Exxon's $10 Billion Fill-Up: Cashing in on Crunch (Quarterly Record)

[beetbox]

Exxon's $10B fill-up: Cashing in on crunch
By Brett Arends
Wednesday, September 7, 2005 - Updated: 04:27 PM EST

Oil companies came under new fire yesterday when it emerged that ExxonMobil's profits are likely to soar above $10 billion this quarter on the back of the fuel crisis.

     That's $110 million a day, and more net income than any company has ever made in a quarter. It's also a stunning 69 percent increase over the same period a year ago and a 34 percent jump from the $7.6 billion Exxon made just last quarter.

     ``Do you realize President Bush has just given a tax break to ExxonMobil?'' thundered Rep. Ed Markey (D-Malden). ``Of all the companies in the history of the world that needed a tax break, this month, ExxonMobil should be at the bottom of the list.''

     The law gives incentives to producers such as Exxon to expand production, such as for drilling for new wells in deeper waters in the Gulf of Mexico.

http://business.bostonherald.com/businessNews/view.bg?articleid=101320

[rooboy]

1. Can someone explain how you can make record profits...

when there are record costs?? Without profiteering, that is.

[420inTN]

12. Re: Can someone explain how you can make record profits..

Because Exxon doesn't just sell gas at the pumps, it also drills and pumps crude oil out of the ground, and sells it on the open market.

So, if it costs Exxon $15 to get a barrel of oil out of the ground, and they sell it on the open market for $70, they make an buttload of profit. So, sell 1 million barrels a day for $50-$55 profit each and the money just racks up.

Exxon:

Drills and pumps crude oil out of the ground.
Transports crude oil (anyone remember Exxon Valdez?)
Operates refineries
Owns gas stations
Provides gas to gas stations.

Exxon is involved in every step of the process.

Exxon is also a multi-national corporation. Some of its subsidiaries (Esso), are huge.

According to Exxon's August filing: http://biz.yahoo.com/e/050804/xom10-q.html

In the first six (6) months of 2005:
Exxon's US Earnings: $ 5,221,000,000
Exxon's non-US Earnings: $10,461,000,000.

So, about 2/3 of Exxon's earnings come from outside the US which is defintely helped by the euro-dollar conversion.

Additionally, they've paid about $47,071,000,000 in taxes, which amounts to an approximate 41.3% tax rate. I'm going to assume that this is global taxes, not just US taxes.

I think that the "Downstream" revenue is the revenue from their Tiger Market convenience stores and gas sales. I'm not sure if their refining operations are considered "upstream" or "downstream". Their downstream revenue for the first half of 2005 was $ 1,830,000,000.

Most of Exxon's profits is coming from the drilling and selling of crude oil, although they are far from losing money at the pumps.

[Sven77]

2. the excuses

go on and on, its short supply, weather, terrorism, not enough refineries, etc.

[Skink]

3. Does Exxon do no bid contracts.,,,

[DeepModem Mom]

4. kick

[Vickers]

5. I'm sure it's just a coincidence...

:sarcasm:

[AzDar]

6. 110 million of OUR dollars a day, and they are handed a tax break

..... SICKENING!!!

[saigon68]

15. Bush is their Butt boy

[grumpy old fart]

7. Price gouging, pure and simple.......

"Jacques Rousseau, energy analyst at investment bank FBR, yesterday explained that most of the extra money that consumers are paying for gasoline is (that)...prices are soaring because of perceived shortages while the cost of producing the gasoline is little changed".

Isn't that the definition of price gouging? Taking advantage of the public's perception to raise prices?

[LostinVA]

8. This is not price gouging, DU (am serious)

This is PROFITEERING, which is worse. The last four years has definitely been price gouging, but the last 2-2.5 weeks? Pure profiteering, which makes them complete scum.

Nerriam-Webster:

ain Entry: prof·i·teer
Pronunciation: "prä-f&-'tir
Function: noun
: one who makes what is considered an unreasonable profit especially on the sale of essential goods during times of emergency

[grumpy old fart]

9. Price gouging v. profiteering is a matter of duration it seems....

so perhaps you've got it flipped...:

Price gouging refers to a sharp, temporary increase in the price of items that are in high demand because of a civil emergency, without a generally recognized justification or in breach of contract. The term is distinguished from profiteering by being short-term and localized, and by a restriction to essentials such as food, clothing, shelter, medicine and equipment needed to preserve life, limb and property

http://en.wikipedia.org/wiki/Price_gouging

[n2doc]

10. Sheesh with oil at 65 a barrel

They need TAX INCENTIVES to go drilling for new production sources? Yeah right....

Watch the HUGE OBSCENE bonuses come next year for these jokers.

[burythehatchet]

11. well the joker bonuses are to be looked, but

the real score is the megabucks that flow right back into the coffers of the Republican and Democrat candidates. This is how government is purchased.

[DiverDave]

13. Aww, they will have to pay more to keep

the politicians off their backs.

Make 100 billion, pay 250 million for bribes.

Sweet deal, if you ask me:sarcasm:

[SomewhereOutThere424]

14. I seriously hope something happens to exxon

We may need oil, but we don't need those corrupt scumbags.

[enough]

16. kick