Upstream restructuring, better returns might help attract investors

In order to attract new investors by providing better returns, the oil industry might have to restructure its upstream operations into pure exploration companies that find and sell new reserves and pure production companies or royalty trusts that liquidate those reserves.Both types of companies would pay bigger returns more quickly to investors than the historical industry practice of putting all earnings and new investment capital back into the ground to increase reserves and production, said Malcolm Butler, advisory director for HSBC Investment Bank PLC, London."With demand for oil growing at a slower rate than the gross national product, this is not a growth business," Butler told the ...

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