing plant are concluded. Last week, Iraqi and American officials said that they had agreed on a $1.6 billion plan to rehabilitate Iraq's oil industry over eight months. The plan focuses on pipelines, pumping stations and other plants that also suffered from a lack of spare parts and were disabled by widespread looting and sabotage after the war. Persistent looting and sabotage at oil installations have dogged production in both northern and southern Iraq. Security was significantly stepped up following recent attacks on pipelines feeding refineries and power stations. Last week oil prices rose to a level not seen since the end of the Iraq war on renewed fears that looting and sabotage were preventing Iraq from increasing its exports. The pipeline through Kirkuk in northern Iraq to the Turkish port of Ceyhan, one of two main export lines for Iraqi oil, has been the target of sabotage since the end of the war in March, according to the Financial Times of London. Similarly, Iraq's North Oil Company, which produces 550,000 barrels of oil a day - currently two-thirds of Iraq's total - was unable to export because saboteurs blew up the pipeline for a second time last month. http://www.atimes.com/atimes/Middle_East/EH12Ak02.html

As for control and oversight of revenues:

quote:

Baghdad bid to control its oil wealth From The Times, AFP May 20, 2004 AN Iraqi delegation has travelled to the United Nations headquarters to lobby for the proposed caretaker government to be given full control of the country's vast oil wealth. Amid intensifying negotiations on a new UN resolution on the transfer of power, the Iraqi team will demand a cut in the current 5 per cent of its oil revenues set aside to pay reparations from the 1991 Gulf War. "Iraq must have a say in the next UN resolution," Hamid Bayati, the Deputy Foreign Minister, said in Baghdad. "We will negotiate on the basis that Iraq must be fully in charge of its resource wealth and the 5 per cent of oil revenues we pay must be reduced further." Britain and the US told other UN Security Council members at a private meeting last week that a new UN resolution on Iraq should give the new Iraqi government spending authority over the country's oil revenues. But the coalition partners want to extend the current system of international "oversight". That position appears to enjoy widespread support on the Security Council and elsewhere -- at least until a democratic government is elected early next year. The Development Fund for Iraq now contains more than $US10 billion ($14.6billion) and there are fears that it could be misused if not properly watched. "Given that this is not an elected government, and that there are so many oil revenues they could potentially control, you would want to make sure that there is an oversight mechanism until a duly elected government comes into force," said Svetlana Tsalik, director of the Open Society's Revenue Watch Project, which monitors Iraq's oil income. "After that, the nation is sovereign and they should come up with their own system for managing revenues." Under the current system, Iraq's oil income goes into a dedicated account, called the Development Fund for Iraq, at the Federal Reserve Bank in New York. Spending decisions are taken by the coalition but are audited by an International Monitoring and Advisory Board, made up of the UN, the World Bank, the International Monetary Fund and the Arab Fund for Social and Economic Development. In a holdover from the pre-war UN oil-for-food system, a portion of Iraq's oil income is diverted to the UN compensation commission in Geneva to settle billions of dollars of claims resulting from the first Gulf War in 1990-91. That figure was reduced last year from 25 per cent of Iraq's oil revenue to 5 per cent, with the largest beneficiaries expected to be Kuwait and Saudi Arabia. Neither Britain nor the United States is proposing any further change. Iraq's interim leaders, however, contend that Iraq should not be liable to pay the estimated $US300 billion of reparations for a war that Saddam Hussein started. http://www.theaustralian.news.com.a...55E2703,00.html

Does that answer this thread?

quote:

Originally posted by Dmatrox where does the money come from to pay the laborors? Engineers? Geologists and other scientists? workers from the corporation? other workers involved the processing of oil? 22 - 6 = 16million im guessing thats where it goes.

thats a lot of money man ... if cost is that much , then the wise thing would be to increase prices. meaning, instead of 30 $ a barrel , 60 $ a barrel. right ?

quote:

