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ALESSANDRO CHIAVARI/10393412
ETTORE CERABOLINI/10356491
SIMONE CORTI/10341362
EMRE BUYUK/10476157
HISTORY
H ISTORY
In 1859, Colonel Edwin Drake and Uncle Billy Smith drill the first successful oil well in
Titusville, Pennsylvania. The colonel's discovery triggers an oil boom that parallels the gold rush
of a decade earlier. ExxonMobil Corp. was formed in 1999 by the merger of two major oil
companies, Exxon and Mobil. Both Exxon and Mobil were descendants of the John D.
Rockefeller Corporation, the Standard Oil, which was established in 1870.
Over the last 125 years ExxonMobil has evolved from a regional marketer of kerosene in the
U.S. to the largest publicly traded petroleum and petrochemical enterprise in the world.
O VERVIEW
As a top company in the Oil and Gas industry, ExxonMobil specialize in producing Fuels,
Lubricants and Petrochemicals.
It is not necessarily the oil standard, but ExxonMobil is the world's largest integrated oil
company (ahead of Royal Dutch Shell and BP). ExxonMobil engages in oil and gas exploration,
production, supply, transportation, and marketing worldwide. In 2013, the company reported
proved reserves of 25.2 billion barrels of oil equivalent, including its major holdings in oil sands
through Imperial Oil. ExxonMobil's 31 refineries in 17 countries have a throughput capacity of
5.3 million barrels per day. The company supplies refined products to more than 19,000 gas
stations worldwide (including almost 10,000 in the US). ExxonMobil is also a major
petrochemical producer.
RANKINGS
Top 3 Competitors
S&P 500
BP P.L.C.
Chevron Corporation
HISTORY
Management Board
Board Committees
Andrew P. Swiger
Darren W. Woods
Jack P. Williams
Mark W. Albers
Michael J. Dola
The Board appoints Committees to help carry out its duties. In particular, Board Committees
work on key issues in greater detail than would be possible at full Board meetings. Each
Committee reviews the results of its meetings with the full Board.
E XXON M OBIL
AS AN I NDUSTRY
ExxonMobil Corp. explores, develops and distributes crude oil and natural gas. The company
through its divisions and affiliated companies, engages in its 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. It
manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene
and polypropylene plastics and a variety of specialty products. The company also has interests in
electric power generation facilities. It operates business under three segments: Upstream,
Downstream and Chemical.
The Upstream segment is organized and operates to explore for and produce crude oil and
natural gas.
The Downstream segment manufactures and sells petroleum products. The refining and
supply operations encompasses global network of manufacturing plants, transportation systems,
HISTORY
and distribution centers provides fuels, lubricants, and other high-value products and feedstocks
to customers.
The Chemical segment operates to manufacture and sell petrochemicals. It supplies olefins,
polyolefin's, aromatics, and a wide variety of other petrochemicals.
Key Financials
Stakeholders
Million of US$
Suppliers
160,000
Revenues
407,666
Employees
75,000
Profits
32,580
Countries
120
Assets
346,808
Shareholders
2.5 Million
METHODOLOGY
M ETHODOLOGY
This Balanced Scorecard we adopted follows the methodology proposed by Kaplan and
Norton. We started from the understanding of the Vision and main corporate Strategy of
ExxonMobil and subsequently moved toward the specific indicator. While respecting the Kaplan
and Norton division in 4 parts we were also focused on finding indicators that could, whenever
possible, give a valuable insight of the tre main sectors in which ExxonMobil operates, that can
be considerate like specific industries themselves: Upstream, Downstream, Chemicals. Moving
into each perspective the reader will find a brief description of each of the indicator provided
along with the explained formula used in the calculation, if needed. Together with the description
and the formula there will be a Methodology paragraph that explains why that indicator has
been chosen. In the final part of each indicators section are shown the calculations (when some
data has to be manipulated), results (which can appear both in tables or in graphs), and when
available the comparison with British Petroleum (BP), chosen as a peer competitor.
In order to make it easier to the reader to have a comprehensive view of the company and of
the scorecard we collected every critical thought made upon the indicators directly into the final
chapter, called Critical Analysis.
