ExxonMobil Corporation

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ExxonMobil Corporation

founded: 1882 variant name: formerly exxon corporation and previously named standard oil of new jersey

Contact Information:

headquarters: 5959 las colinas blvd.
irving, tx 75039-2298 phone: (972)444-1000 fax: (972)444-1882 url: http://www.exxon.com


Exxon stands as the number two company in the United States after Wal-Mart, according to Fortune 500, but the Global 500 ranks it number one. After the merger with Mobil in 1999, the company became the number one oil and gas producer in the world, eclipsing the giant British Petroleum. The company owns more than 40,000 gas stations in 118 countries and does business in nearly 200 countries. It has dozens of refineries with a total capacity of 6 million barrels a day, and it is involved in selling and producing petrochemicals, and mining coal and other minerals.

The 1989 Exxon Valdez oil tanker spill in Prince William Sound, Alaska, tarnished the company's reputation for years and brought financial headaches after a punitive damages fine of $5 billion was levied. Recovering from that disaster, the company has been looking to expand its power generation business in China. It also has been putting massive funds into its refining and retail businesses in the Asia/Pacific region by expanding operations in Japan, Malaysia, Singapore, and Thailand. Many of the areas where ExxonMobil elects to do business are in volatile areas of the world where rebel insurrections, government coups, and even widespread killings are commonalities.

In a powerful 2001 speech given to an audience of international business leaders, Renè Dahan, director and EVP, presented a sober analysis of what it is like for a company to seek profits in global hotspots such as the once infamous killing fields of Chad: "Business has had a hand in improving the condition of local people, and we have repeatedly seen an improvement in condition go hand in hand with a reduction in the resort to violence. We have helped the situation, in my view, by staying away from a highly political role, by avoiding religious bias, by guarding against moral arrogance, and by treating people fairly and equally. We have been particularly effective in those places where we could use our leverage to promote better national policies. We have been successful also through our determination not to compromise our key values. We have achieved progress where we have been willing to take a leadership role. We have seen conflict deterred by good corporate citizenship and a recognized value to the nation from our operations. We have found that partnership with other international parties, including the World Bank, has been of significant benefit. When we are successful in our business, it provides a clear demonstration to everyone of the benefits that arise from a focus on economic efficiency and the application of advanced technology. And it also tells people in troubled societies that progress is possible, perhaps only possible, where individual differences are tolerated and the skills of all are used."


After years of profit, the company endured some short-term sputtering in the new century, particularly after air and auto travelers stayed home in droves following the September 11, 2001, terrorist attacks. In late April 2002, ExxonMobil disclosed that its first quarter 2002 earnings of $2.15 billion had fallen $730 million from final quarter 2001 earnings of $2.88 billion, well below the $2.9 billion recorded the first quarter of 2001. ExxonMobil calculated that it would return to normal profits and better refining margins before the end of 2002 as the U.S. economy, in particular, steadily climbed toward recovery.

Hampering global recovery was the complete collapse of the economic system and devaluation of the peso in Argentina in 2001 and 2002. Also hurting Exxon and other large oil companies was the month-long end of oil exports from Iraq as Saddam Hussein protested the Israeli invasion of Palestinian territory in the West Bank. Consequently, in May 2002, ExxonMobil stock was valued at $36 a share.

FAST FACTS: About ExxonMobil Corporation

Ownership: ExxonMobil Corporation is a publicly owned company traded on the New York Stock Exchange.

Ticker Symbol: XON

Officers: Lee R. Raymond, Chmn., Pres., and CEO, 64, 2001 salary $2,850,000, 2001 bonus $2,700,000, stock options $16,400,000; Renè; Dahan, Dir. and EVP, 60, $4,500,000; Harry J. Longwell, EVP and Operations Mgr., Production Dept., 60, $4,500,000

Employees 99,600

Principal Subsidiary Companies: ExxonMobil's chief subsidiaries include Natuna gas field (50 percent ownership); ExxonMobil China Inc.; ExxonMobil Coal and Minerals Company; ExxonMobil Company International; ExxonMobil Company U.S.A.; ExxonMobil Computing Services Company; Exxon-Mobil Exploration Company; ExxonMobil Production Research Company; ExxonMobil Research and Engineering Company; ExxonMobil Upstream Technical Computing Company; Exxon Mobil Upstream Development Company; ExxonMobil Ventures, Inc. (CIS); ExxonMobil Chemical Company; Imperial Oil Limited; and SeaRiver Maritime Financial Holdings.