Originally posted by occrider Finance 101: revenues <> profit. As for why it's been taking so long to generate revenues: As for control and oversight of revenues: Does that answer this thread?

mmmmm occrider... i don't see how it does ! sorry , but could you elaborate on that . how is the oil revenue counted ? shouldn't be:
[(n)bpd x 365 x (cost pb)] - cost of production

?????
realizing that the cost shouldnt be higher than the revenue, cuz thats a waste , right ?

quote:

Originally posted by TRANCEEEE mmmmm occrider... i don't see how it does ! sorry , but could you elaborate on that . how is the oil revenue counted ? shouldn't be: [(n)bpd x 365 x (cost pb)] - cost of production ????? realizing that the cost shouldnt be higher than the revenue, cuz thats a waste , right ?

Well first of all, oil production has not been at 2 million barrels a day for an entire year. The Asia times article explicitly stated that the 2 billion barrels a day figure was production circa 2002 under Saddam's regime. Since the war ended, production was estimated to be at approximately 800,000 barrels a day. It was guessed that by the end of 2003 Iraq would be producing 1.5 million bpd and that by the end of 2004 it would be producing 2.5 million bpd. So while Iraq may be currentely producing 2 million bpd, it most certainly hasn't been accomplishing those production levels all along, and it's production efforts have been significantly hampered by attacks on the oil infrastructure (which induce further costs).

Second of all, I can assure you that the cost structure of actually selling oil is quite different from the "ok the market price for oil is $41 a barrel, therefore Saudi Arabia is getting $41 per barrel sold" mentality. If you purchase a twinkie from the supermarket does that $2.99 purchase go directly to hostess? Of course not, the grocery store gets money for distribution, the transportation sector gets money for transporting the good, and producers sell at whatever rate that they deem appropriate whether they incentivise bulk purchases, good customer relations, whatever. Clearly the oil industry is completely different than the twinkie industry, but I'm certain you can understand the complexity of the situation such that one cannot simply apply a three or four variable equation to determine profit/revenues. Christ why would we need accountants?

Third, the price of oil has been fluctuating quite a bit since 2003. Your formulae will be inherentely inaccurate despite your rough guesstimation of an average price. Not only that but we have no idea of the nature of Bush's figure. Does that include costs? Is that pure revenue? Who knows ...

And lastly, as my last article stated, oil revenues are monitored by an international body composed of the UN, the IMF, the world bank, and the Arab Fund for Social and Economic Development. THe issue is more or less a non-issue as a result of all these things. And then there is the uber-common sense argument: We spent $70+ billion plus another anticipated $20 billion, in order to steal a whopping $22 billion of Iraqi oil revenues (according to your figures even)? Phew what a cash cow ...

true

quote:

Originally posted by occrider Well first of all, oil production has not been at 2 million barrels a day for an entire year. The Asia times article explicitly stated that the 2 billion barrels a day figure was production circa 2002 under Saddam's regime. Since the war ended, production was estimated to be at approximately 800,000 barrels a day. It was guessed that by the end of 2003 Iraq would be producing 1.5 million bpd and that by the end of 2004 it would be producing 2.5 million bpd. So while Iraq may be currentely producing 2 million bpd, it most certainly hasn't been accomplishing those production levels all along, and it's production efforts have been significantly hampered by attacks on the oil infrastructure (which induce further costs). Second of all, I can assure you that the cost structure of actually selling oil is quite different from the "ok the market price for oil is $41 a barrel, therefore Saudi Arabia is getting $41 per barrel sold" mentality. If you purchase a twinkie from the supermarket does that $2.99 purchase go directly to hostess? Of course not, the grocery store gets money for distribution, the transportation sector gets money for transporting the good, and producers sell at whatever rate that they deem appropriate whether they incentivise bulk purchases, good customer relations, whatever. Clearly the oil industry is completely different than the twinkie industry, but I'm certain you can understand the complexity of the situation such that one cannot simply apply a three or four variable equation to determine profit/revenues. Christ why would we need accountants? Third, the price of oil has been fluctuating quite a bit since 2003. Your formulae will be inherentely inaccurate despite your rough guesstimation of an average price. Not only that but we have no idea of the nature of Bush's figure. Does that include costs? Is that pure revenue? Who knows ... And lastly, as my last article stated, oil revenues are monitored by an international body composed of the UN, the IMF, the world bank, and the Arab Fund for Social and Economic Development. THe issue is more or less a non-issue as a result of all these things. And then there is the uber-common sense argument: We spent $70+ billion plus another anticipated $20 billion, in order to steal a whopping $22 billion of Iraqi oil revenues (according to your figures even)? Phew what a cash cow ...

