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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: BigBull who wrote (55649)	11/29/1999 9:52:00 PM
From: Broken_Clock	Read Replies (2) \| Respond to of 95453

Message 12138058 Think this had anything to do with the E&P softness lately?

To: BigBull who wrote (55649)	11/30/1999 8:03:00 AM
From: Razorbak	Read Replies (1) \| Respond to of 95453

XON/MOB Asset Divestments BigBull: Seems as though the new company is shedding "non-core" assets to become THE E&P powerhouse. Doin the Dijur shuffle? Anybody see a trend here? This seems like a fairly strong repudiation of the Upstream/Downstream oil company as a conglomerate philosophy. That's not really true. XON/MOB has no intention of divesting its now-stronger downstream refining and marketing operations. It's only getting rid of the parts that the government have indicated would block regulatory approval because of anti-trust concerns. When two companies merge that have, when combined, potential monopoly power in a given market segment or geographic region, the feds usually require some assets divestment. I'm sure, if left strictly to their own devices, XON/MOB would love to keep the California refinery and the 2,400 service stations which are being divested. IMO, XON/MOB is perfectly happy being a fully-integrated player. When oil prices rise, the downstream guys get depressed and the upstream guys get all giddy, wishing that they could be a truly independent E&P. Eventually and inevitably, however, the situation reverses when oil prices plunge and the same E&P guys who were so giddy before get laid off. That's why the guys at the top have no intention of ever breaking up that vertical integration. They learned this lesson the hardest way possibly back in the late 1800's when Rockefeller's empire wasn't yet integrated, and they have no intention of ever dismantling their best internal hedge to inevitable commodity price fluctuations. JMHO. Razor