ExxonMobil is to release its fourth-quarter results on Monday. And Jaime Spellings, ExxonMobil's general manager of corporate planning, is trying to put them in perspective.
He suggests that the public compare the oil company’s figures against those for other liquids, such as Coca-Cola. In the third quarter of last year, for example, Exxon earned 9.8 cents per dollar of sales, while Coca Cola earned 21.2 cents per dollar of sales. In fact, he adds, most major oil companies had income well below many other large corporations.
Mr Spellings’s presentation is aimed at heading off another round of the vitriol that emerged when Exxon, the world's biggest publicly listed oil and gas company, reported reported nearly $10bn in third-quarter profit, up 75 per cent from the year-earlier period. Then, amid $3 per gallon gasoline and rising winter fuel prices, Congress called the major oil and gas companies to hearings in Washington to face questioning on what many suspected was profiteering at the public's expense.
The US Senate responded with an estimated $4.3bn tax increase on the inventories of the biggest oil companies, and limited to smaller companies the tax break for oil exploration passed in the energy bill this past summer. That legislation has not made it all the way through Congress, however, and the major oil companies do not think it should. “ExxonMobil is a net buyer of crude oil and is subject to the same crude oil prices that affect governments, businesses and consumers alike,” Mr Spellings told the Financial Times.
Robin West, chairman of PFC Energy, the consultancy, backs him up. “Sensible politicians have to recognise the majors are no longer price makers but price takers.” While those in the industry realise the oil companies cannot be held solely responsible for high fuel prices, it does not mean the public will not blame Exxon, and its peers, with the profits being reported for the fourth quarter of last year. Last week, Chevron, the US’s second-largest major, reported a 21 per cent rise for the quarter; ConocoPhillips, the US’s third-largest, reported a 51 per cent rise; and Marathon, the fourth-largest US major, reported nearly tripling its profits.
Chevron, like Exxon, sought to head off any controversy, issuing an information sheet ahead of the reporting season. Industry analysts do not believe the efforts by the majors to head off criticism will end the controversy. Amy Myers Jaffe, energy expert at Rice University's Baker Institute for Public Policy, says energy security, in the sense of affordable, obtainable energy, remains one of the top five issues for the public. Yet, she says, the focus of those involved is on deflecting blame instead of working to prevent a repeat of the shortages and record prices of the past year.