With oil prices making a modest comeback from last year, big oil is investing once again – but not on multi-billion dollar mega-projects of recent years. Instead, they are seeking out and spending on projects that require lower cash up front, and promise faster returns. Smaller investments and faster returns mean reduced risk.
Once investing heavily in offshore mega-projects, ExxonMobil is shifting focus to America and plans to spend $20 billion on refineries, petrochemical plants, and other projects in and around the Gulf of Mexico. Chevron Corporation is expected to follow suit with capital investments in projects that start up quickly and generate higher returns.
These leaders are banking on a new investment paradigm — Low Risk, High Return.
An investment in people is another way industry leaders are breaking the old high risk/high return paradigm. Wise spending on people builds asset value, increases productivity and delivers a dividend of reduced risk.
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