Chief Competitors: Some of ExxonMobil's primary competitors are Amerada Hess; Ashland; ARCO; British Petroleum; Broken Hill; Caltex Petroleum; Chevron; Dow Chemical; Eastman Chemical; Elf Aquitaine; FINA; Huntsman; Imperial Oil; Koch; Norsk Hydro; Occidental; PDVSA; PEMEX; Pennzoil; Petrobras; Phillips Petroleum; Royal Dutch/Shell; Sun; Texaco; Tosco; Total and Union Carbide.


Analyst John Hervey of Donaldson, Lufkin, & Jenrette summed up the value of ExxonMobil stock, "The company offers one of the best and most consistent return records in the oil industry." Much of the controversy surrounding the ExxonMobil Corporation has not been its financial condition, but rather its handling of the Exxon Valdez oil spill. The March 24, 1989, mishap resulted in a $5-billion fine from the courts, which eventually was ruled too high by an appeals court, leading to speculation in the news media that the fine might be reduced to less than $1.65 billion. The National Transportation Safety Board found that the cause of the spill was neglect of the third mate to appropriately manipulate the ship due to extreme exhaustion and his heavy workload. The cause most people recall was the intoxication of the master on board, placed in charge of an oil-loaded vessel. By January 2002, although ExxonMobil had yet to pay punitive damages, it had substantially recovered many customers lost after the Valdez incident, although some diehard activists have vowed to maintain a lifelong boycott. With BP and ConocoPhillips continuing to increase in size, few analysts expect ExxonMobil to remain complacent as its rivals kick and claw for market share.

Throughout the rest of the twenty-first century, therefore, consolidations are increasingly likely for such energy giants, noted oil and gas analyst John Thieroff of Standard and Poor's in a January 2002 issue of Physicians Financial News. Indeed, ExxonMobil already has acquired enough resources and wealth to a degree that Ida M. Tarbell, the early twentieth-century muckraker whose journalistic exposé of Standard Oil led to its forced dismantling by the government, could never have foreseen.


After forming the Standard Oil company in 1870, John D. Rockefeller created the Standard Oil Trust, which enabled the firm to establish new, independent companies in various states by dissolving existing Standard Oil associates. The Supreme Court, however, ordered these companies to be split into 34 entities since the Trust owned 90 percent of the petroleum industry. One of the split companies was New Jersey's Standard Oil (Jersey Standard). When Walter Teagle was president of Jersey Standard in 1917, he quietly bought half of Humble Oil of Texas and moved operations into South America. The company also participated in the Red Line Agreement in 1928, which designated most Middle East oil to selected companies. Other overseas ventures included the 1948 purchase of a 30 percent ownership in Arabian American Oil Company along with a 7 percent interest of Iranian production purchased in 1954. These two moves deemed Jersey Standard the biggest oil company in the world. When oil companies still using the Standard Oil name protested Jersey Standard's use of the name Esso, the company became Exxon in 1972. This change cost the company $100 million.

Other financial difficulties hit Exxon after the oil crisis of the 1970s, which quickly reduced its oil reserves. Exxon was hit hard again in 1989 when the Valdez oil tanker spilled 11 million gallons of oil into Alaskan waters. Shoveling out billions of dollars in cleanup costs, the company was called "reckless" by a federal jury in Alaska, but punitive damages were reduced late in 2001, minimizing loss to the company financially but little helping its reputation.

