Aha, more myths to conquer! Having a friend who’s worked at Exxon since well
before it merged with Mobil, the source of Exxon’s (and others) record profits
are clear, and their execs couldn’t think of a better business to be in. Just
imagine running a company which has made more net profit per quarter than any
other US company, ever…
"2/1/2008 CNNMoney – Exxon Mobil made history on Friday by reporting the
highest quarterly and annual profits ever for a U.S. company, boosted in large
part by soaring crude prices…fourth-quarter net income rose 14% to $11.66
billion, or $2.13 per share. The company earned $10.25 billion, or $1.76 per
share, in the year-ago period. The profit topped Exxon’s previous quarterly
record of $10.7 billion, set in the fourth quarter of 2005, which also was an
all-time high for a U.S. corporation…revenue rose 29.5% from a year ago to
Exxon also set an annual profit record by earning $40.61 billion last year -
or nearly $1,300 per second in 2007. That exceeded its previous record of
$39.5 billion in 2006.
…in its worldwide exploration and production, or “upstream,” business…
Profit rose 32% to $8.2 billion during the quarter… Income in Exxon’s
refining, or ‘downstream’ business rose 15.7% during the quarter to $2.27
Imagine owning a business in which you make more $ every time your raw
material cost increases!
Personally, I like the “per second” numbers best. My friend is partly
responsible for that, because he has to optimize shipping operations – where
to buy crude or other petro product to load into a ship, and where to deliver
that product to, you guessed it, make the most $.
Some refiners may complain. but Costco is able to sell fuel for $.20 or more
below what Exxon, Shell, etc. retail it for simply because Costoc develops
long-term contracts with refiners. So, if the refiners can make $ from
Costco, they can surely make money from retail stations, especially if owned
by their own brand.
No one in the oil industry needs any sympathy just now.–
79xj6L SII (BRG + wires)
86xj6 SIII (Black)
61 Sprite MkII (Red)
Menlo Park, Calif.
Craig Talbot wrote:
Close, but not quite, as the duty is per litre, not per gallon. The fuel
duty is ï¿½0.5035 per litre, plus VAT, so the total tax is 69.53p per
litre. At current oil prices, the cost of crude is about 37p/litre, and
you don’t get 1 litre of refined gasoline per litre of crude. Then you
need to add in the cost of refining it, the cost of transportation form
the refinery to the local station, you can see that they is very little
left for the oil company.
Here in Canada the profit margin for refiners is about 2%, so they could
earn more money by closing the refineries and buying government bonds.
Not a lot of incentive to continue in that business is there?
The archives and FAQ will answer many queries on the XJ series…
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