METHODOLOGY
LEARING
&
GROWTH
PER.
INTERNAL
PERSPECTIVE
CUSTOMER
PERSPECTIVE
FINANCIAL
PERSPECTIVE
Increasing
long-
term
value
Becoming
leader
in
each
of
its
activity
EPS
FCFF
ROCE
CAPEX REVENUES
Raising
Shareholders
Value
Enhancing
Generation
of
Cash
Increasing
Operational
Profitability
Investing
in
High-
Value
Opportunities
Brand
Equity
Value
Increasing
Worldwide
Visibility
Product
Portfolio
Adding
New
Product
Groups
Sales Volume
Distance
of
Delivery
Market
Share
Increasing
Sales
Reducing
Logistics
Cost
Stabilizing
Market
Share
GHG
Emissions
Chemicals
Production
Capacity
Production
Repl.
Rate
Refining
Cap.
&
Utilization
Rate
Extraction
cost
per
barrel
Providing
Better
Environ.
Increasing
Chemical
Production
Balancing
Extraction
Capacity
Improving
Downstream
Volume
Oper.
Excellence
Employment
Rates
by
region,
gender,
minority
Spill Incidents
Process/Personnel
Safety
Events
Employment
o f
diverse
workforce
Keeping
up
with
the
Environmental
Balance
Increasing
Safety
in
Workplace
FINANCIAL PERSPECTIVE
F INANCIAL P ERSPECTIVE
I NCREASING G ENERATION
OF
C ASH FCFF
The Free Cash Flow to Firm is a measure of financial performance that expresses the net
amount of cash that is generated for the firm, allocated to all of its investors, and consists of
expenses, taxes and changes in net working capital and investments.
FCFF = EBIT 1 Tax Rate + D&A NWC CapEx
Where: Tax Rate is the average companys tax rate. D&A stands for depreciation and
amortization. is the change in Net Working Capital (payables, receivables, inventory).
is the capital expenditure in fixed assets (e.g. new plants, maintenance of existing ones).
Methodology
FCFF is one of the primary concepts in valuing a company, as it is a clear measure of the
ability of the company to generate more cash than it spends. This indicator fits very well the oil
and gas companies because it enables to compare companies by setting aside the very high level
of costs associated with non-cash items, such as depreciation, depletion, amortization.
Furthermore, commodity prices, which are related to supply, demand and political scenarios, can
move up or down significantly in the short-mid period; a risk that needs to be mitigated. To this
end, stable cash flows can prove a companys ability to hedge risks without impairing operations.
Calculations, Results & Comparison
ExxonMobil
Cash Flow from Operations (CFO)
Capital Expenditures (CapEx)
Interest Expense
Tax Rate
Free Cash Flow to Firm
2009
28.440
22.430
548
43%
6.248
2010
48.410
26.870
259
41%
21.645
2011
55.350
30.980
247
42%
24.475
2012
56.170
34.270
327
39%
22.029
2013
44.910
33.670
132
42%
11.295
British Petroleum
Cash Flow from Operations (CFO)
Capital Expenditures (CapEx)
Interest Expense
Tax Rate
Free Cash Flow to Firm
2009
17.760
13.230
460
39%
4.711
2010
8.820
11.930
454
N/A
N/A
2011
13.820
11.130
492
39%
2.882
2012
12.920
14.650
533
48%
-1.472
2013
13.500
15.690
540
24%
-2.061
10
FINANCIAL PERSPECTIVE
EBIT
Capital Employed
The Capital Employed as shown in the denominator is the sum of shareholders equity and
debt liabilities, and can be calculated as: Total Assets Current Liabilities. Instead of using the
capital employed at an arbitrary point of time we prefer to use the Average Capital Employed,
taking the average of the opening and closing capital of the year.
Methodology
ROCE is a performance measure ratio used in capital-intensive and long-term oriented
industries, such as Oil and Gas, to show whether the capital has been used wisely or not. It is
used to compare the performance of two businesses and for assessing whether a business
generates enough returns to pay for its cost of its capital. Thus, ROCE should always be higher
than the rate at which the company is borrowing; otherwise any incremental borrowing will
reduce shareholders earnings.