CHRONOLOGY: Key Dates for ExxonMobil Corporation


Incorporates as the Standard Oil Company of New Jersey


Standard Oil (New Jersey) becomes the sole holding company for all Standard Oil interests


The Supreme Court orders Standard Oil (New Jersey) to separate from its subsidiaries


Standard (Jersey) purchases 50 percent of Humble Oil & Refining, the biggest of Standard's suppliers


Standard (Jersey) introduces the Esso brand name


The Socony-Vacuum Corporation, with roots tracing back to the Standard Oil breakup, merge. Their emblem is the winged horse Pegasus, used in the 1800s as a logo by Standard Oil


Purchases 30 percent ownership of Arabian American Oil Company


Purchases a 7 percent interest of Iranian production, making Standard (New Jersey) the largest oil company in the world


The "Put a Tiger in Your Tank" slogan begins this year as the brainstorm of a Chicago advertising writer for a northern Illinois Esso ad campaign. Subsequently, the Esso and Exxon tiger become one of the world's best-known trademark animals


Exxon Corporation becomes the official name of the company


The Exxon Valdez crashes off the coast of Alaska spilling 260,000 barrels of crude oil


The company opens the first of its "On the Run" convenience stores


Exxon announces a huge oil discovery in the Gulf of Mexico


Exxon and Mobil merge. All but one of the merged companies' executives (Lucio A. Noto) come from Exxon, and Noto retires a few years after the merger


ExxonMobil pays a $225,000 fine for a pipeline blast in Texas that killed a police officer


ExxonMobil is rated the top company in America on the Global 500 list and number two on the Fortune 500 list, making it as powerful a corporate entity as its predecessor Standard Oil had been

The 1990s were characterized mostly by expansion for the Exxon Corporation. The Natuna gas field was developed after Exxon and Pertamina, the Indonesia state oil company, agreed to terms, but civil revolt in Indonesia during the 2000s has made the country's oil fields a dangerous place to work. The company also agreed to a $15-billion development of three oil and natural gas fields near Sakhalin Island in Russia, and was able to entertain further expansion plans after it announced a large oil discovery in the Gulf of Mexico in 1996. In the 1990s the corporation elected to attempt the laying of a pipeline and exploration of oil fields in the midst of upheaval caused by rebels in the African nation of Chad. By the 2000s, the company could point with pride to the progress it had made, as well as quantify specific areas where residents of that nation had benefited from prosperity.

The most notable story in recent years has been Exxon's merger with Mobil, a business decision that certainly will predate other such mergers on the part of ExxonMobil, as well as its worldwide competitors such as BP. The difficult job of bringing a company back from the Valdez travesty, as well as the challenge of combining employees and resources with the giant Mobil, was generally handled quite well by Lee R. Raymond (chairman, president, and CEO). But Raymond, in 1998, strongly vowed to retire at 65, and so the best chairs on the corporate deck almost definitely will be reshuffled in a corporation whose top directors have most visibly been male.


ExxonMobil's chairman, Lee Raymond, refers to the company's strategy in Forbes as "the relentless pursuit of efficiency." Reducing operating costs and focusing on return on capital have been core strategies for the company, as has been earning profits for the company and shareholders. ExxonMobil's exploration and production businesses have revolved around the following strategies as well: to make existing oil and gas production sites as profitable as possible, to invest only in projects that produce returns, and to profit from strengthening natural gas markets. Furthermore, in 2001, Renè Dahan, director and EVP, revealed yet another facet of company policy and strategy in a speech he delivered in Denver about the company's willingness and capacity to accept risks. "It is a sometimes forgotten, or possibly ignored, truth that if a company fails to respect the priorities and the values and the market focus that make it successful, then it will fail not only in its primary mission, it will also be unable to assist in other areas as well," he said. "When it comes to the role that my company or any company can play in addressing conflict, it will be recognized by all here that conflict and instability threaten not only the safety and well-being of nations but also the basic success of our business operations. Most companies, faced with an extremely difficult business environment, often choose to stay away rather than assume the risks inherent in latent or active conflicts. But while we all dislike instability and risk, we must remember that the ability of any company to deal successfully with these difficult conditions, and the risks they bring, can be a determining condition for its success. Good companies are not just risk takers; they must be good risk managers. They identify and analyze risks and develop plans to deal with those risks if and when they materialize. This is part of our everyday job."

