turd rising : the floater, page-8

Unfortunately for CTX it isn't as simple as just buy the oil then refine it and make heaps of money. Their refineries are ageing - 50+ years - which means a lot of money on maintenance and renewal. Plus, the higher the price of oil climbs, either the more that cuts into their margins, or the more they have to put the price of petrol etc up which will eventually dampen demand which will then cut into their profits.

The whole climate change debate and proposed solutions will also continue to cost them money. Remember the blowout on their new bensat plant - by memory it ended up costing them 40% more than budgetted for (and we're talking hundreds of millions of dollars here). Another threat is the one from overseas refineries which are much larger than ours and can produce product at a cheaper cost.

Another smaller threat but one that some argue is very real, is that of the emergence of hybrid cars. It has to happen at some stage????? Then, some might argue that oil can only continue to increase in price due to peak oil being reached.

OK, some of these threats may not be just around the corner but I don't think that CTX is exactly going to be making the easy profits they saw recently. Just my personal thoughts.