The main drawback of ROCE is that it measures return against the book value of assets in the
business. As these are depreciated the ROCE will increase even though cash flow has remained
the same. Thus, older businesses with depreciated assets will tend to have higher ROCE than
newer, possibly better businesses. In addition, while cash flow is affected by inflation, the book
value of assets is not. Consequently revenues increase with inflation while capital employed
generally does not (as the book value of assets is not affected by inflation).
Calculations, Results & Comparison
ExxonMobil
Total Assets
Current Liabilities
= XOM Capital Employed
Average Capital Employed
EBIT
ROCE
2009
2010
2011
2012
2013
233.320 302.510 331.050 333.800 346.810
52.060 62.630 77.510 64.140 71.720
181.260 239.880 253.540 269.660 275.090
210.570 246.710 261.600 272.375
42.560 58.210 57.540 43.770
20%
24%
22%
16%
11
FINANCIAL PERSPECTIVE
British Petroleum
Total Assets
Current Liabilities
= Capital Employed
Average Capital Employed
EBIT
ROCE
2009
2010
2011
2012
2013
146.120 173.900 188.580 184.850 184.570
36.730 52.910 53.910 46.960 43.960
109.390 120.990 134.670 137.890 140.610
115.190 127.830 136.280 139.250
17.950 21.110 12.860 13.290
16%
17%
9%
10%
All the data are in million of US$
Table 2
I NCREASE
SHAREHOLDERS VALUE
EPS
It represents the portion of a companys profit allocated to each outstanding share of common
stock. It is calculated as follows:
EPS =
Preferred stock rights have precedence over common stock. Therefore, dividends declared on
preferred shares are subtracted before calculating the EPS.
Methodology
EPS is the key indicator when we focus on the shareholders value as this ratio is a main
driver of the stock price: even though cash flow and free cash flow are more instructive, the
market pays attention to and reacts to earnings.
Calculations, Results & Comparison
ExxonMobil
Net Income After Extraordinaries
Basic Shares Outstanding
EPS
2009
19.280
4.830
3,99
2010
30.460
4.890
6,23
2011
41.060
4.870
8,43
2012
44.880
4.630
9,69
2013
32.580
4.420
7,37
British Petroleum
Net Income After Extraordinaries
Preferred Dividends
Net Income Available to Common
Basic Shares Outstanding
EPS
2009
10.620
1,28
10.620
18.730
0,57
2010
-2.410
1,3
-2.410
18.790
-0,13
2011
16.030
1,25
16.030
18.900
0,85
2012
6.950
1,26
6.950
19.030
0,37
2013
15000
1,28
150
18.930
0,01
ExxonMobil does not allow preferred stock. Net Income are in million of US$.
Table 3
12
FINANCIAL PERSPECTIVE
I NVESTING
IN
AND
E ARNINGS
2009
20.704
3.196
3.148
17.107
1.781
2.309
2010
27.319
2.505
2.215
24.097
3.567
4.913
2011
33.091
2.120
1.450
34.439
4.459
4.383
2012
36.084
2.262
1.418
29.895
13.190
3.898
2013
38.231
2.413
1.832
26.841
3.449
3.828
45,000
40,000
35,000
40,000
Upstream
Downstream
Chemicals
35,000
30,000
30,000
25,000
25,000
20,000
20,000
15,000
15,000
10,000
10,000
5,000
5,000
0
2009
2010
2011
2012
2013
Bars represent CapEx and are quoted on the left axis, lines (Earnings) are quoted on the right one.
Figure 1
13
Table 4
CUSTOMERS PERSPECTIVE
C USTOMERS P ERSPECTIVE
S TABILIZING M ARKET S HARE M ARKET S HARE P ERCENTAGE
Market share percentage describes the part of the market under control of the company in
comparison to the overall market.
MS (%) = 100 * (unit sales) / (total market unit sales)
Methodology
Market share is a key indicator for attractiveness of the company, because it well describe
trends in customers choices among company and competitors. It helps to evaluate primary and
selective demand in market. Being a relative indicator, it well fits its role, since it bypass
problems that can rise from the variance that characterizes oil market.
