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Oil executives say soaring costs hurt them, too

 

Oil executives say soaring costs hurt them, too

WASHINGTON — Executives from the five biggest international oil companies on Wednesday said they are victims of high oil prices along with U.S. consumers, but Senate lawmakers showed little sympathy.

For the second time this year, executives from ExxonMobil, Chevron and three other big energy companies were called to testify before Congress to explain their swelling profits as gasoline prices hit a record average of $3.79 a gallon.

Executives testifying under oath before the Senate Judiciary Committee reiterated that crude oil markets — not profiteering at the gasoline pump — are the prime reason behind high prices.

“As repetitive and uninteresting as it may sound, the fundamental laws of supply and demand are at work,” said John Hofmeister, president of Shell Oil.

Prime drilling acreage in Alaska and the Outer Continental Shelf off the U.S. coast are off-limits, and international oil companies are at a growing disadvantage to government-owned companies such as Saudi Aramco and Venezuela’s PDVSA, executives said.

ExxonMobil, the No. 1 U.S. oil company, makes about 4 cents on every gallon of gasoline it sells in the USA, down from 10 cents in 2007, due mainly to higher oil costs, said Senior Vice President Stephen Simon.

Light sweet crude oil prices rose $4.19 to settle at $133.17 a barrel on the New York Mercantile Exchange on Wednesday.

Lawmakers appeared leery and sometimes hostile to executives’ testimony that crude oil prices are the primary reason for soaring gasoline prices. According to the U.S. Energy Information Administration, crude oil accounted for 73% of the pump price of gas in April. The percentage had lingered at about 50% until the recent run-up in the price of crude that started last fall.

“To me it was just a litany of complaints that you’re all just hapless victims of a system,” said Sen. Dianne Feinstein, D-Calif. “I don’t think you are, really.”

Chairman Sen. Patrick Leahy, D-Vt., asked the executives to disclose their 2007 salaries, and at least one executive was unable to answer.

“I know it’s a matter of public record. I do not know the exact amount,” said John Lowe, executive vice president of ConocoPhillips.

“Mr. Lowe, I wish that I made enough money that I didn’t have to know how much I made,” Leahy said. “Do you suppose you might be able to find out how much you make and let us know?”

Lowe said he would.

The oil company executives, which also include the U.S. subsidiary of BP, are scheduled to testify again today before a House panel.

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