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ExxonMobil - March 24th, 2006

ExxonMobil



Exxon-branded gas station in California (actually operated by Valero)

Type Public (NYSE: XOM)

Founded 1882 (in 1999, company took on current name)

Location HQ in Irving, Texas

Key people Chairman and CEO, Rex W. Tillerson

Industry Oil and Gasoline

Products Petrochemical products

Revenue $371 billion USD (2005)

Employees 88,300

Website www.exxonmobil.com

Exxon Mobil Corporation or ExxonMobil (NYSE: XOM) is the largest price gouging oil producer and distributor in the world, formed on November 30, 1999, by the merger of Exxon and Mobil. By some measures, it is the largest publicly traded company in the world. Its operating profit in 2005 was $36.13 billion (an all-time record for any publicly traded company), slightly less than the gross domestic product of Azerbaijan, while its revenues were larger than the GDP of Saudi Arabia. Its headquarters are in Irving, a suburb of Dallas, Texas. The merger of Exxon and Mobil is symbolic in American history because it once again consolidated the two largest companies (Standard Oil Company of New Jersey/Exxon and Standard Oil Company of New York/Mobil) of John D. Rockefeller's Standard Oil trust. Exxon Mobil is a component of the Dow Jones Industrial Average.

The current ExxonMobil is the parent of Exxon, Mobil, and Esso companies around the world and is the largest oil company in the world by profit and market value.


Name

Exxon formally replaced the Esso, Enco, and Humble brands on January 1, 1973, in the USA. The name Esso, pronounced S-O, attracted protests from other Standard Oil spinoffs because of its similarity to the name of the parent company, Standard Oil. Hence, the company was restricted from using Esso in the USA except in those states awarded to it in the 1911 Standard Oil antitrust settlement. In states where the Esso brand was blackballed, the company marketed its gasoline under the Humble or Enco brands. The Humble brand was used at Texas stations for decades as those operations were under the direction of Jersey Standard affiliate, Humble Oil, and in the mid-to-late 1950s expanded to other Southwestern states including New Mexico, Arizona and Oklahoma.

In 1960, Jersey Standard gained full control of Humble Oil and Refining Co. and, through a reorganization of the company, restructured Humble into Jersey's domestic marketing and refining division to sell and market gasoline nationwide under the Esso, Enco and Humble brands. The Enco brand was introduced by Humble in 1960 at stations in Ohio but was soon blackballed after Standard Oil of Ohio (Sohio) protested that Enco (Humble's acronym for "ENergy COmpany) sounded and looked too much like Esso as it shared the same oval logo with blue border and red letters with the two middle letters the only difference. At that point, the stations in Ohio would be rebranded Humble until the name change to Exxon in 1972.

After the Enco brand was discontinued in Ohio, it was moved to other non-Esso states. In 1961, Humble stations in Oklahoma, New Mexico and Arizona were rebranded as Enco and the Enco brand appeared on gasoline and lubricant products at Humble stations in Texas that same year with service stations there changed to Enco in 1962. By that time, Jersey had expanded the Enco brand to stations in the Midwest and Northwest that had been operated by various subsidaries such as Carter, Pate and Oklahoma among others.

In 1963, Humble was approached by Tidewater Oil Company, a major gasoline marketer along the eastern and western seaboards, to purchase the firm's refining and marketing operations on the west coast, a move that would have given Humble a large number of existing stations and a refinery in California, which was then the fastest-growing gasoline market. However, the Justice Department objected to Humble's plan to purchase Tidewater's west coast operations, which were later sold to Phillips Petroleum in 1966. Meanwhile, Humble gradually built up new and rebranded service stations in California and other western states under the Enco brand and purchased a large number of stations from Signal Oil Company in 1967, followed by the opening of a new refinery Benicia, California in 1969.

In 1966, the Justice Department ordered Humble to "cease and desist" from using the Esso brand at stations in several Southeastern states following protests from Standard Oil of Kentucky (a Standard Oil of California subsidiary by that time and in the process of rebranding the Kyso stations as Chevron). By 1967, stations in each of those states were rebranded as Enco.