Standing to the available data, MS(%) has to be proxied with two different formulas for the
upstream and downstream sections.
MSup (%) = 100 * (average production per day) / (Global production per day)
MSdwn (%) = 100 * (throughput per day) / (Global consumption per day)
2009
2010
2011
2012
2013
2.387
2.422
2.312
2.185
2.202
3.932
4.447
4.506
4.239
4.175
5.350
5.253
5.214
5.014
4.585
84.493
87.375
87.920
89.765
90.153
84.688
7,48%
6,32%
87.335
7,86%
6,01%
88.483
7,75%
5,89%
89.135
7,16%
5,85%
90.475
7,07%
5,07%
14
CUSTOMERS PERSPECTIVE
British Petroleum
Upstream Total hydrocarbons (thousands of
barrels per day)
Downstream Refinery Throughput (thousands
of barrels per day)
MSup(%)
MSdwn(%)
2009
2010
2011
2012
2013
2.492
2.460
2.319
2.225
2.426
2.352
2.354
1.791
2,85%
2,78%
2,80%
2,66%
2,58%
2,98%
2,47%
1,98%
Table 5
2009
British Petroleum
Total refined product and crude oil sales
(thousands of barrels per day)
2010
2011
2012
2013
6.428
6.414
6.413
6,174
5,887
24.825
25.891
25.006
24,157
24,063
2009
2010
2011
2012
2013
7.585
Table 6
15
7.308
7.175
7.711
CUSTOMERS PERSPECTIVE
OF
D ELIVERY
The average distance of delivery from production represents the interconnection between
different Companys departments. As it says its the average distance between the places where
the refinery physically takes place and the selling stores.
Methodology
It allows understanding how geographically interconnected production and delivery
departments are. A high value of the indicator presumes high costs of connection & stock,
suggesting a higher risk of stockout too.
Calculations, Results & Comparison
There are not available public data about the Companys network, and a quantitative value
could be computed only internally. Although a wider view can be analyzed, looking at the
divisions geography around the world. The two following maps well describe how the two
companies tend to serve with all the divisions the well-known and flourish markets, while they
prefer to consolidate only the upstream in weaker and developing markets.
16
CUSTOMERS PERSPECTIVE
OF
P RODUCTS
The size of the portfolio is the number of products the Company offers in a specific field.
Methodology
The Portfolio describes the differentiation of the products and the number of the potential
customers. From a customer point of view, it also tastes the quality itself, since a big range of
very technical products is directly related on the D&R invested in it and the results achievable.
Calculations, Results & Comparison
ExxonMobil Chemicals division has a portfolio that covers polyethylene products,
hydrocarbon fluid and oxygenated fluid, polypropylene, plasticizers, butyl rubber, synthetic
fluids & lubricant, polymer modifiers, chemical intermediates, specialty elastomers and
tackifying resins. Overall ExxonMobil Chemicals counts 30 different trademark polymers
products & 37 different trademark chemicals & fluids, for a total portfolio size of 67 different
products.
British Petroleum has not a Chemicals division and neither has products in all the markets
ExxonMobil compete. Indeed the only Chemicals market in which British Petroleum compete is
synthetic fluids & lubricant, with a smaller portfolio.
17
CUSTOMERS PERSPECTIVE
18
BETTER ENVIRONMENT
extracting
and
processing
of
19
- GHG
EMISSION
B ALANCING
EXTRACTION CAPACITY
- P RODUCTION
REPLACEMENT RATE
The reserve-replacement ratio measures the amount of proved reserves added to a company's
reserve base during the year relative to the amount of oil and gas produced.
It is calculated as extensions and discoveries, improved recovery, revisions, purchases and
sales of proved reserves, divided by production
Methodology
This is one of the primary metrics used to assess an oil and gas company because it measures
the amount of added proved reserves relative to the amount of hydrocarbon produced.
It is a very important ratio because if for instance it falls below 100%, then the company is
depleting its own reserves and will eventually run out of oil.
