Up $10.9 Billion, Exxon Worries About New Tax

In this Jan. 27, 2007 file photo, a gasoline tanker delivers fuel to an Exxon station in Keller, Texas. Exxon Mobil said Thursday, May 1, 2008, its earnings for the first three months of the year rose to $10.9 billion, or $2.03 per share, up from $9.3 billion, or $1.62 per share, a year ago. But the latest results fell short of the record $11.7 billion profit Exxon Mobil earned in the final quarter of 2007. (Donna Mcwilliam - AP)

But the company made less money than last year in its refining and marketing operations. As rapidly as prices for gasoline and diesel fuel have risen in the past four months -- the national average prices for unleaded regular gas and diesel hit new records yesterday at $3.623 and $4.251, according to the American Automobile Association -- they still haven't kept up with rising crude oil prices, Exxon said.

Exxon's refining and marketing profits totaled $1.2 billion, down 39 percent from the same period of 2007. Exxon's Cohen said the company earned less than a nickel a gallon in refining and marketing.

Exxon's profits grew less than those of some other giant integrated oil companies, in part because its oil and gas production declined about 5.5 percent. That disappointed analysts. Not counting the loss of production in Venezuela, which Exxon exited in a contract dispute over the government's move to take a majority stake in the company's oil operations, its worldwide oil and gas production dropped 3 percent. The causes were sharp declines in aging U.S. and European fields and contracts with Angola that give the government a larger share of production as prices rise.

While Exxon's Hubble said the company had 12 major production projects coming on line this year, descendants of the company's legendary founder, John D. Rockefeller, said on Wednesday that it should be turning away from oil and gas and toward alternative fuels and cleaner technologies.

"They are fighting the last war, and they're not seeing they're facing a new war," said Peter O'Neill, the founder's great-great-grandson, who heads a Rockefeller family . He said a group of family members would support four resolutions about the environment and corporate governance at Exxon's May 28 annual meeting.

Exxon's Cohen said he had met with the family members several times, and he played down the chances that they would prevail at the annual meeting. He said they were only "a handful" of family members and owned just .006 percent of the company's 5.4 billion outstanding shares.

The number of outstanding shares continues to decline, however, as the company buys back stock. Hubble said the company had spent $8 billion buying back shares in the first quarter as a way to boost the value of the stock for shareholders. That exceeded the company's $5.5 billion capital spending budget.

The buyback program has drawn criticism from those who say the money should be used to boost oil and gas supplies. Rep. Edward J. Markey (D-Mass.) said he would introduce legislation that would levy a 10 percent fee on share buybacks and redirect the money to low-income fuel assistance programs and renewable energy research.

Cohen said that Exxon had boosted its capital spending program for this year by 30 percent and that it was able to "fully fund all the attractive opportunities we have."