Word: oilmen
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...panic situation" in the U.S. He had no discernible proof for the charge. By week's end Jackson conceded that "these hearings have not turned up any hard evidence that the major oil companies deliberately created the crisis." After the buffeting by Jackson and his colleagues, the oilmen were sore and furious. "They made me feel I was at a criminal trial," said Gulf Oil Co. U.S. President Z.D. Bonner...
Punitive Tax. A bigger worry for oilmen is that Congress will hastily enact a punitive excess-profits tax without having any idea of what an excess profit is-or where the companies' great earnings came from. They did not come from price gouging in the U.S. but largely from big sales overseas, where demand is even higher than in America. Exxon, for example, reported an 83% increase in profits from oil that it bought, refined and sold in Europe and elsewhere in the Eastern Hemisphere v. only a 16% increase from its business in the U.S. Domestic operations have...
Despite their rich profits last year, the oilmen contend that their earnings have been modest over a longer period. "In seven of the last ten years," says Texaco Senior Vice President Annon Card, "the rate of return on investment in the petroleum industry was below that of all manufacturing companies." In 1972, Card notes, the oil companies' rate of return on investment was only 10.8%, compared with a 12.1% average for all manufacturing concerns. But if the profits are computed as a proportion of sales, the oil industry ranks far above the average for all U.S. manufacturing industries...
...oilmen argue persuasively that they need even richer earnings to finance the heavy costs of stepping up exploration, leasing new oil fields and building refineries-a point that they are emphasizing in a quickly mounted advertising barrage. The Chase Manhattan Bank estimates that by 1985 the industry will pump an awesome $800 billion into such ventures...
ALLOWANCES FOR INTANGIBLE DRILLING COSTS. These "I.D.C.s" are the noncapital costs of drilling an oil or gas well, including wages for workmen and rental fees for equipment. Oilmen can deduct these costs from their taxable income immediately, rather than spreading the deductions over the years that the well is in operation. The Treasury Department figures that, in 1972, I.D.C. deductions saved the oilmen $600 million in federal income taxes...