Despite the success of the "Put A Tiger In Your Tank" advertising campaign introduced by Humble in 1964 to promote its Enco/Esso Extra gasolines, the similar logotypes, use of the Humble name in all Esso/Enco ads and the uniformity in design and products of Humble stations nationwide, the company still had difficulties promoting itself as a nationwide gasoline marketer competing against truly national brands such as Texaco - then a 50-state marketer and the only company selling products under one brand name in each state. Humble officials realized by the late 1960s that the time had come to swallow its pride by developing a new brand name that could be used nationwide throughout the U.S. At first, consideration was given to simply rebranding all stations as "Enco" but that was shelved when it was learned that "Enco" is a Japanese abbreviation of "engine failure." (エンジン故障, enjinkoshou)

In order to create a unified brand, the company changed its corporate name from Jersey Standard to Exxon, rebranding all its U.S. stations under the latter title in the summer and fall of 1972 following the successful test marketing of the Exxon brand and logo in late 1971 and early 1972 at rebranded Enco/Esso stations in certain U.S. cities. However, the unrestricted international use of the popular brand Esso prompted the company to continue using Esso outside of the USA. Esso is the only widely used Standard Oil brand left in existence. Other Standard Oil descendants, such as BP and Chevron, do however maintain a few stations with the Standard Oil brand in specific states in order to retain their trademarks and prevent others from using them.

The rectangular Exxon logo with the blue strip at the bottom and red lettering with the two "X's" interlinked together was designed by noted industrial stylist Raymond Loewy. The interlinked "X's" are incorporated in the modern-day ExxonMobil corporate logo, but the original Exxon sign continues for marketing efforts and station signage.

History

Both Exxon and Mobil were descendants of the old John D. Rockefeller monopoly, Standard Oil. In 1911, after a United States Supreme Court ruling which upheld a federal court order to dissolve it, the Standard Oil Trust was split into 34 companies. Two of these companies were Jersey Standard, which eventually became Exxon, and Socony ("Standard Oil Company of New York"), which eventually became Mobil.

In the same year, the nation's kerosene output was eclipsed for the first time by gasoline. The growing automotive market inspired the product trademark Mobiloil, registered by Socony in 1920.

Over the next decade, both companies grew significantly. Jersey Standard acquired a 50 percent interest in Humble Oil & Refining Co., a Texas oil producer. Socony purchased a 45 percent interest in Magnolia Petroleum Co., a major refiner, marketer and pipeline transporter. In 1931, Socony merged with Vacuum Oil Co., an industry pioneer dating back to 1866 and a growing Standard Oil spin-off in its own right.

In the Asia-Pacific region, Jersey Standard had oil production and refineries in Indonesia but no marketing network. Socony-Vacuum had Asian marketing outlets supplied remotely from California. In 1933, Jersey Standard and Socony-Vacuum merged their interests in the region into a 50-50 joint venture. Standard-Vacuum Oil Co., or "Stanvac," operated in 50 countries, from East Africa to New Zealand, before it was dissolved in 1962.

Mobil Chemical Company was established in 1960. As of 1999 its principal products included basic olefins and aromatics, ethylene glycol and polyethylene. The company produced synthetic lubricant base stocks as well as lubricant additives, propylene packaging films and catalysts. Exxon Chemical Company became a worldwide organization in 1965 and in 1999 was a major producer and marketer of olefins, aromatics, polyethylene and polypropylene along with specialty lines such as elastomers, plasticizers, solvents, process fluids, oxo alcohols and adhesive resins. The company was an industry leader in metallocene catalyst technology to make unique polymers with improved performance.

In 1955 Socony-Vacuum became Socony Mobil Oil Co. and in 1966 simply Mobil Oil Corp. A decade later, the newly incorporated Mobil Corporation absorbed Mobil Oil as a wholly owned subsidiary. Jersey Standard changed its name to Exxon Corporation in 1972 and established Exxon as a trademark throughout the United States. In other parts of the world, Exxon and its affiliated companies continued to use its Esso trademark.

