Exxon Mobil, the world’s biggest oil company, which earned a record $39.5 billion last year, plans to spend to the tune of $21 billion exploring for oil and expanding refineries this year as a worldwide shortage of drilling rigs inflates costs. The company also hopes to begin pumping oil or gas from more than 20 projects in the next three years after seven start-ups last year. The latest investment plans marked that the capital budget has to be increased by around 5.5 percent compared to $19.9 billion that the company spent last year on exploration and construction of fuel and chemical plants.
The chairman and chief executive, Rex W. Tillerson, has said that the company is taking efforts to add one million barrels a day of oil and gas to its current production as the company starts more than 20 projects in the next three years. The latest list of new projects includes liquefied natural gas projects in Qatar, deepwater fields in Angola and the Gulf of Mexico, and oil fields in the North Sea.
Last month, Exxon Mobil had reported the largest annual profit by a U.S. company - $39.5 billion despite the fact that its earnings for the last quarter of 2006 declined by 4 percent to $10.25 billion. Obviously, high oil prices last year contributed a lot to this earmarked earning of the company as it averaged more than $65 a barrel in New York last year, consequently oil companies have had significantly higher earnings.
Moreover, the last quarter of the financial year proved to be troublesome for the company at home and abroad. In US itself, the high profits have troubled some lawmakers and it fuelled the Democratic-controlled Congress to seek higher taxes from oil companies. In addition to it, the government was also forced to withdraw some tax breaks given to the oil companies. In the meantime, Exxon also had to face some tough negotiations with Venezuela, which is seeking to increase its control over its energy sector.
The company has informed that it has decided to turn over operational control of a joint venture project in Venezuela’s oil-rich Orinoco River region to its partner, Petroleos de Venezuela SA, Venezuela’s government-controlled oil company.
