Financial Analysis of Exxon Mobil Corporation

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This report consists of financial analysis of Exxon Mobil Corporation and it is based on the company annual report for the fiscal year ended December 31, 2006, on the company’s official documents placed at their website and on other appropriate sources. For convenience and simplicity, in this report the terms ExxonMobil, Exxon, Esso and Mobil, as well as terms like Corporation, Company, their and its, are sometimes used as abbreviated references to specific affiliates or groups of affiliates. This report doesn’t include calculation of share’s fair value and potential of its growth in comparison with current market price, but analysis based recommendation for Exxon Mobil shares is made in the report conclusion. Company overview

Exxon Mobil Corporation, formerly named Exxon Corporation, was incorporated in the USA in 1882. Mobil Corporation became a wholly-owned subsidiary of Exxon Corporation in 1999, and Exxon changed its name to Exxon Mobil Corporation (Exxon Mobil Form 10-K for US Securities and exchange commission). It’s an integrated oil and gas company with several divisions and hundreds of affiliates over the world. Divisions and affiliated companies of ExxonMobil operate or market products in the United States and most other countries of the world. Their principal business is energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. Exxon Mobil is a major manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a wide variety of specialty products. Exxon Mobil also has interests in electric power generation facilities. Affiliates of Exxon Mobil conduct extensive research programs in support of these businesses. Nowadays the company has the largest energy resource base of any non-government company, and it’s the world’s largest non-government natural gas marketer and reserves holder. Consumers know the best of its brand names: Exxon, Mobil and Esso. Exxon are the world 's largest fuels refiner and manufacturer of lube basestocks used for making motor oils. It has refining operations in 26 countries, 42 000 retail services stations in more than 100 countries and lubricants marketing in almost 200 countries and territories. The company markets petrochemical products in more than 150 countries. Ninety percent of its petrochemical assets are in businesses that are ranked number 1 or number 2 in market position. Industry overview

According to PFC Energy report (January 2007, Exxon Mobile Corporation tops the list of biggest publicly traded companies in the oil and gas industry based on 2006 year-end market capitalization. The company competes on its traditional markets with other the world’s biggest listed energy groups like US based Chevron and ConocoPhillips, Europe’s BP and Royal Dutch Shell. Regardless of the fact that the mentioned above companies are really huge, they are not the rule makers on international oil market and lose their positions very rapidly. After the surge in crude oil prices since 2002, a new group of oil and gas companies has risen on the scene. These companies identified by Financial Times (Hoyos C., 2007) are Saudi Aramco, Russia’s Gazprom, CNPC of China, NIOC of Iran, Venezuela’s PDVSA, Brazil’s Petrobras and Petronas of Malaysia. Most of them are state-owned. They control almost one-third of the world’s oil and gas production and more than one-third of its total oil and gas reserves. In contrast, Exxon Mobil, Chevron, BP and Royal Dutch Shell together produce about 10 per cent of the world’s oil and gas and hold just 3 per cent of reserves. The real world biggest company is Saudi Aramco, which after 2002 launched its most ambitious expansion programme and aims to boost production capacity from 11 million barrels a day – or 13 per cent of today’s...
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