On March 24, 1989, shortly after midnight, the oil tanker Exxon Valdez struck Bligh Reef in Prince William Sound, Alaska, spilling more than 11 million gallons (42,000 m³) of crude oil. The spill was the largest in U.S. history, and in the aftermath of the Exxon Valdez incident U.S. Congress passed the Oil Pollution Act of 1990. At the time of the spill, Exxon paid $300 million immediately and voluntarily to more than 11,000 Alaskans and businesses affected by the Valdez spill. In addition, the company paid $2.2 billion on the cleanup of Prince William Sound, staying with the cleanup from 1989 to 1992, when the State of Alaska and the U.S. Coast Guard declared the cleanup complete. Exxon also has paid $1 billion in settlements with the state and federal governments. Virtually all Valdez compensatory damages were paid in full within one year of the accident, and the trial court commended Exxon for coming forward "with its people and its pocketbook and doing what had to be done under difficult circumstances." However, Exxon has yet to pay up for the largest punitive ruling against it, which is currently set at $4.5 billion, as the assessment is under appeal. The punitive damages were set by a Federal court judge in Anchorage,and have twice been vacated by the Ninth Circuit Court of Appeals as excessive.

In 1998, Exxon and Mobil signed a US$73.7 billion definitive agreement to merge and form a new company called Exxon Mobil Corporation, the largest company on the planet. After shareholder and regulatory approvals, the merger was completed November 30, 1999 (the deal was announced the next day).

In 2000, ExxonMobil sold the Benicia, California, refinery and 340 Exxon-branded stations to Valero Energy Corporation, as part of an FTC-mandated divestiture of California assets. ExxonMobil continues to supply petroleum product to over 700 Mobil-branded retail outlets in the state.

In 2005, its stock price surged in parallel with rising oil prices, surpassing General Electric as the largest corporation in the world in terms of market capitalization. At the end of 2005, ExxonMobil reported record profits, reporting U.S$36 billion in annual income, up 42% from last year. The company and the American Petroleum Institute, the Oil and Chemical industry's lobbying apparatus, however tried to downplay its success in order to avoid criticism from consumers by putting up page-long ads in major American newspapers, such as The New York Times, The Washington Post, comparing Oil Industry profits to that of other large industries such as pharmaceuticals and banking. [1] [2]

Exxon's long-time mascot is a Tiger; Mobil's mascot is a Pegasus which dates back to the late 19th century and is one of the oldest marketing symbols still in use.

ExxonMobil now has the most assets in the world, and generated 246.7 billion dollars in total revenue for 2003.

Allegations against ExxonMobil

ExxonMobil's activities in the Indonesian territory of Aceh, where the company extracts and exports natural gas, have attracted scrutiny. In June 2001, ExxonMobil became the target of a lawsuit in the Federal District Court of the District of Columbia, under the Alien Tort Claims Act. The suit alleged that the company knowingly assisted human rights violations, including torture, murder and rape, by employing and providing material support to Indonesian military forces, who committed the alleged offenses in Aceh. Human rights complaints involving ExxonMobil's relationship with the Indonesian military first arose in 1992; numerous inquiries have found evidence of human rights violations on ExxonMobil property and/or committed by Indonesian troops guarding ExxonMobil facilities. The company denies these accusations and filed a motion to dismiss the suit, which is still pending as of 2005. The U.S. State Department filed an opinion in the case in July 2002, requesting that the suit, brought by the International Labor Rights Fund, be dismissed on national security grounds. [3]

ExxonMobil controls concessions covering 11 million acres (44,500 km²) off the coast of Angola that hold an estimated 7.5 billion barrels (1.2 km³) of crude. [4] Questions have been raised about ExxonMobil's actions in securing these concessions—Forbes Magazine alleging that "ExxonMobil handed hundreds of millions of dollars to the corrupt regime of President José Eduardo dos Santos in the late 1990s". [5]

In 2003, the Office of Foreign Assets Control reported that ExxonMobil engaged in illegal trade with Sudan and along with dozens of other companies had to settle with the United States government for US$50,000 [6].

