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Exxon Mobil Corporation or ExxonMobil (NYSE: XOM), headquartered in Irving, Texas, a suburb of Dallas, USA, is the largest publicly traded integrated oil and gas company in the world, formed on November 30, 1999, by the merger of Exxon and Mobil. As of 2007 it is the largest company in the world (in market value) as ranked by the Forbes Global 2000; at $410.7 billion and the second largest company in the world (by revenue), after Wal-Mart Stores as ranked by the Fortune Global 500. It is the largest of the six oil "supermajors" with daily production of 6.5m boe (barrels of oil equivalent), contributing 3% of the world's oil and 2% of the world's energy.[citation needed] As of 2007, Exxonmobil Corporation ranks as the seventh largest company in the world overall, according to the Forbes Global 2000.
Corporate divisions
The company is bifurcated into a "Downstream" division (marketing, refining, and retail operations) located in Fairfax, Virginia, an "Upstream" division (oil exploration, extraction, shipping, and wholesale operations) located in Houston, Texas, and a "Chemicals" division also located in Houston, Texas. Although most internal operations are divided along these lines, the company also has several ancillary divisions, such as Coal & Minerals, which are standalone and not part of either the Upstream or the Downstream segments. The upstream division dominates the company's cashflow, accounting for approximately 70% of revenue. The company employs over 100,000 people worldwide, with approximately 4,000 employees in its Fairfax downstream headquarters and 27,000 people in its Houston upstream headquarters. The merger of Exxon and Mobil was unique in American history because it reunited the two largest companies of John D. Rockefeller's Standard Oil trust, Standard Oil Company of New Jersey/Exxon and Standard Oil Company of New York/Mobil, which had been forcibly separated by government order nearly a century earlier.
In 2006, Wal-Mart recaptured the lead with revenues of $348.7 billion against ExxonMobil's $335.1. ExxonMobil continues to lead the world in both profits ($39.5 billion in 2006), and market value ($410.7 billion). HistoryBoth Exxon and Mobil were descendants of the John D. Rockefeller corporation, Standard Oil. The reputation of Standard Oil in the public eye suffered badly after publication of Ida M. Tarbell's classic exposé The History of the Standard Oil Company in 1904, leading to a growing outcry for the government to take action against the company. By 1911, with public outcry at a climax, the Supreme Court of the United States ruled that Standard Oil must be dissolved and split into 34 companies. Two of these companies were Jersey Standard ("Standard Oil Company of New Jersey"), which eventually became Exxon, and Socony ("Standard Oil Company of New York"), which eventually became Mobil. In the same year, the nation's kerosene output was eclipsed for the first time by gasoline. The growing automotive market inspired the product trademark Mobiloil, registered by Socony in 1920. Over the next few decades, both companies grew significantly. Jersey Standard, led by Walter C. Teagle, became the largest oil producer in the world. It acquired a 50 percent share in Humble Oil & Refining Co., a Texas oil producer. Socony purchased a 45 percent interest in Magnolia Petroleum Co., a major refiner, marketer and pipeline transporter. In 1931, Socony merged with Vacuum Oil Co., an industry pioneer dating back to 1866 and a growing Standard Oil spin-off in its own right. In the Asia-Pacific region, Jersey Standard had oil production and refineries in Indonesia but no marketing network. Socony-Vacuum had Asian marketing outlets supplied remotely from California. In 1933, Jersey Standard and Socony-Vacuum merged their interests in the region into a 50-50 joint venture. Standard-Vacuum Oil Co., or "Stanvac," operated in 50 countries, from East Africa to New Zealand, before it was dissolved in 1962. Mobil Chemical Company was established in 1960. As of 1999 its principal products included basic olefins and aromatics, ethylene glycol and polyethylene. The company produced synthetic lubricant base stocks as well as lubricant additives, propylene packaging films and catalysts. Exxon Chemical Company (first named Enjay Chemicals) became a worldwide organization in 1965 and in 1999 was a major producer and marketer of olefins, aromatics, polyethylene and polypropylene along with specialty lines such as elastomers, plasticizers, solvents, process fluids, oxo alcohols and adhesive resins. The company was an industry leader in metallocene catalyst technology to make unique polymers with improved performance. In 1955, Socony-Vacuum became Socony Mobil Oil Co. and in 1966 simply Mobil Oil Corp. A decade later, the newly incorporated Mobil Corporation absorbed Mobil Oil as a wholly owned subsidiary. Jersey Standard changed its name to Exxon Corporation in 1972 and established Exxon as a trademark throughout the United States. In other parts of the world, Exxon and its affiliated companies continued to use its Esso trademark. On March 24, 1989, shortly after midnight, the Exxon Valdez oil tanker struck Bligh Reef in Prince William Sound, Alaska, spilling more than 11 million gallons (42,000 m³) of crude oil. The spill was the second largest in U.S. history, and in the aftermath of the Exxon Valdez incident, the U.S. Congress passed the Oil Pollution Act of 1990. Immediately after the spill, Exxon voluntarily paid $300 million to over 11,000 Alaskans and businesses affected by the Valdez spill. In addition, the company paid $2.2 billion to clean up Prince William Sound, a process that lasted until 1992, when the State of Alaska and the U.S. Coast Guard declared the clean-up complete. Exxon paid $1 billion in settlements with the state and federal governments. Virtually all Valdez compensatory damages were paid in full within one year of the accident, and the trial court commended Exxon for coming forward "with its people and its pocketbook and doing what had to be done under difficult circumstances."