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Archive for Friday, August 5, 2005

Exxon Mobil CEO to retire

Company’s president expected to take helm

August 5, 2005

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— Exxon Mobil Corp. Chairman and Chief Executive Lee R. Raymond will retire at the end of this year from the world's largest publicly traded oil company, the company said Thursday.

The company said the board of directors expects to name company President Rex W. Tillerson, 53, as Raymond's successor in both posts. The change is part of the board's succession plan developed years ago, the company said.

With oil and natural gas prices - not to mention Exxon Mobil's profits - soaring, and energy demand rising around the globe, Tillerson will be handed a company that is poised for continued short- and long-term success, analysts said. Exxon Mobil earned $25.3 billion in 2004 and nearly $15 billion in the first half of 2005.

Aside from maintaining this financial track record, the greatest challenge for Exxon Mobil going forward, analysts said, will be to expand its reserve base at a time when finding and gaining access to huge new reservoirs of oil is not as easy as it once was.

Lee Raymond, Exxon Mobil Corp. chairman and chief executive officer, announced Thursday that he would retire at the end of the year from the helm of the world's largest publicly traded oil company.

Lee Raymond, Exxon Mobil Corp. chairman and chief executive officer, announced Thursday that he would retire at the end of the year from the helm of the world's largest publicly traded oil company.

Given today's high prices, oil-rich countries such as Venezuela and Russia increasingly are making it more costly for foreign oil companies to access their natural resources. Tillerson's experience as a former Russia-based executive for Exxon Mobil is considered an important factor underpinning his ascension.

Raymond, 66, has been with the company and its predecessor Exxon Corp. for 42 years, with half of that time spent as a director. Raymond oversaw the November 1999 merger of Exxon and Mobil Corp.

"That was the crowning achievement of his long and successful career," Oppenheimer & Co. oil analyst Fadel Gheit said.

The acquisition of Mobil was strategically important not just for the sake of growing in size, but because it positioned Exxon to be a bigger player in natural gas, which is the business with the most potential for growth in the 21st century for Exxon Mobil and other petroleum giants, Gheit said.

Rex Tillerson, Exxon Mobil Corp. president, is expected to become the company's CEO when Lee R. Raymond retires at the end of the year.

Rex Tillerson, Exxon Mobil Corp. president, is expected to become the company's CEO when Lee R. Raymond retires at the end of the year.

If there are any areas where Exxon Mobil is not as strong as it could be right now, it is in the so-called downstream segment of the business, or refining and marketing, Gheit said. Exxon Mobil sold off assets in these areas following the merger that created it.

"They sold almost 1 million barrels of capacity in the downstream. They could now be making billions of dollars in extra profit," Gheit said.

That said, Gheit added that "Rex is inheriting a company that is in its best financial and operational condition ever."

Raymond, 66, has been chief executive since 1993. He originally was scheduled to retire in August 2003 under company policy, but the board asked him in 2001 to delay his departure.

Exxon Mobil shares fell 48 cents to $58.52 in trading Thursday on the New York Stock Exchange. They have traded in a 52-week range between $44.20 and $64.37.

Last Thursday, Exxon Mobil reported a 32 percent increase in second-quarter profits as it reaped the benefits of soaring oil and natural gas prices.

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