The EIA said in its report that the profits gave the major oil companies such as ChevronTexaco, ExxonMobil and Phillips Petroleum the necessary financial firepower to pursue aggressive expansion plans via mergers and acquisitions.
Capital expenditures by major US energy firms almost doubled to an all time high of $109.3 billion in 2000, according to the EIA. About 97 per cent of funds were used for mergers and acquisitions with 80 per cent of that figure being spent on oil and gas production assets.
The EIA report also highlighted the tendency among major firms to increase reserves through the purchase of existing reserves rather than through drilling. In 2000, purchases of existing reserves accounted for over 60 per cent of reserve additions, up from about 10 per cent in the 1990 to 1996 period, according to the EIA.
