Slashdot Mirror
Are We Seeing the End of Big Oil?
Hugh Pickens writes "Cyrus Sanati writes in Fortune Magazine that up until now, it has been widely accepted that being bigger was better for oil companies, but the announcement that ConocoPhillips plans to break up into two separately traded companies, separating its exploration and production unit from its refining and marketing units, took Wall Street by surprise, raising uncomfortable questions about the future of Big Oil. 'That's because the exploration side and the refining side of the oil business have little to do with one another,' writes Sanati. 'Contrary to popular belief, Big Oil has almost no control over the price of oil these days. That power squarely rests with oil-rich nations that hold most of the world's oil reserves and the Wall Street banks and hedge funds that speculate and make markets in the oil trading game. So even though ExxonMobil pumps oil, it can't guarantee that its refining unit will be able to profitably process a barrel into gasoline or heating oil.' ... 'If the ConocoPhillips story is a success for shareholders, there will be calls to break up Big Oil just in time for the annual meetings in the spring. So by this time next year, it is possible that Big Oil will go the way of Rockefeller's once gargantuan Standard Oil — with the markets, not the government, forcing a break up this time.'"
Great idea. Let's say I'm a giant pharma. I decide to promote 'efficiency & safety' by dividing up each of my candidate drugs into its own 'independent' company in which I am NOT the owner, but merely the major investor. (Oddly enough, the other pharmas are more than willing to play this game, so we collaborate).
Throughout development, marketing, and distribution, the indie company then charges all of a drug's costs back to the parent company (where the real work is run & done, and to whom most profits will flow), but because it's supposedly autonomous and 'independent', the indie company remains responsible for all potential liabilities related to the drug. Down the road, if the drug fails to make it to market (too low profits) or encounters safety problems (too high costs), I liquidate my share of the indie company and walk away.
Is that the kind of improvement in 'safety and efficiency' you were talking about?