Image:Parody-of-esso-logo.jpg
Parody of Esso logo produced for the Stop E$$O campaignExxonMobil is regarded by many environmental activists as an example of utter corporate irresponsibility and disregard for environmental concerns by US-based corporations. The company has been a target for a number of political campaigns, including the Stop Esso campaign, held by Greenpeace, Friends of the Earth and People and Planet, and aimed at boycotting Esso. These organisations commonly parody the company's brandname as "E$$O", an example of alternative political spelling, to indicate their belief that the company is only interested in short-term profit, and is willing to use its financial power to buy influence. A new environmental movement in the form of Exxpose Exxon has emerged to highlight ExxonMobil's stances on global warming, alternative energies, as well as lack of reparations yet awarded to the native americans affected by the Exxon Valdez oil spill in Alaska. Unlike other major oil companies such as Royal Dutch Shell and BP, Exxon is one of the few that has actively fought the Kyoto Protocol and disputed scientific opinion on global climate change. Exxon-Mobil is highly criticized for funding climate change research, decried by environmentalists as "junk science," such as the work of the Oregon Institute for Science and Medicine, a grand sounding institution having only a handful of employees and volunteers [7]. ExxonMobil has also been a leading campaigner in the yet-unsuccessful bid to open the Arctic National Wildlife Refuge to oil drilling, a move that environmentalists say will destroy the region's fragile ecology.

Greenpeace has been campaigning against Esso for many years and its main reasons for doing so include ExxonMobil's position on the issue of climate change. Greenpeace claims that ExxonMobil has flatly refused to believe that the burning of fossil fuels has any negative effect on the environment or climate change as a whole, despite these theories being accepted by most of the scientific community.

Kelloggs sued Exxon based on a claim that the Tiger mascot looked like Tony the Tiger.

Diversity

ExxonMobil received a 14% rating from the Human Rights Campaign's Corporate Equality Index in 2004. The company had previously lost points because after the merger it failed to adopt some of the LGBT-friendly policies previously put into place at Mobil. Moreover, sexual orientation was taken off the list of protected classes in the ExxonMobil non-discrimination policy following Mobil's merger with Exxon, and when the issue was put to a vote of shareholders, a supermajority of shareholders (more than 70%) rejected proposals to reinstate sexual orientation as a specific type of prohibited discrimination.

Domestic partner benefits were ended following Mobil's merger with Exxon. Mobil employees who already had DP benefits were allowed to keep them, but other employees could not add their DPs to the benefit plans after the merger. ExxonMobil does offer DP benefits in countries where same-sex marriage is legal.


Corporate governance

The current Chairman of the Board and CEO of Exxon Mobil Corporation is Rex Tillerson. Tillerson assumed the top position on January 1, 2006 on the retirement of long-time chairman and CEO, Lee Raymond.

Board of directors

Current Exxon Mobil board members are:

Michael Boskin
William W. George
James R. Houghton
William R. Howell
Reatha King
Philip Lippincott
Henry McKinnell, Jr.
Marilyn Nelson
Walter Shipley

External links

General information

ExxonMobil corporate website
Exxon USA website
Mobil global website
Esso global website
History of Standard Oil spinoffs and their brands
Exxonmobil entry at Knowmore.org

ExxonMobil responses to issues

ExxonMobil Web Page on Business Ethics & Standards
ExxonMobil Web Page on Climate Change
ExxonMobil Web Page on Domestic Partner Policies
ExxonMobil Web Page on Valdez Oil Spill

Funding given by ExxonMobil

Exxon's list of funded organizations.
ExxonMobil's Corporate political contributions
Greenpeace's list of organizations that have received funds from Exxon, with evidence of that funding.
Mother Jones' overview, May 2005, "Put a Tiger In Your Think Tank"

Anti ExxonMobil Websites

Stop Esso
ExxposeExxon
Greenpeace UK's page on Esso
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