Exxon Mobil's Access Challenge

Demand has certainly been sluggish,off 2-2.5%,Exxon Mobil CEO Rex Tillerson observed.Globally,demand is about where we expected it to be.Part of what we're seeing is,the supply fundamentals are very strong now.
Our move into XTO Energy was recognition on our part of how significant unconventional resources are.We have to go out,have access to acreage and drill so we can support the economy.We spend in operating costs over a billion dollars a day.
Two-thirds of the remaining oil and 40% of natural gas lies under federal land we have no access to.The key issue is,the government controls access.
All we're looking for is tax treatment that's equal across all industries.Loopholes and subsidies are patches to fix a defect in the tax system.Let's clean all that up.
I'm not as optimistic as I was six months ago.I think the economy is gonna be sluggish in this country.Globally,we're gonna have positive growth,but it's not gonna be as robust as we had hoped.
Other governments also control access to resources.The difference is,they ask how can we get this drilling done,Rex Tillerson remarked bitterly.
Exxon Mobil recently signed an agreement with Russian oil titan Rosneft on a joint venture for exploration and production in Russia and globally.The Strategic Cooperation Agreement was signed on August 30 in Sochi,Russia in the presence of Russian Prime Minister Vladimir Putin and Mr.Tillerson.The two companies have been working together for at least 15 years.
Exxon Mobil(XOM)

Big Projects,Long Lead Times

Exxon Mobil's(XOM) investment levels have grown from year to year,CEO Rex Tillerson noted,but when resources are ready to be developed,new technologies are often required.In consequence,a very large and complex project may be delayed for 10 years before Exxon invests in it.Exxon's shareholders have been paid ever-growing dividends,and have benefited from over 118 billion dollars U.S. in share repurchases over the past several years.Exxon's income taxes have increased at a faster rate than its profits.It paid an effective tax rate of 44% in 2007.Shareholders will be hurt by new taxes,and ultimately the consumers will have less energy resources because of them.Taxes are part of the economic analysis of whether you can take a risk and invest.Much of the technology lets Exxon manage the risk of the resource and the care of the environment.Exxon is a huge consumer of commodities itself,but it is built to be the most efficient,regardless of the economic conditions that swirl around Exxon,Mr.Tillerson observed.

Inside Exxon Mobil

According to Exxon Mobil(XOM) CEO Rex Tillerson,Exxon has a robust,very deep portfolio of opportunities,yet the very high cost environment is beginning to show up in its projects.Exxon's management systems help it mitigate about a third of the cost pressures through technology,project planning and execution.You have to grow a business organically,but where it makes sense,Exxon is always evaluating acquisitions.It has a unique capability to integrate them and benefit its shareholders.The high price of oil is partly due to the weakness of the U.S. dollar.That amounts to a third of the disconnect with supply and demand.Geopolitical uncertainties and speculation also contribute to the disconnect,Mr.Tillerson said.