Exxon Mobil is the world's largest integrated oil company (ahead of BP and Royal Dutch Shell). Exxon Mobil engages in oil and gas exploration, production, supply, transportation, and marketing worldwide. It has proved reserves of 13.2 billion barrels of oil equivalent. Exxon Mobil's 38 refineries in 21 countries have a throughput capacity of 6.3 million barrels per day. The company supplies refined products to nearly 34,000 service stations in 100 countries. It provides fuel to more than 600 airports and 200 seaports. Exxon Mobil is also a major petrochemical producer. The company posted consecutive US records for annual corporate earnings for 2005, 2006, and 2007.
Through ExxonMobil Chemical, the company develops and sells petrochemicals (including ethylene, olefin, polyolefin, and paraxylene). Another unit mines coal and other minerals. Exxon Mobil also has stakes in electric power plants in China.
With significant oil and gas holdings in Europe, the US, and eastern Canada, the company is looking for new opportunities in West Africa, both onshore and off; in the former Soviet Union; and in South America. It is also investing heavily in deepwater exploration (i.e., in water depths greater than 1,350 feet). Exxon Mobil is divesting coal and other mining assets in order to focus on its core oil and gas businesses.
Facing nationalization pressure from President Hugo Chavez, in 2007 Exxon Mobil became embroiled in a fierce dispute with the Venezuelan government over the future of its assets in that country.
In 2008 the company announced plans to sell to distributors its remaining 820 company-owned US gas stations and another 1,400 outlets operated by dealers.
Company History
Exxon's 1999 acquisition of Mobil reunited two descendants of John D. Rockefeller's Standard Oil Company. Rockefeller, a commodity trader, started his first oil refinery in 1863 in Cleveland. Realizing that the price of oil at the well would shrink with each new strike, Rockefeller chose to monopolize oil refining and transportation. In 1870 he formed Standard Oil, and in 1882 he created the Standard Oil Trust, which allowed him to set up new, ostensibly independent, companies, including the Standard Oil Company of New Jersey (Jersey Standard); Rochester, New York-based Vacuum Oil; and Standard Oil of New York (nicknamed Socony).
Initially capitalized at $70 million, the Standard Oil Trust controlled 90% of the petroleum industry. In 1911, after two decades of political and legal wrangling, the Supreme Court broke up the trust into 34 companies, the largest of which was Jersey Standard.
Walter Teagle, who became president of Jersey Standard in 1917, secretly bought half of Humble Oil of Texas (1919) and expanded operations into South America. In 1928 Jersey Standard joined in the Red Line Agreement, which reserved most Middle East oil for a few companies. Teagle resigned in 1942 after the company was criticized for a prewar research pact with German chemical giant I.G. Farben.
The 1948 purchase of a 40% stake in Arabian American Oil Company, combined with a 7% share of Iranian production bought in 1954, made Jersey Standard the world's #1 oil company at that time.
Meanwhile, Vacuum Oil and Socony reunited in 1931 as Socony-Vacuum, and the company adopted the Flying Red Horse (Pegasus -- representing speed and power) as a trademark. The fast-growing, diversifying company changed its name to Socony Mobil Oil in 1955 and became Mobil in 1976.
Other US companies, still using the Standard Oil name, objected to Jersey Standard's marketing in their territories as Esso (derived from the initials for Standard Oil). To end the confusion, in 1972 Jersey Standard became Exxon, a name change that cost $100 million.
Nationalization of oil assets by producing countries reduced Exxon's access to oil during the 1970s. Though it increased exploration that decade and the next, Exxon's reserves shrank.
Oil tanker Exxon Valdez spilled some 11 million gallons of oil into Alaska's Prince William Sound in 1989. Exxon spent billions on the cleanup, and in 1994 a federal jury in Alaska ordered the company to pay $5.3 billion in punitive damages to fishermen and others affected by the spill. (Exxon appealed, and in 2001 the jury award was reduced to $2.5 billion, and in 2008 to $507.5 million).
With the oil industry consolidating, Exxon merged its worldwide oil and fuel additives business with that of Royal Dutch/Shell in 1996. The next year, under FTC pressure, Exxon agreed to run ads refuting claims that its premium gas enabled car engines to run more efficiently. Another PR disaster followed in 1998 when CEO Lee Raymond upset environmentalists by publicly questioning the global warming theory.
Still, Exxon was unstoppable. It acquired Mobil for $81 billion in 1999; the new company had Raymond at the helm and Mobil's Lucio Noto as vice chairman. (Noto retired in 2001.) To get the deal done, Exxon Mobil had to divest $4 billion in assets. It agreed to end its European gasoline and lubricants joint venture with BP and to sell more than 2,400 gas stations in the US.
In 2000 Exxon Mobil sold 1,740 East Coast gas stations to Tosco for $860 million. It sold a California refinery and 340 gas stations to Valero Energy for about $1 billion.
More than a decade after the Exxon Valdez wreaked environmental havoc off the shores of Alaska, Exxon Mobil attempted to atone in 2001 by joining the California Fuel Cell Partnership, a group studying possible alternatives to, and supplements for, gasoline in fuel-burning engines. That year Exxon Mobil also announced that it was proceeding with a $12 billion project (with Japanese, Indian, and Russian partners) to develop oil fields in the Russian Far East.
In 2002 Exxon Mobil sold its 50% stake in a Colombian coal mine as part of its strategy to divest coal assets in order to focus on its core businesses. That year the company sold its Chilean copper mining subsidiary (Disputada de Las Condes) to mineral giant Anglo American for $1.3 billion. Exxon Mobil sold its 3.7% stake in China Petroleum & Chemical Corp. (Sinopec) in early 2005. Later that year the company was ordered to pay $1.3 billion to about 10,000 gas station owners for overcharges dating back to 1983; the average amount for each station owner was about $130,000.
Shortages caused by Hurricane Katrina prompted Exxon Mobil to receive a 6 million barrel of crude oil loan, primarily from the US Strategic Petroleum Reserve, and increase gasoline production at its Baton Rouge facility.
