JIM CHANOS: There’s a ‘disaster waiting to happen’ in the oil and gas industry
ANDY TULLY, OILPRICE.COM
BusinessInsider.com
MAY 27, 2015
Huge oil companies, among the largest businesses in the world, don’t excite hedge fund manager Jim Chanos because today they have to work harder and more inefficiently than ever to bring their products to market.
“[W]e’re just seeing that … these guys like Exxon and Chevron and Royal Dutch Shell are simply replacing $20 [per barrel] oil with $80 oil,” Chanos said May 24 on the PBS television program “Wall Street Week.” “So high return-on-capital businesses are becoming more mundane return-on-capital businesses.”
This isn’t surprising, as the average global price of oil plummeted from its high of more than $110 a barrel 11 months ago to less than half that value by the end of 2014. Now it’s recovered a bit to prices in the mid-$60 range.
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