Exxon Mobil turns profit to projects

After posting the largest annual profit by a U.S. company, it announces new global projects.

Associated Press
Published March 8, 2007

HOUSTON - Oil giant Exxon Mobil Corp. said Wednesday that it will spend some of its record profits on more than 20 new global projects in the next three years, investments expected to add 1-million oil-equivalent barrels a day to the company's volumes at peak production.

Exxon Mobil, the world's largest publicly traded oil company, also said its project inventory at the end of 2006 has the potential to develop 24-billion oil-equivalent barrels. The Irving, Texas, company produced about 4.2-million barrels of oil equivalent a day in 2006.

Chairman and chief executive Rex Tillerson said Exxon Mobil's capital spending would be about $20-billion a year through the end of the decade. The company's capital spending tab in 2006 was nearly $20-billion, up $2.2-billion from 2005.

"While opportunities and actual spending in any given year will likely vary depending on the pace and progress of individual projects, suffice it to say we expect very active levels of investment beyond the end of the decade," Tillerson told analysts during a presentation at the New York Stock Exchange.

Tillerson said the company, which produces about 3 percent of the world's oil, will continue to pursue projects in mature markets such as North America, Australia and the North Sea, as well as growth regions such as the Middle East, Russia and West Africa.

In South America, Tillerson said the company had 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.

Last week, Venezuelan President Hugo Chavez ordered by decree the takeover of oil projects run by foreign oil companies in the Orinoco region. He promised to occupy the fields in the region and fly the national flag over them by May 1.

Last month, Exxon Mobil posted the largest annual profit by a U.S. company - $39.5-billion - although its earnings for the last quarter of 2006 declined 4 percent to $10.25-billion.