Oil company profits :: Econbrowser

I've been waiting for James D. Hamilton, the Econbrowser, to post on oil company profits. He has, and his investigation leads him to this question, quote,

Why aren't the big oil companies reinvesting their huge profits? . . . I must confess that I find it puzzling why it would make sense in the current situation to hoard cash and buy back shares. If anyone has a good explanation, I'd be very interested to hear.

Take a look at his analysis and the comments.

I've merely asserted that if government taxes windfall profits that will discourage investment. Hamilton takes a look at whether investment is taking place at all.