Scotland On Sunday: Exxon Mobil to overhaul Ford with largest ever profit at £12.8bn: “Rival Shell will also unveil record profits this week, at $17.6bn. But the City will be focusing on the troubled company’s proven oil reserves - which are expected to be downgraded by a further billion barrels.” (ShellNews.net) 30 Jan 05
RICHARD ORANGE AND GUY DIXON
US OIL giant Exxon Mobil will tomorrow reveal the largest annual profit ever made by a public company, smashing Ford’s previous record and setting the scene for an unprecedented cash haul by the major oil companies.
Exxon will unveil profits of at least $24.3bn (£12.8bn), comfortably clear of the $22.1bn Ford made in 1998.
The oil giant has been the most profitable company in Fortune 500’s global index since 2001, when the oil price began its climb to recent $50 highs. Last year it still fell short of Ford’s record with net income of $21.5bn.
The record profits will stoke further protests against the company, which has become the focus of a worldwide "Stop Esso" campaign.
Rival Shell will also unveil record profits this week, at $17.6bn. But the City will be focusing on the troubled company’s proven oil reserves - which are expected to be downgraded by a further billion barrels.
The first results last week from US oil majors ConocoPhillips and ChevronTexaco, indicate that the oil industry has made even more money over the past three months than analysts suspected.
Jacques Rousseau, an analyst at Friedman, Billings, Ramsey, said: "The results are coming in better than we thought. What we just heard from Chevron Texaco was that Asia-Pacific was a big area for profits with the refining margins there. Some of that upside should roll over to Exxon. Chemicals is another area where you should see strength."
Ford made the record books on the $16bn spin-off of its financing vehicle, The Associates. Exxon’s record stems simply from the incredibly favourable conditions for the industry.
Shell, meanwhile, has promised an "update" on its reserves checking process next week ahead of a definitive statement in its 2004 annual report.
• OPEC is expected to maintain its oil production target at 27 million barrels a day - but analysts warn the consortium may surprise the market today and trim output plans.
The oil production cartel meets in Vienna as prices continue to hover close to the $50 per barrel mark and amidst continued strong demand from China.
The threat of disruption to the landmark elections being held in Iraq today has prompted expectations that OPEC will not risk forcing prices higher by cutting targets.
The 10 members of OPEC, excluding Iraq, decided last month to cut production by one million barrels per day (bpd) from January to bring real output closer to the organisation’s agreed target of 27 million bpd.
OPEC is currently producing about 29.6 million bpd.
Demand for oil, traditionally higher in the winter months, is expected to slow in the Spring. OPEC is expected to wait until March to cut targets.