Wed, Feb 01, 2006 page6

• Record earnings at ExxonMobil spark suspicion

  • AFP
  • • 
    • 
    • 

  ExxonMobil Corp on Monday reported record earnings of US$36.1 billion for last year, reviving claims that the oil industry is profiting from sky-high prices at the expense of hard-pressed consumers.

  ExxonMobil, the world's largest oil company, saw its net income rocket 43 percent from 2004 on the back of record-breaking prices for oil and natural gas.

  In the last three months of last year its earnings surged 27 percent to US$10.71 billion -- one of the highest quarterly totals ever.

  Chevron Corp and ConocoPhillips Inc have also reported huge income over the last year, causing several opposition Democrats to weigh in with complaints after a summer of discontent against the oil majors.

  "ExxonMobil's record profits may be great news for the company's shareholders, but it is grim news for American consumers who are paying through the nose for gasoline at the pump and home heating oil for their homes," Democratic Representative Edward Markey said.

  "The [White House] policy of subsidizing wealthy oil companies has proven to be wildly effective in boosting oil company profits, but it continues to harm American consumers and threaten economic growth," he added.

  Democratic Senator Hillary Clinton called on US President George W. Bush to use his State of the Union address yesterday to set up a strategic energy fund and to roll back billions of dollars in tax breaks extended to oil firms last year.

  ExxonMobil chief executive Rex Tillerson acknowledged "a great deal of public interest" in energy prices and recognized that consumers and businesses worldwide want "affordable energy."

  "Our strong financial results will continue to allow us to make significant, long-term investments required to do our part in meeting the world's energy needs," he said.

  The Texas-based company's fourth-quarter net income smashed Wall Street forecasts. Its revenue climbed 19.5 percent to US$99.66 billion in the fourth quarter, and by 25 percent to US$371 billion for the whole of last year.

  Last week Chevron Corp, the second-biggest US oil major after ExxonMobil, reported a 6 percent rise in its annual earnings to US$14.1 billion. ConocoPhillips's net profit surged 66.4 percent over last year to US$13.5 billion.

  The surge in oil prices helped the US giants overcome production disruptions caused by several hurricanes last August and September, which served to send gasoline pump prices skywards.

  Called to account by the US Congress last November, the heads of the big energy companies combatively denied they were profiteering and stressed the enormous investments required by their industry.

  A full-page advertisement taken out by the American Petroleum Institute, an industry-funded group, in Monday's Wall Street Journal said that the record earnings last year were much less on average than that posted by other sectors such as banking.

  But the political controversy has not gone away as summer has turned to winter and heating bills have climbed by an average of 35 percent over last year for US homes warmed by natural gas.

  However, Alaron Trading energy analyst Phil Flynn said there was nothing untoward about the record earnings given the billions that the oil companies have to invest in exploration and production.
• Most Popular

  • 1

    Jeers as Real Madrid fall 2-1 to Man City

  • 2

    Taiwanese tourists go viral in video during Japan quake

  • 3

    Climber to attempt free solo of 101

  • 4

    YouBike to require insurance for all riders from Jan. 1

  • 5

    US military might ‘waning,’ editorial says