ExxonMobil's refining and marketing businesses have had strategies of their own. One ingredient has been the expansion in profitable, growing markets, like Asia-Pacific, civil war-torn Africa, Eastern Europe, and Latin America. A second strategy involved the company's restrictions on refining investments in markets that do not produce high growth. A third element has been the company's constant efforts to lower operating expenses and to refine production. ExxonMobil Corporation also has aimed to remain focused on research investment activities. Its merger with Mobil has shown that it is capable of making hard decisions about the futures of workers in the company it takes over, making cuts if those employees are deemed expendable.


Exxon appealed the $5 billion-fine assessed against it for the Valdez oil spill, and the company stored away that amount in case the appeal was lost, but in 2001 it became apparent following a court ruling that the amount of judgment was going to be billions less than at first thought. Additionally, falling oil prices and the reluctance of people to travel after September 2001 because of perceived dangers from terrorist attacks may cause ExxonMobil to cut its prices, which eventually should result in lower profits. Energy demand is decreasing, partially because of the unusually mild winters, while at the same time, oil supplies are increasing. Exxon estimates that crude oil use in Asia is going to increase dramatically, perhaps to exceed the combined use of crude oil in the United States and Europe; as a result, the company is pursuing expansion efforts in the Asian market, including the opening of a $2-billion petrochemical facility in Singapore.


Formerly, Exxon stayed away from large investments in liquefied natural gas (LNG). Beginning in the late 1990s and throughout the 2000s, however, the company began pursuing LNG projects in Yemen and Indonesia. It also developed natural gas fields in Russia. Still recovering from a marred reputation after the Valdez disaster, the company launched a request to be allowed back into the same Alaskan waters it polluted in 1989, Prince William Sound. The ship, now renamed the SeaRiver Mediterranean, was prohibited from entering the waters after the spill by the Oil Pollution Act. The company's motivation for such a request stemmed from the fact that it was losing money operating the ship in Europe and Egypt, where less expensive ships are readily available.

Another strategic move by ExxonMobil Corporation has been the introduction of its Tiger Express and On the Run retail stores. The stores offer customers a one-stop, so-called "multi-task" gas station shopping experience. Employees wear khaki pants and specially designed polo shirts. Other conveniences include a Taco Bell Express drive-through window, a Check Express check-cashing service, a service that allows customers to pay at the pumps, indoor bathroom facilities, diaper changing tables in men's and women's restrooms, and recorded music playing at the pumps and inside the store.


ExxonMobil's primary products are oil and gas, however, its chemical division also manufactures and sells plastics, synthetic rubbers, performance fluids, plasticizers, basic chemical building blocks, and lubricant and fuel additives.


ExxonMobil Corporation has launched several efforts in aiding the community and its environment. One such effort has been the financial contributions aimed at preventing the tiger, the company's symbol, from becoming extinct. It planned to donate approximately $5 million to support breeding efforts and zoo information displays and tiger projects in Siberia and Sumatra. Controversy surrounding Exxon's efforts has stemmed from accusations that the company has not addressed the real threats facing the extinction of tigers: poaching, illegal trade in tiger parts, and annihilation of the animals' prey by hunters. Some have said the company has no plans to enter anti-poaching efforts since such activities have been touchy in Asia, a large, fast-emerging market for ExxonMobil. Critics have said that without attention to the real dangers, the company's contributions will be of little value and that the tiger's disappearance from Western India, for example, is all but inevitable in the twenty-first century.

Other efforts to incorporate community involvement have included the company's efforts in education. Through the ExxonMobil Education Foundation, in 2002 alone it offered $16.1 million in grants to more than 800 institutions of higher learning. Under the Foundation's Educational Matching Gift Program, all employees' donations are then matched by ExxonMobil 3-to-1.

