Exxon Mobil Corporation (XOM), Royal Dutch Shell plc (ADR) (RDS.A), Eni SpA (ADR) (E): 13 Billion Barrels of New Oil Plague the Petroleum Industry

With almost $50 billion invested in the project so far and so little to show for it, the one way these companies will be able to make a decent return will be the project’s extremely long time horizon. Even if it ramps up to 1.5 million barrels per day, production at this field is expected to last for several decades, so down the road those big bucks invested today might seem worth it. Exxon Mobil Corporation (NYSE:XOM) and Royal Dutch Shell plc (ADR) (NYSE:RDS.A) estimate that they will need to be involved in the project beyond 2040 to make a reasonable return on Kashagan.

What a Fool believes

For investors looking at the companies involved in this project, Kashagan may end up being more of a burden than a blessing. The government has hinted at terminating contracts in the event of an accident, which would translate to multibillion-dollar writedowns if any thing were to happen. Also, each of these companies has projects in the pipeline that will have much more impact on the bottom line in the short to medium term. In all reality, Kashagan may end up being more of a liability than a bankable asset. It’s still going to take several billions of dollars to get the project up to peak capacity, so we are still years away from seeing how profitable Kashagan really is.

The headaches involved in investing in overseas oil and gas projects make investing in the American energy boom that much more compelling. The problem with investing here, though, is finding the companies that have the legs to stand the test of time. For this reason, we have put together a comprehensive look at three energy companies set to soar during this transformation in the energy industry. Let us help you discover these three companies that are spreading their wings by checking out our special report, “3 Stocks for the American Energy Bonanza.” Simply click here and we’ll give you free access to this valuable report.

The article 13 Billion Barrels of New Oil Plague the Petroleum Industry originally appeared on Fool.com and is written by Tyler Crowe.

Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow Tyler at Fool.com under the handle TMFDirtyBird, on Google +, or on Twitter @TylerCroweFool. The Motley Fool recommends Total. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.