The oil market collapse, which has claimed thousands of Houston jobs and devastated the city’s petroleum industry, is practically a comfort zone for ExxonMobil Corp.
As The Houston Chronicle reports, the giant oil company based in the Dallas suburb of Irving has thus far escaped the worst of the downturn, watching from behind a fortress of cash as its rivals scrap major drilling projects and cut deep into budgets and payrolls.
But it isn’t corporate voodoo that has kept ExxonMobil levitating above all of the turmoil. The company’s structure and culture help it ride out price busts, which almost always follow times of plenty in the global oil market.
Among its largest rivals, ExxonMobil makes the most money and produces the most oil for every dollar it spends, and it puts out the biggest bounty of oil and natural gas—both in absolute terms and for every worker it employs.
Even in good years, its senior managers are required to cut costs out of the business, and it gets more from its expensive projects than all of its Big Oil competitors.
Through the boom that began in the last decade and the oil price bust that began last year, ExxonMobil has led its rivals in efficiency. And that’s made ExxonMobil stand out since summer 2014, when U.S. crude began falling from more than $100 a barrel to less than half of that currently, and sent much of the industry into near-crisis.
The company has avoided mass layoffs, even as its rivals Chevron, Shell and BP plan to cut a combined 18,500 jobs this year.
Despite its resilience, it could soon face trouble on a different front. New York’s attorney general last week launched an investigation into whether ExxonMobil covered up research it had funded that predicted the dangers of climate change decades ago. ExxonMobil denies such allegations.
The company has cut its budget by a few billion dollars, but relative to its size, it has taken a scalpel where others have swung an ax, finding more to cut from operational costs than capital spending.
Read the full story (subscription may be required).
