Record
profits for ExxonMobil spark new political row
AFP
IRVING, Texas
Petroleumworld.com 01 31 06
ExxonMobil Corp. Monday booked record earnings of 36.1 billion
dollars in 2005, 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. In the last three months of 2005
its earnings surged 27 percent to 10.71 billion dollars -- one
of the highest quarterly totals ever.
Chevron Corp. and ConocoPhillips Inc. have also reported huge
income over the last year, sparking new political recriminations
after a summer of discontent against the oil majors.
"The federal government has a responsibility to make sure
that these companies continue to innovate instead of just profiting
from the status quo," Democratic Senator Chuck Schumer said.
"These companies should be investing in developing new sources
of fuel and new technologies, like hydrogen fuel cells and alternative
fuels, that will ease our dependence on foreign oil and help consumers
save," he said.
ExxonMobil chief executive Rex Tillerson said the fourth-quarter
profits reflected "higher crude oil and natural gas realizations
and improved refining and marketing margins".
He acknowledged "a great deal of public interest" in
energy prices and recognized that consumers and businesses worldwide
want "affordable energy".
But he stressed: "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."
The Texas-based company's fourth-quarter net income came to 1.71
dollars a share. Excluding special items, ExxonMobil would have
earned 10.32 billion dollars, or 1.65 dollars a share.
That was well above Wall Street analysts' forecasts for ExxonMobil
to earn 1.44 dollars a share on average.
The company's revenue climbed 19.5 percent to 99.66 billion dollars
in the fourth quarter, and by 25 percent to 371 billion dollars
over 2005.
Last week Chevron Corp., the second-biggest US oil major after
ExxonMobil, reported a 6.0 percent rise in its annual earnings
to 14.1 billion dollars. ConocoPhillips's net profit surged 66.4
percent over 2005 to 13.5 billion.
A record-breaking year for oil prices helped the US giants overcome
production disruptions caused by several hurricanes over August
and September, which served to send gasoline (petrol) pump prices
skywards.
Called to account by the US Congress in 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 the record earnings in 2005 were much less on average than
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.
Opposition Democrats have seized on a recent report in the New
York Times that said energy companies have been underpaying the
government by hundreds of millions of dollars on the oil and natural
gas they extract from federal land.
However, Alaron Trading energy analyst Phil Flynn said there was
nothing untoward about the record earnings given the billions
that the oil companies invest in exploration and production.
"The danger is we create the impression that oil majors are
evil and end up passing laws that end up hurting the consumer
even more," he said.
AFP
01/30/06
Copyright
© 2006 AFP. All rights reserved
