Big Oil seen a target in new Congress

Repealing the financial relief affects domestic oil giants such as Exxon Mobil Corp., Chevron Corp. and ConocoPhillips, and large U.S. operations of foreign firms such as BP Plc and Royal Dutch Shell.

Mark Kibbe, a tax policy analyst with the American Petroleum Institute, said the tax breaks make it more affordable for companies to search for oil and gas in the United States, instead of looking in other countries where production costs are generally much cheaper.

"You're increasing the costs of those projects and you're making U.S. companies that much less competitive in the world market," he said.

Guy Caruso, who heads the federal Energy Information Administration, warned that taking away the government's financial help could kill some energy projects.

"The more expensive the project, the more affected they will be from a rollback in tax incentives and breaks," he said.

Costly projects like drilling for crude in the very deep waters in the Gulf of Mexico or developing the thick oil trapped in shale rock in the Rocky Mountain region could be shut down, said Caruso.

"There are some projects I'm sure would drop off the table," he added.

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