Exxon Q1 profit: $10.7bn

Exxon
Mobil Corp., the world’s largest company by market value, posted its largest
profit in almost three years as soaring gasoline prices fueled discontent among
consumers and policymakers.

With
U.S.
motorists paying the most for gasoline since prices reached a record $4.11 a
gallon in the summer of 2008, Exxon said today that its first-quarter net income
jumped 69 percent to $10.7 billion. The Irving, Texas-based company is sitting
on a cash pile of $13.2 billion, even after distributing more than $7 billion
to shareholders in buybacks and dividends.

President
Barack Obama has called for an end to decades-old tax breaks for domestic oil
and natural-gas drilling, and urged Saudi Arabia, the world’s largest crude
exporter, to help rein in surging world crude prices by boosting output. Exxon
said inflicting higher taxes would drain funds the company needs to find new
oil and gas fields.

“Over
the past five years, we incurred a total U.S.
tax expense of almost $59 billion, which is $18 billion more than we earned in
the United States
during the same period,” Kenneth Cohen, Exxon’s vice president of public and
government affairs, said yesterday in a blog post on the company’s website.
“Critics often try to ignore these facts by saying the oil and gas industry receives
‘subsidies.’ But what they really mean is that they want to increase our taxes
by taking away long- standing deductions for our industry while leaving these
same deductions in place for other sectors of the economy.”

Exxon’s
expenditures for new wells and production platforms rose 24 percent during the
first three months of this year to $6.9 billion, the company said today in a
statement. New projects such as West Qurna 1 in Iraq contributed to a 10 percent increase
in oil and gas production.

Shell,
Occidental

Exxon
was the latest oil company to report expanding first- quarter profits. Earlier
today, Royal Dutch Shell plc, the world’s second-largest gasoline producer after
Exxon, said net income rose 30 percent to $6.3 billion. Occidental Petroleum
Corp, the largest onshore oil producer in the continental U.S., said
first-quarter profit increased 46 percent to $1.56 billion.

ConocoPhillips,
the third-largest U.S.
oil company, yesterday reported a 44 percent profit gain. Chevron Corp., the
No. 2 U.S. energy producer, is expected to report a 31 percent increase in net
income when results are announced tomorrow, according to the average estimate
of four analysts in a Bloomberg survey.

The
average U.S.
price for regular gasoline touched $3.886 a gallon yesterday, the highest since
August 2008, according to AAA. Prices have escalated 26 percent this year. The
all-time high of $4.11 was reached on July 15, 2008, which helped drive Exxon’s
record $14.8 billion quarterly profit that summer.

‘Windfall
Profits’

“The
government should tax the windfall profits of the oil giants and invest the
money in renewable energy programs so that we reduce our dependence on oil and
dirty energy,” said Robert Weissman, president of Public Citizen, a
Washington-based consumer advocacy group.

Exxon
fell 70 cents to $87.08 at 12:14 p.m. in New York Stock Exchange composite
trading. The stock has 10 buy ratings from analysts, 12 holds and one sell.

Exxon
plans to spend $34 billion this year on capital projects such as new oil wells,
pipeline repairs and refinery upgrades. Chief Executive Officer Rex Tillerson told
analysts last month that he is targeting a 4 percent increase in oil and
natural gas production this year.

“Increased
capital expenditures are necessary to continue adding reserves,” said Eliecer
Palacios, energy sector specialist at Maxim Group, a boutique investment bank.

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An Exxon station in the US. The company posted more than $10bn profit in one quarter.
Photo: File
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