Exxon Mobil Corporation: A Global Energy Giant

Exxon Mobil Corp, one of the largest publicly traded petroleum and petrochemical corporations globally

ExxonMobil is one of the largest integrated fuels, lubricants and chemical companies in the world. It is also one of the biggest publicly traded petroleum and petrochemical corporations globally. It manages an industry-leading portfolio of resources and global brands like Exxon, Esso and Mobil, that “fuel modern transportation, power cities, lubricate industry and provide petrochemical building blocks that lead to thousands of consumer goods”.

A 140 year old history

The history of Exxon Mobil Corp is deeply rooted in the formation of the Standard Oil Company (Ohio) by John D. Rockefeller and his associates in 1870. Standard Oil quickly rose to prominence, becoming the largest oil refiner in the world. The company was named “Standard” to symbolise its commitment to high, uniform quality in its products.

In 1879, Standard Oil expanded its reach by purchasing a ¾ interest in Vacuum Oil Company for $200k. Vacuum Oil was a pioneer in the lubricants industry, introducing popular products like the revolutionary Gargoyle 600-W Steam Cylinder Oil.

1882 was a significant year for Standard Oil as it lubricated Thomas Edison’s first central generating system, marking its involvement in pioneering technological advancements. In the same year, the Standard Oil Trust was established, comprised of the Standard Oil Company of New Jersey (Jersey Standard) and the Standard Oil Company of New York (Socony), emphasising its dominance in the oil industry.

However, in 1911, a landmark U.S. Supreme Court decision mandated the breakup of Standard Oil into 34 unrelated companies, including Jersey Standard, Socony, and Vacuum Oil. This decision marked the end of the original Standard Oil Trust but set the stage for the future development on those entities. The same year, Jersey Standard’s gasoline sales exceeded those of kerosene for the first time, signalling the rising importance of gasoline as a product.

Jersey Standard continued to grow, acquiring a 50% interest in Humble Oil & Refining Company of Texas in 1919. In 1926, Jersey Standard introduced a new fuel blend under the trade name Esso, derived from the phonetic rendition of the initial’s ‘S’ and ‘O’ in Standard Oil. This brand would become one of the most recognised names in the oil industry.

By 1958, Exxon Mobil (formerly Vacuum Oil) was supplying aviation fuel for Pan American Airways’ first trans-Atlantic Boeing 707 flight from New York to London, further cementing its presence in the aviation industry. In 1966, Vacuum Oil, now known as Mobil Oil Corporation, celebrated its centennial and launched a new identity program to emphasise the Mobil brand name. In 1972, Jersey Standard officially changed its name to Exxon Corporation, a change approved by its shareholders.

In 1999, Exxon and Mobil went on to merge to form Exxon Mobil Corporation, creating a global energy giant capable of competing more effectively in what was and continues to be a fiercely competitive industry. The merger was a strategic move to strengthen the company’s global operations and boost its competitiveness.

Exxon Mobil today

Today, Exxon Mobil has a market capitalisation of
$524.83 billion, with a revenue of $345.14 billion. It is listed on the New York Stock Exchange under the ticker symbol #XOM. The company is said to employ 62,000 people comprised of scientists, engineers, researchers, technicians, professionals and other employees, and has operations in 60+ countries around the world.

Exxon Mobil is not without controversy though. As recently as March 2024, the company was accused of ‘greenwashing’ over carbon capture plan it allegedly failed to invest in, according to The Guardian.  Moreover, Exxon Mobile has faced longstanding accusations of misleading the public about its role in climate change and the dangers of burning fossil fuels. However, the company, like many others, say they’re trying to eliminate or offset their greenhouse has emissions by mid-century.

ExxonMobil announces second-quarter 2024 results

On 2 August 2024, Exxon Mobil Corporation announced “2^nd-quarter 2024 earnings of $9.2 billion, or $2.14 per share assuming dilution. Cash flow from operating activities was $10.6 billion and cash flow from operations excluding working capital movements was $15.2 billion. Shareholder distributions of $9.5 billion included $4.3 billion of dividends and $5.2 billion of share repurchases, consistent with the company’s announced plans.”

Key financial highlights

Exxon Mobil ‘s year-to-date earnings were $17.5 billion, down from $19.3 billion in the first half of 2023, due to lower refining margins and natural gas prices. Strong growth from key assets and cost savings helped offset these declines. The company achieved $10.7 billion in cumulative cost savings versus 2019 and generated $25.2 billion in cash flow from operations. Shareholder distributions totalled $16.3 billion, with an increased share repurchase plan of $20 billion annually through 2025. The debt-to-capital ratio was 14%, with capital expenditures reaching $12.9 billion year-to-date, expected to total $28 billion for the year.

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Disclaimer: This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.

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