Behavior reveals…oil company priorities
ExxonMobil bought back $29 billion of its own stock in 2006, $28 billion in 2007 and has already bought back $16 billion in the first half of 2008. Even so, it reports $39 billion in cash on hand and is all but certain to report more than $40billion in profit, along with $32 billion in stock buybacks, for all of 2008.
For instance, Exxon refuses to help pay for a pipeline to transport plentiful Alaskan natural gas that goes unused, demanding a better tax deal from the state. It backed out of a deal with Qatar last year to turn natural gas into diesel fuel. It spends nothing on production or development of renewable energy.
Unlike U.S.-based companies, Shell initially reports its profit percentage as return on capital. Its 24.5% figure shows how profitable the oil business actually is, said Consumer Watchdog. Exxon and others will initially spin their profit as a percentage of revenue, a smaller and grossly misleading figure. Last year, Exxon reported to major investors and the SEC that its return on capital was nearly 32%.
As a recent AP story based on Pew Center research noted, the five biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, while investments in new oil have stayed in single digits.
Obviously the debate heard in the offices of Exxon are different than the ones in the media or the campaign.