Oil profits unsurprising after record gas prices, N.C. experts say

Posted October 30, 2008

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— North Carolina experts said that after record-high gas prices, reports of record-high profits by oil companies should also be expected.

Exxon Mobil Corp., the world's largest publicly traded oil company, reported income Thursday that shattered its own record for the biggest profit from operations by a U.S. corporation, earning $14.83 billion in the third quarter.

The Irving, Texas-based company reaped massive earnings from exploration and production, where net income rose 48 percent to $9.35 billion. Higher oil and natural gas prices propelled results, even though production was down from the third quarter a year ago.

During that quarter, retail gas prices hit around $4 a gallon nationally, but since July, crude oil prices have fallen 56 percent off their record highs.

Some drivers said that they were outraged that they were paying record-high prices while oil companies reaped profits.

"It just gets me so made, makes my blood boil," motorist John Tremper said, while filling up his tank at an Exxon station.

"They made all that kind of money, and people here are losing their jobs," driver Melvin Sutton said. "There's more to it than making a profit. They need to share some of it."

Other drivers, however, were more sanguine about Exxon's profits.

"It's a business. They got to make money. They go to pay for the rigs they build," motorist Scott Bennett said.

North Carolina oil-industry experts pointed out that only 1.5 percent of Exxon's shares are owned by company management and said the oil giant's profits benefit a broader base of people than most assume.

"The oil companies are not owned by space aliens," Bill Weatherspoon, executive director of the N.C. Petroleum Council, said. "They're owned by ordinary, everyday citizens who are teachers, firefighters, state employees."

Weatherspoon said that Exxon makes a profit of 10.8 cents on every dollar in revenue – contrasted to 29 cents on the dollar for Microsoft, 20.8 cents for Johnson & Johnson and 19.4 cents for Coca-Cola.

"There are many more entities that are much more profitable than the oil companies," Weatherspoon said.

But those oil profits are more publicly scrutinized than companies like IBM or Microsoft, the director said said, because "we are very visible. We are part of everybody's daily purchases."

Weatherspoon said that ExxonMobil "regularly reinvests" its profits into exploration and cleaner burning fuels.

Some drivers, though, suggested other ways that Exxon could use its profits.

"It's ridiculous. It's such a big rip-off," Tremper said. "They should take that money and turn around and lower these gas prices."


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  • colliedave Oct 31, 2008

    We can go back to walking and using horses, burning wood to heat our homes.

    And what do horses leave by the sides of the road? And with the cost of corn/wheat/hay going up feeding and caring for a horse isn't cheap. And isn't the poor economy forcing people to turn in Fido/Fluffy? And burning wood is a no-no since it causes smog and adds to supposed global warming. Can't use coal for the same reason.

  • whatelseisnew Oct 31, 2008

    for the past three years Exxon Mobil's tax bill has averaged over $27 billion a year. Now that is just Corporate taxes on profits. Consider the additional taxes that flood in from all the jobs and other businesses, that feed off of the oil industry and natural gas industry, including the Fuel tax you pay when you fill your car tank, the taxes you pay on your natural gas at home and so on. I do not know what the total is, but it is pretty staggering. So let's shut them down. We can go back to walking and using horses, burning wood to heat our homes. The Feds and the State can extract that tax money somewhere else. Maybe from a defunct Airline or Financial institution.

  • flyfishNC Oct 31, 2008

    The guy whining was at an Exxon filling his tank!!! Buy shares in Exxon stock, fill the tank and move on.

  • lizard Oct 31, 2008

    I'm glad they're profitable. I'm tired of bailing out companies.

    How much tax did the gov't collect during that quarter? Let's talk about that. The gov't does nothing for that tax money and they reap the profit. And continue to spend.

  • Realthoughts Oct 30, 2008

    I have nothing against corporations making a profit. What I have a problem with is a corporation that can't explain to me why when it's cost for crude oil goes up, prices go up two, three times a day at the pump. However when crude oil prices go down it takes weeks, if not months for prices at the pump to go down. Then turn around and post a record Profit!

    Tell me how the high price over the last several months has helped our economy. As the price of groceries go up, cost of services go up, cost of doughnuts go up, and all mostly due to fuel cost. Just how is Exxon's record profit helping all this?

    Oh, that's right, they have no responsibly to the economy. They're just in for the profit and that's okay, not matter how many families it affects.

  • geosol Oct 30, 2008

    Hey, you know what those poor old oil companies need now?? Some more huge Republican tax breaks, that's what!!!! Time to redistribute your wealth some more and help them make even MORE money!!


  • shep8851 Oct 30, 2008

    not surprising--that is an understatement. Given the spineless, greedy nature of our congress ( Dems and Reps), its amazing that the profits are not higher. Problem is that the Left wing liberals ( Pelosi, Reed, et al) do not want to do anything to fix it. They talk of a solution 5 or 10 years down the road--the American people need help and relief NOW. I for one an voting against any and ever Federal incumbent I can find-we got to have some new and clean blood in Congress...

  • whatelseisnew Oct 30, 2008

    Amazing attitudes by people. guess they prefer that all businesses go bankrupt. That will sure provide a lot of jobs. Hey you do not like the 4 dollar gas, you can walk, you can run, you can ride a bike, you can take a bus. I applaud Exxon, they provide a lot of good jobs, they pay out nice dividends on their stock. They continue to search for more sources of crude and natural gas, they pay tons in taxes. You want to be mad at someone, be mad at the Federal Government: included in the price of that gas is the taxes that Exxon has to pay, plus the highway fuel tax. They do nothing for it.

  • bigDAWGeats Oct 30, 2008

    Made money on that investment but I sold it two weeks quarter investors will probably break even...401ks, pensions and individual investments(in other words American citizens) own big oil..about 84%