[citation needed] However, a $4.5 billion punitive ruling against Exxon is still under appeal. The punitive damages were set by a federal court judge in Anchorage, and have twice been vacated by the Ninth Circuit Court of Appeals as excessive. In 1998, Exxon and Mobil signed a US$73.7 billion definitive agreement to merge and form a new company called Exxon Mobil Corporation, the largest company on the planet. After shareholder and regulatory approvals, the merger was completed on November 30, 1999. In 2000, ExxonMobil sold a refinery in Benicia, California and 340 Exxon-branded stations to Valero Energy Corporation, as part of an FTC-mandated divestiture of California assets. ExxonMobil continues to supply petroleum products to over 700 Mobil-branded retail outlets in California. In 2005, ExxonMobil's stock price surged in parallel with rising oil prices, surpassing General Electric as the largest corporation in the world in terms of market capitalization. At the end of 2005, it reported record profits of US $36 billion in annual income, up 42% from the previous year (the overall annual income was an all-time record for annual income by any business, and included $10 billion in the third quarter alone, also an all-time record income for a single quarter by any business). The company and the American Petroleum Institute, the Oil and Chemical industry's lobbying apparatus, tried to downplay its success in order to avoid consumer criticism by putting up page-long ads in major American newspapers, such as The New York Times, The Washington Post, comparing oil industry profits to those of other large industries such as pharmaceuticals and banking. [11] [12] As an illustration, ExxonMobil's $36 billion in profits came on top of $370.6 billion in revenue, with a profit margin of 9.7%. In other words, Exxon netted 9.7 cents on each dollar of revenue it brought in. By contrast, Microsoft earned 30.8 cents for each dollar of revenue, and Google earned 23.9 cents for each dollar of revenue. Starbucks' profit margin was slightly lower than ExxonMobil's, at 7.8 cents for each dollar of revenue. Exxon's long-time mascot is a tiger; Mobil's mascot is a red pegasus which dates back to the late 19th century and is one of the oldest marketing symbols still in use. Corporate governanceThe current Chairman of the Board and CEO of Exxon Mobil Corporation is Rex Tillerson. Tillerson assumed the top position on January 1, 2006, on the retirement of long-time chairman and CEO, Lee Raymond, who received a highly controversial retirement and severance package of approximately $400 Million. Board of directorsCurrent Exxon Mobil board members are (January 29, 2007) :[13]
OrganizationExxonMobil is organized functionally into a number of global operating divisions. These divisions are grouped into three categories for reference purposes:
Operating divisions by category are as follows:
Upstream and Chemical operations are headquartered in Houston, Texas, and the downstream operations are headquartered at the heritage-Mobil headquarters in Fairfax, Virginia. Largest shareholdersAs of June 30, 2006:
ControversiesFunding of global warming skepticsExxonMobil has drawn criticism as a major funder of organizations campaigning against the scientific opinion that global warming is caused by the burning of fossil fuels. British newspaper The Guardian has reported that ExxonMobil has funded, among other groups skeptical of global warming, the Competitive Enterprise Institute, George C. Marshall Institute, Heartland Institute, Congress on Racial Equality, TechCentralStation.com, and International Policy Network.[2][3] The Union of Concerned Scientists released a report in 2007 finding that "ExxonMobil has funneled nearly $16 million between 1998 and 2005 to a network of 43 advocacy organizations that seek to confuse the public on global warming science."[4] The report argued that ExxonMobil uses disinformation tactics similar to those used by the tobacco industry in its denials of the link between lung cancer and smoking, saying that the company uses "many of the same organizations and personnel to cloud the scientific understanding of climate change and delay action on the issue."[4] These charges are consistent with a 1998 internal ExxonMobil strategy memo stating "Victory will be achieved when uncertainties in climate science become part of the conventional wisdom" for "average citizens" and "the media."[5] ExxonMobil's support for these organizations has also drawn condemnation by the Royal Society, the academy of sciences of the United Kingdom.