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Despite Recession and Prices, Exxon Plans to Expand


Published: March 5, 2009

Wall Street is trading at its lowest level in more than a decade, some American automakers are on the verge of bankruptcy and the government is bailing out the nation’s biggest banks.

But in these troubled economic times, one big company is bucking the trend.

Exxon Mobil put on a show of strength on Thursday, pledging to increase investments in coming years, chiding rivals for mistimed acquisitions and reminding everyone it had the financial strength to make headway even as other companies pulled back.

“The question now becomes who can be successful in more challenging times,” Rex W. TillersonExxon’s chairman and chief executive, said at the company’s annual investor presentation at the New York Stock Exchange.

Mr. Tillerson had a ready answer for his own question. Exxon, based in Irving, Tex., earned $45 billion in 2008, gave back $40 billion to its shareholders, invested $26 billion around the world, and managed to find more oil than it produced. It also outperformed all of its rivals, like Chevron and Royal Dutch Shell.

Undaunted by a collapse in oil prices and the most severe global financial crisis since the 1930s, Exxon said it would dial up its investments over the next five years. It plans to spend as much as $150 billion through 2014.

Its oil and gas production, which was stagnant recently, is expected to grow 2 to 3 percent a year in the next five years, thanks in part to the company’s big natural gas projects in the Middle East.

Since 2004, Exxon has distributed $146 billion to its shareholders, either through dividend payments or share buybacks, more than was given back by Royal Dutch Shell, BP and Chevron combined.

Exxon recently said it would back a carbon tax instead of the current proposal in Washington for an emissions trading system to reduce the carbon dioxide emissions that are warming the planet. Mr. Tillerson said a carbon tax would be easier to collect and would allow businesses to make faster decisions on how to reduce emissions.

“A cap-and-trade system is going to be opaque to consumers and, I would argue, even to investors,” Mr. Tillerson said, using jargon for an emissions trading plan. “A carbon tax is a transparent cost.”

He said one of the biggest challenges that Exxon had faced in recent months was to protect its cash hoard of more than $31 billion from the market’s gyrations.

“We had to move very quickly on where we placed the cash,” he said.

Oil prices have dropped more than $100 a barrel since their peak last summer, but Mr. Tillerson seemed unmoved.

“We told our people to ignore all this noise about $100 oil,” he said. “We were not planning for a world of $100 oil, or $200 oil. We’re not having to huddle up or get on special meetings every other day. We really are making no adjustments to our business strategy. Around the house it feels pretty much business as usual.” and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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