ExxonMobil has also provided assistance in the Ambassador Franklin Williams Scholarship Program from the Stevens Institute of Technology. Exxon gave $1.5 million in grants within an eight-year period to award scholarships for minority students.

ExxonMobil has preserved the charitable interests formerly the main province of Mobil. One of these is the Genesis Fund of Boston, Massachusetts, which assists children born with physical and mental defects, and another is Paul Newman's Hole in the Wall Gang charities that assist children with life-threatening illnesses.


ExxonMobil does business in nearly 200 countries. Exxon China Inc. is headquartered in Beijing. Activities there include exploration, refining, and marketing. Chemical and electric power businesses have been established there as well. ExxonMobil's Coal and Minerals Company is located in Colombia, the United States, and Australia. Also accountable for electrical generation capabilities in Hong Kong, the company conducts business in power generation and coal and mineral exploration. Europe, offshore Malaysia, and Australia serve as oil and gas production cites for ExxonMobil. One subsidiary, Exxon Ventures Inc., manages exploration and production activities in the former Soviet Union. The company runs offices in Baku, Azerbaijan; Almaty, Kazakstan; and Moscow, Yuzhno-Sakhalinsk, and Arkhangelsk, Russia. Another subsidiary, Imperial Oil Limited, stands as a leading member of the Canadian petroleum business. It has been Canada's largest crude oil producer and the biggest refiner and marketer of petroleum products.


Statistics show that ExxonMobil Corporation makes efforts to hire, retain, and promote minorities and women, although the very highest positions in the company following consolidation with Mobil were all male. In 2002 Lee Raymond stressed the importance of never overlooking any possible source of human talent, as well as the need for finding the best native people possible already living in the countries where ExxonMobil establishes or builds a business presence.

Two of the company's important philanthropies are the United Negro College Fund and the Hispanic Scholarship Fund. It also supports the efforts of the Society of Women Engineers to encourage female entry into the profession. ExxonMobil allies itself with the National Action Council for Minorities in Engineering (NACME), the Texas Alliance for Minorities in Engineering (TAME), and the National Society of Black Engineers. ExxonMobil also participates in university internship programs.



armstrong, james. "low voltage for energy stocks." physicians financial news, 15 january 2002.

clarke, jim. "exxon to appeal $5 billion oil spill judgment." san diego daily, 13 february 1997.

dupree, jr., thomas h. "federal court's exxon ruling sets punitive damage precedent." washington legal foundation, 22 february 2002.

exxon corporation home page, 13 may 2002. available at http://www.exxon.com.

the exxonmobil corporation home page, 13 may 2002. available at http://www.exxonmobil.com.

"exxonmobil corp." the regulatory news service, 23 april 2002.

galvin, kevin. "exxon wants exxon valdez allowed back in prince william sound." san diego daily, 16 january 1997.

kennett, jim. "exxonmobil fined $225,000 in texas pipeline blast." bloomberg news, 6 november 2001.

koenig, david. "exxon is upbeat on future; it says demand for energy will revive as world economy recovers." the hamilton (canada)spectator, 11 march 2002.

mack, toni. "the tiger is on the prowl." forbes, 21 april 1997.

teitelbaum, richard. "giants of the fortune 5 hundred: exxon: pumping up profits for years." fortune, 28 april 1997.

For an annual report:

on the internet at: http://www.exxon.com

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. exxonmobil corporation's primary sics are:

1311 crude petroleum and natural gas

1382 oil and gas exploration services

2911 petroleum refining

5172 petroleum products, not elsewhere classified

5541 gasoline service stations

also investigate companies by their north american industry classification system codes, also known as naics codes. exxonmobil corporation's primary naics codes are:

324110 petroleum refineries

422720 petroleum and petroleum products (except bulk stations and terminals) wholesalers

447110 gasoline stations with convenience stores