[6] In August 2006, the Wall Street Journal [14][15] revealed that a YouTube video lampooning Al Gore, titled Al Gore's Penguin Army, appeared to be astroturfing by DCI Group, a Washington PR firm with ties to ExxonMobil as well as the Republican Party. In January 2007 the company appeared to change its position, when vice president for public affairs Kenneth Cohen said "we know enough now — or, society knows enough now — that the risk is serious and action should be taken." Cohen stated that as of 2006, ExxonMobil had ceased funding of the Competitive Enterprise Institute and "'five or six' similar groups". [16] On February 13 2007 ExxonMobil Chief Rex W. Tillerson acknowledged that the planet was warming while carbon dioxide levels were increasing, but in the same speech gave an unalloyed defense of the oil industry and predicted that hydrocarbons would dominate the world’s transportation as energy demand grows by an expected 40 percent by 2030. Tillerson stated that there is no significant alternative to oil in coming decades, and that ExxonMobil would continue to make oil and natural gas its primary products.[7] "I'm no expert on biofuels. I don't know much about farming and I don't know much about moonshine," he said. "There is really nothing [ExxonMobil] can bring to that whole [biofuels] issue. We don't see a direct role for ourselves with today's technology," he said.[8] Foreign business practicesInvestigative reporting by Forbes Magazine raised questions about ExxonMobil's dealings with the leaders of oil-rich nations." ExxonMobil controls concessions covering 11 million acres (44,500 km²) off the coast of Angola that hold an estimated 7.5 billion barrels (1.2 km³) of crude.[9] Forbes alleged that "ExxonMobil handed hundreds of millions of dollars to the corrupt regime of President José Eduardo dos Santos in the late 1990s.[10][11] [12][13] [14] In 2003, the Office of Foreign Assets Control reported that ExxonMobil engaged in illegal trade with Sudan and it, along with dozens of other companies, settled with the United States government for $50,000.[15] In March 2003, James Giffen of the Mercator Corporation was indicted, accused of bribing President Nursultan Nazarbayev of Kazakhstan with $78 million to help ExxonMobil win a 25 percent share of the Tengiz oilfield, the third largest in the world. On April 2, 2003, former-Mobil executive J. Bryan Williams was indicted on tax charges relating to this same transaction. The case is the largest under the Foreign Corrupt Practices Act.[16] This series of events is depicted in the film Syriana. In a U.S. Department of Justice release dated September 18, 2003, the United States Attorney for the Southern District of New York announced that J. Bryan Williams, a former senior executive of Mobil Oil Corporation, had been sentenced to three years and ten months in prison on charges of evading income taxes on more than $7 million in unreported income, "including a $2 million kickback he received in connection with Mobil's oil business in Kazakhstan." According to documents filed with the court, Williams' unreported income included millions of dollars in kickbacks from governments, persons, and other entities with whom Williams conducted business while employed by Mobil. In addition to his sentence, Williams must pay a fine of $25,000 and more than $3.5 million in restitution to the IRS, in addition to penalties and interest.[[17]] Valdez oil spill disasterThe March 24, 1989 Exxon Valdez oil spill was one of the most devastating man made environmental disasters ever to occur at sea. Exxon later removed the name "Exxon" from its tanker shipping subsidiary, which it renamed "SeaRiver Maritime." The renamed subsidiary, though wholly Exxon-controlled, has a separate corporate charter and board of directors, and the former Exxon Valdez is now the SeaRiver Mediterranean. The renamed tanker is legally owned by a small, allegedly under capitalized, stand-alone company, which would have minimal ability to pay out on claims in the event of a further accident.[17] In 2006 U.S. Congressman Dave Reichert (WA-08) demanded ExxonMobil begin paying punitive damages it owes to 33,000 fishermen, businesses and affected communities waiting compensation agreed to by ExxonMobil as part of a 12-year old court case settling the damages.[18] The U.S. Supreme Court let stand a $5 billion punitive damage verdict against ExxonMobil for its 1989 Exxon Valdez oil spill, rejecting without comment an appeal by the company on grounds of jury irregularities.[19] Human rights recordExxonMobil is the target of human rights activists for actions taken by the corporation in the Indonesian territory of Aceh. In June 2001 a lawsuit against ExxonMobil was filed in the Federal District Court of the District of Columbia under the Alien Tort Claims Act. The suit alleges that the ExxonMobil knowingly assisted human rights violations, including torture, murder and rape, by employing and providing material support to Indonesian military forces, who committed the alleged offenses during civil unrest in Aceh. Human rights complaints involving ExxonMobil's relationship with the Indonesian military first arose in 1992; the company denies these accusations and has filed a motion to dismiss the suit, which as of 2006 is still pending.[20] Financial Data
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