Skip to Content
Uncategorized

Big Oil Strong in Profits, Weak in R&D

We need better technology for finding and extracting oil, but big oil is spending a relatively tiny amount on R&D.
July 28, 2006

This week ExxonMobil again announced strong earnings, with record quarterly profits of over $10 billion, or 36 percent higher than this quarter last year. But at a time when easy-to-reach oil is running out, and new techniques are needed to find more oil, make the best use of existing oil fields, and produce oil from nontraditional sources such as oil sands, the company continues to spend only a tiny fraction of its profits on research and development.

Figures for research and development were not available in the quarterly report, but in its annual statement earlier this year, the company revealed that it spent $712 million dollars on R&D last year. While that’s a lot of money, it’s only about 0.2 percent of last year’s astonishing revenues of $359 billion.

“If you look at the percentages of dollars that go into R&D in the oil industry compared to other industries, it’s minuscule,” says Dan Burns, research scientist at MIT’s earth resources laboratory, who says drug companies might spend about 15 percent of their revenues on R&D. Pfizer, for example, spent $7.4 billion in R&D last year. That’s 14.5 percent of its $51 billion in revenues. And it’s 10 times what ExxonMobil spends, even though the oil giant brings in far more money. –By Kevin Bullis

Keep Reading

Most Popular

Russian servicemen take part in a military drills
Russian servicemen take part in a military drills

How a Russian cyberwar in Ukraine could ripple out globally

Soldiers and tanks may care about national borders. Cyber doesn't.

Death and Jeff Bezos
Death and Jeff Bezos

Meet Altos Labs, Silicon Valley’s latest wild bet on living forever

Funders of a deep-pocketed new "rejuvenation" startup are said to include Jeff Bezos and Yuri Milner.

conceptual illustration showing various women's faces being scanned
conceptual illustration showing various women's faces being scanned

A horrifying new AI app swaps women into porn videos with a click

Deepfake researchers have long feared the day this would arrive.

ai learning to multitask concept
ai learning to multitask concept

Meta’s new learning algorithm can teach AI to multi-task

The single technique for teaching neural networks multiple skills is a step towards general-purpose AI.

Stay connected

Illustration by Rose WongIllustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at customer-service@technologyreview.com with a list of newsletters you’d like to receive.