ExxonMobil recently set a new record for corporate profits, announcing annual figures of $36,13-billion, up 42% on the previous year despite spending $18-billion in share buybacks. The announcement brought immediate condemnation from green groups, which accused it of prospering from a ”carbon economy” that would bring the world close to extinction with global warming.
The world’s largest publicly quoted oil company, which trades as Esso in Britain, earned profits of more than $10-billion in the last quarter alone and some analysts are predicting that the 2006 results will be considerably better. Meanwhile, energy rival Gazprom — the Russian firm that cut off gas supplies to the Ukraine over a price row — revealed its profits surged 67% in the first nine months of the year to 232-billion roubles (about R6,9-billion).
The Exxon figures were the farewell gift from Lee Raymond, its chief executive who left the company on December 31, but could spell further trouble with environmentalists — and politicians worried about petrol prices.
Tony Juniper, director of Friends of the Earth, called on consumers to back its Stop Esso campaign, saying the ”vast” profits were being won at the expense of global warming. ”The company has grown phenomenally in part due to its relationships with the government and partly by making a massive contribution to climate change [through encouraging the use of fossil fuels],” he said.
Shares in the company rose 3% to $63 in pre-market trading as it took the full benefit of a 40% increase in crude oil prices over the period, driven up by political tensions in Iran, Venezuela and Nigeria. On Monday the price in New York for March delivery was $56,31 a barrel.
Fourth-quarter revenues rose from $83,4-billion in 2004 to more than $100-billion in 2005, with the only downside coming on production volumes. Hurricanes Katrina and Rita, which hit the United States Gulf Coast last year, plus divestments and a reduction in volumes from production sharing agreements led to a 1% slump in total output.
But Fadel Gheit, oil analyst with Oppenheimer & Co in New York, said the figures were spectacular in a year when the firm had spent $5-billion in each of the last two quarters.
”And we have not seen anything yet. I believe these monstrous numbers are just the appetiser with the main course this coming year. Profits will be significantly higher in 2006 unless oil and gas prices collapse, which I do not expect.”
Exxon’s results lifted the combined 2005 profits for the US’s three largest integrated oil firms to more than $63-billion.
ConocoPhillips said last Wednesday its fourth-quarter earnings rose 51% to $3,7-billion, while annual income climbed 66% to $13,5-billion. Two days later, Chevron said its annual income jumped 6% to $14,1-billion. — Â