Exxon rakes it in
By Joe Baker, Senior Editor
War is good for business. ExxonMobil, the largest privately owned oil company in the world, reports first quarter profits of $7 billion. Exxon earned double the hourly earnings of British Petroleum.
A key factor in the record haul was the rising price of oil which reached record levels in the three-month period. Fears of a supply interruption because of the Iraq war provided momentum.
The net income of $7.05 billion includes special items. Last years figure was $2.09 billion. Shareholders have been rewarded with an 8 percent increase in dividends.
The burgeoning profits were driven not only by the Iraq war, but by strikes in Venezuela and Nigeria, according to Fadel Gheit, an oil analyst with the New York brokerage house of Fahnstock & Co.
They (Exxon) had a very strong wind in their sail and they happened to have a very big sail, Gheit told The Guardian newspaper. But if you look at the detail, the U.S. refining and marketing figures fell from the fourth quarter and the U.S. chemicals results were also very disappointing, he said.
Protestors objecting to Exxons positions on certain environmental issues were not impressed by the skyrocketing profits.
All you are seeing is the oil industry getting its first benefits from the war in Iraq, said a spokeswoman for StopEsso, a growing protest movement. Our action has now spread to nine countries and in terms of brand damage we are winning, she said.
The group has rapped Exxon for scoffing at the issue of global warming and draws the protestors ire for allegedly persuading President Bush not to sign the Kyoto treaty on hydrocarbon emissions.
Oil industry analysts believe the first quarter profit levels will not appear again because prices for crude oil have come down since the military phase of the Iraq war ended.