HOUSTON Exxon Mobil, the largest U.S. energy company, posted Monday the highest profit in U.S. corporate history, amplifying concerns over the good fortune of oil companies while soaring energy prices pressure consumers.
"This might be the best macroeconomic environment ever for oil," said Dave Pursell, a partner at Pickering Energy Partners, Houston-based research firm. "More than any of its peers, Exxon knocked the cover off the ball with its long, disciplined view of global projects."
Exxon's performance last year allowed it to surpass Wal-Mart as the largest company in United States, and by some measures Exxon became richer than some of world's largest oil-producing nations. For instance, its revenue of $371 billion surpassed the gross domestic product of $245 billion of Indonesia, an OPEC member and the world's fourth most populous country with 242 million people.
Exxon posted a net profit of $10.71 billion for the fourth quarter, up from $8.42 billion a year earlier. The result topped Exxon's previous record for quarterly profit, $9.92 billion in the third quarter of 2005.
"Exxon is the most efficient operator in a market characterized by rampant demand and lagging supply growth," said Derek Vogler, a fund manager at Country Trust Bank in Bloomington, Illinois.
Profit in 2005 reached $36.13 billion on revenue of $371 billion.
The annual profit easily surpassed the previous record of $25.3 billion, which Exxon had also set in 2004, according to Howard Silverblatt, senior index analyst at Standard & Poor's in New York. Only Ford Motor's profit of $22 billion in 1998 resemble Exxon's success in recent memory, Silverblatt said.
The company's quarterly revenue rose to $99.66 billion from $83.37 billion a year ago but was less than the $100.72 billion Exxon posted in the third quarter, the first time a U.S. public company generated more than $100 billion in sales in a single quarter.
Shares in Exxon rose $1.82, or 3 percent, to close at $63.11 in New York after the company's results beat Wall Street expectations.
Even as investors applauded Exxon's new chief executive, Rex Tillerson, who replaced Lee Raymond at the start of this year, its results masked potentially weaker profits if oil and gas prices begin to decline.
Production at Exxon's oilfields around the world declined 1 percent in 2005, excluding stoppage at platforms in the Gulf of Mexico from last year's hurricanes, illustrating an industry-wide dilemma: an inability to tap into the world's richest oil exploration areas in the Middle East and Venezuela because of political limitations.
"Lack of access to new reserves is the most important problem Exxon and the other large oil companies are facing," said Michael Economides, a professor of chemical engineering at the University of Houston. "It should make them paranoid about the future."
Major oil producers like BP and Chevron are exploring more remote areas of the globe and drilling wells to record depths to bolster production as older fields in North America and the North Sea near exhaustion.
Exxon will this year tap new oil fields holding an estimated 1.75 billion barrels, or 34 percent of all the new projects by publicly traded oil companies scheduled for 2006, according to analysts at Deutsche Bank.
However, political uncertainties in oil-rich nations also worked in Exxon's favor recently, as concern over Iran's nuclear ambitions and tension in Nigeria and Venezuela kept oil prices high.
Crude oil prices have doubled in the last two years, driven by strong demand in rising economies of Asia and in the United States. Oil for March delivery rose by 59 cents to close at $68.35 a barrel in New York trading.
The stellar earnings brought fresh criticism of the energy industry in Congress on Monday.
"The federal government has a responsibility to make sure that these companies continue to innovate instead of just profiting from the status quo," said Senator Charles Schumer, Democrat of New York. "These companies should be investing in developing new sources of fuel and new technologies."
Senator Barbara Boxer, a California Democrat who sharply criticized oil executives appearing before the U.S. Congress in November, spoke on the subject again Friday. She called on the administration of George W. Bush and the U.S. Federal Trade Commission to "put an end to gouging," then suggested that FTC stood for "Friend to Chevron."
But John Felmy, chief economist for the American Petroleum Institute, a Washington-based trade group, said Monday that the political rhetoric was "not a case based on fact."
"We invested somewhere in the order of $86 billion last year," Felmy said. "Then we have to treat investors appropriately, otherwise we'd have the Eliot Spitzers of the world coming after us."
The results for the latest quarter included a $390 million gain related to a litigation settlement.
Excluding special items, earnings were $10.32 billion. By segment, exploration and production earnings rose sharply to $7.04 billion, up $2.15 billion from a year earlier, reflecting higher crude oil and natural gas prices.
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