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Subject:  From the mouth of an oil man Date:  4/18/2011  9:49 AM
Author:  TMF42 Number:  47 of 77

Chevron's (NYSE: CVX) CEO John Watson's views on our nation's energy crisis are profiled in this WSJ article:

As you probably could have guessed, he is unapologetically pro-oil. After all, Chevron is the second largest oil major in the US. His points are mostly valid, though when speaking about the role of technology in making Peak Oil Theory of little concern, he doesn't mention safety issues or spillover effects and how the industry is dealing with those.

On the US GoM drilling moratorium, though, I couldn't agree more. I've not see sufficient evidence to call the safety issues "systemic." The fact remains, ~14,000 wells have been drilled offshore, and when viewed on the whole, the industry's incident record is phenominal. BP was negligent and the GoM participants and US economy is paying the price in terms of jobs lost.

Also making the news recently is Britain's decision to raise the tax of producing in the North Sea (to 30% from 20%). Such a move, combned with still-high prices will continue to push firms to focus on maximizing existing wells -- which bodes well for oil services companies. I've long admired two oil service companies that I believe have great long term prospects.

Dresser-Rand Group (NYSE: DRC)
Core Laboratories (NYSE: CLB)

However, both are a bit pricey for my liking. I'd like to see expectations a bit lower. I've done a bit of work on Dresser-Rand and would be a bit more excited if shares fell south of $45.

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