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Consumers on Fumes, Oil Industry Guzzles Profits

By Judd Legum  

"Consumers on Fumes, Oil Industry Guzzles Profits"

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Over the last year, gas prices have increased by 39 percent. Consumers are struggling to pay prices that average $2.23 per gallon. Meanwhile, the oil companies are raking in record profits, giving their executives fat raises and asking for billions in incentives from taxpayers.

OIL INDUSTRY COFFERS SWELLING WITH CASH:
According to the Wall Street Journal, “Exxon Mobil Corp. and Royal Dutch/Shell Group both reported huge increases in first-quarter income, benefiting from the industrywide bonanza also swelling the coffers of their peers: high prices for the oil they pump and high margins for refining it.” [Wall Street Journal, 4/29/05]

RECORD PROFITS FOR EXXON:
Exxon “said net income totaled $7.86 billion, or $1.22 a share, up 44% from $5.44 billion, or 83 cents a share, a year earlier…. Exxon’s results were a record first-quarter take for the oil behemoth… [Wall Street Journal, 4/29/05]

SHELL PROFITS UP 40% FROM LAST YEAR: Shell “reported net income of $6.8 billion … up 40% from $4.85 billion in the first quarter of 2004.” [Wall Street Journal, 4/29/05]

$30 BILLION IN EXTRA REVENUE FOR CONOCOPHILLIPS: The Houston Chronicle reports “ConocoPhillips, the nation’s third-largest oil and gas company, said today that first-quarter earnings soared year-over-year on high oil prices…. Total revenue was $38.9 billion, up from $30.2 billion last year….” [Houston Chronicle, 4/27/05]

EXXON’S HEADACHE — WHAT TO DO WITH $40 BILLION IN CASH?: Exxon Mobil’s “soon-to-retire CEO suddenly has a new anxiety: how to spend the windfall wrought by $55-a-barrel oil. By the end of April, Exxon will have a cash hoard of more than $25 billion…. If oil simply stays where it is now, Exxon’s cash could approach $40 billion in 12 months. By then [Exxon's CEO] is expected to have handed off the top job — and the headache of what to do with all that cash.” [Fortune Magazine]

OIL INDUSTRY EXECUTIVES GET 109.1% RAISE: The recent Wall Street Journal compensation survey found that oil and gas executives’ total direct compensation (2004) was about $16.5 million (median). And the median percent change from 2003 to 2004 was 109.1 percent. This was by far the highest of the industries profiled. [Wall Street Journal CEO Compensation Survey]

BILLIONS IN GIVEAWAYS TO OIL INDUSTRY TUCKED IN ENERGY BILL: In the Energy Policy Act of 2005, oil and gas companies will receive $515 million in authorized spending from the U.S. government, including “$125 million to reimburse oil and gas producers for 115% of the costs of remediating, reclaiming, and closing orphaned wells.” The bill also created a $2 billion ultra-deepwater fund to pay for research that companies are already pursuing without government help. On top of that, the bill provided $3.275 billion in new tax breaks to the oil and gas industry. [Taxpayer.net]

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