Sun, Feb 03, 2008 - Page 11 News List

Exxon Mobil profits hit record high

THE GUARDIAN , LONDON

Marcos Moran delivers gasoline to an Exxon gas station in Burbank, California, yesterday. Exxon Mobil Corp posted an annual profit of US$40.6 billion for last year, the largest ever by a US company.

PHOTO: AFP

The oil group Exxon Mobil unveiled the largest profits ever recorded by a US company on Friday as higher oil prices spurred its earnings.

The largest non-government owned oil group in the world said its fourth-quarter profits rose by 14 percent to US$11.66 billion, taking the total for the year to US$40.6 billion, representing a rise of 3 percent.

The results came after Shell recorded the largest ever profits in British corporate history, US$27.6 billion. Its rival BP is due to report annual figures next week, with analysts expecting profits of about US$19 billion.

Though that would be down on 2006, after what has been a difficult year for the group, BP is expected to have benefited from a strong fourth quarter.

ANGRY RESPONSE

The scale of Shell's profits has prompted calls for a windfall tax from environmental campaigners and anger within the road transport industry over fuel prices.

Oil prices averaged more than US$90 a barrel during the fourth quarter and briefly flirted with US$100 as a result of tight supplies, geopolitical risks and the weak dollar.

That compares with an average price of about US$60 a barrel in the same period in 2006.

Exxon's overall production rose almost 1 percent over the year, helped by projects in Qatar and the North Sea.

However, the increase excludes OPEC quota effects, production-sharing agreements and lost oil from assets that were taken over by the Venezuelan government.

PRODUCTION PROBLEMS

"The only negative thing I see going forward is production," said Christopher MacDonald, a portfolio manager with WHG Funds in Dallas. "If they are spending US$21 billion a year on capital expenditure and they can't grow production ... it does not bode well for the industry in general."

Rex Tillerson, Exxon Mobil's chairman, said that the figures reflected "strong results in all business segments."

"Our long-term investment program in projects often far removed from major consuming nations continued to provide resources essential to the increasingly interdependent global energy supply network."

The US' second-largest oil firm, Chevron Corp, also posted record profits for the year, US$220.9 billion, up 5 percent from 2006.

Net income for the fourth quarter was reported at US$4.9 billion, a 29 percent increase year-on-year.

Revenue in the quarter also climbed 29 percent to US$61.4 billion, the San Ramon, California-based company said on Friday.

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