good info ... but bush specifically said 2 million bpd ,, and he said " the 2 millino bpd has brought the iraqi ppl 6 billion $ for the past year !!!! i wish i'd had a source or something ...

Re: true

quote:

Originally posted by TRANCEEEE good info ... but bush specifically said 2 million bpd ,, and he said " the 2 millino bpd has brought the iraqi ppl 6 billion $ for the past year !!!! i wish i'd had a source or something ...

Yes, he was probably referring to the fact that the current rate of production is 2 million bpd, which has brought in (to date) y amount of money. Common sense dictates that the rate of production has followed a linear, trending curve.

BUSH doesnt know math AND needs to speak proper grammar

hmmm.... more conspiracy theorists at work...

If Bush is stealing money from Iraqi oil sales, explain to me why our gas prices are higher than ever?

Bush & entire US Administration can't perform proper math.

OR

Occrider & the TA community doesn't know something that the US Administration does.



Sorry to be the spoil sport, but i'm inclined to go with #2....

-ABT-

If anyone's interested the bookings institute has the lastest statistics that would clear up the question of iraq's oil production. Although it doesn't have a magic decoder ring to deciper Bush's comments. Besides it wouldn't surprise me that what he said was designed to be misleading or an out right lie, by the time someone notices, he has already had the desirable impact. The worst thing that would happen is his press secretary would make 2 second correction blaming it on facts mixup.

http://www.brookings.edu/iraqindex

quote:

Originally posted by ABTsportsline hmmm.... more conspiracy theorists at work... If Bush is stealing money from Iraqi oil sales, explain to me why our gas prices are higher than ever? Bush & entire US Administration can't perform proper math. OR Occrider & the TA community doesn't know something that the US Administration does. Sorry to be the spoil sport, but i'm inclined to go with #2.... -ABT-

i dont think that has anything to do wit h it !

quote:

Originally posted by TRANCEEEE i dont think that has anything to do wit h it !

you don't think the fact that none of us know the complete story and everything that is going on has anything to do with it? So you just think its simple math errors by bush and thats it, huh?

Well, at least you're open-minded!

quote:

Originally posted by ABTsportsline you don't think the fact that none of us know the complete story and everything that is going on has anything to do with it? So you just think its simple math errors by bush and thats it, huh? Well, at least you're open-minded!

hahaha...I'm glad your back ATB

Hi! I'm new. Does this explain why gasoline is so expensive?

quote:

Originally posted by emander Hi! I'm new. Does this explain why gasoline is so expensive?

as far as this thread is concerned, no.

A good place to start investigating on your own would be your local taxes levied against the prod/dist costs in your area. I know your state tx. to be around .39 cents per gal. (higher than the national avg.). Federal taxes being .18.4 cpg. there could be other taxes specific to your county.

Europe has been paying over three times as much ($6-$7 per gal.)as we do for quite some time. but we don't care about them cause they are socialists .

In 1981 we were paying the equivalent of $2.99 a gal.

it's all about perspective.

quote:

Originally posted by ABTsportsline Occrider & the TA community doesn't know something that the US Administration does. Sorry to be the spoil sport, but i'm inclined to go with #2.... -ABT-

Hey, my explanation was perfectly rational. Especially since there would be no point to any kind of deception.

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