See how the definition of proved reserves is: Quantity of energy sources estimated with
reasonable certainty, from the analysis of geologic and engineering data, to be recoverable from
well established or known reservoirs with the existing equipment and under the existing
operating conditions
Calculations, Results & Comparison
ExxonMobil 2013 Replacement Rate: 103%
O PERATIONAL
EXCELLENCE
- E XTRACTION
Cost substained by the company, including the operating and capital costs, to extract one
single barrel of crude oil in the upstream segment. We calculated it backwards as follows:
Extraction cost per barrel = Revenues per barrel Earnings per barrel
Methodology
The cost of pumping a barrel of oil out of the ground depends on a variety of factors,
including the size and accessibility of the field, political factors (for example in the Iraq region),
20
also the difference between onshore and offshore extraction is one of the major creator of the
difference in the cost.
In the following weve reported the worldwide average of costs, earnings and revenues,
calculated on the base of the data for every geographical division used by the companies.
This data is very important to see how a company is able to sustain the lower costs, so to
make the higher margin. It is also very important to a company to maintain the costs under the
BEP (Break even point) so to make no losses on the oil.
This indicator in conjunction with production figures is used to examine revenue and costs on
a per-unit-of-production basis. Revenue per barrel of oil equivalent (BOE) of production is tied
closely to the prevailing market price for oil and gas.
ExxonMobil
Revenues
Earnings
Average
Total
Costs
2009
45,58
11,76
33,82
2010
53,04
14,71
38,33
2011
68,11
20,80
47,31
(dollars
per
barrel
of
net
oil-equivalent
production)
2012
68,68
19,12
49,56
2013
69,66
17,45
52,21
British
Petroleum
Revenues
Earnings
Average
Total
Costs
2009
56,26
11,08
45,18
2010
73,41
15,33
58,08
2011
101,29
16,97
84,32
2012
102,10
15,70
86,40
2013
99,24
14,55
84,69
Profit
Margin
ExxonMobil
British
Petroleum
2009
26%
20%
2010
28%
21%
2011
31%
17%
2012
28%
15%
2013
25%
15%
2009
384
267
1671
2010
408
263
1693
21
2011
423
252
1586
2012
418
251
1466
2013
431
280
1964
I MPROVING
&
I NCREASING
CHEMICAL PRODUCTION
C HEMICAL
PRODUCTION
CAPACITY
ExxonMobil Chemical is one of the largest chemical companies in the world, with a unique
portfolio of commodity and specialty businesses. The company has world-scale manufacturing
facilities in all major regions of the world, and their products serve as the building blocks for a
wide variety of everyday consumer and industrial products.
22
Methodology
Worldwide chemical demand growth improved in 2013.Most chemical demand growth is in
Asia Pacific, driven by manufacturing of industrial and consumer products both for worldwide
export and to serve the growing Asian middle class. Asia Pacific has accounted for more than
two-thirds of global chemical demand growth since 2000, and we expect this trend to continue.
Over the next decade, ExxonMobil expects global chemical demand to grow by 50 percent,
driven by improving prosperity in developing countries
Growing chemical demand is spurring new capacity investments around the globe,
particularly in North America with its abundant supplies of natural gas liquids. This has greatly
improved the global competitiveness of existing assets, enabling North American producers to
export chemical products competitively to growth markets around the world.
So taking into account the demand, the total production of chemical in ExxonMobil facilities
has to be increased year by year and Exxon is going to do it increasing capacity of exhisting
facilities and also building new facilities in particular in North America and also in developing
countries where an expansion is being progressed that will increase the sites ethylene and
polymer
capacity,
and
add
ethylene
glycol
production.
Also
to
be
consi
7000.0
6000.0
North
America
5000.0
Europe
4000.0
Asia
Pacic
Middle
East/Other
3000.0
Total worldwide
2000.0
BP
1000.0
-
2009
2010
2011
2012
Figure 2
23
2013
dered that Singapore is now ExxonMobil largest integrated petrochemical complex and
accounts for about one-fourth of the companys global chemical capacity.
Calculations, Results & Comparison
Ethylene
5,000
Polyethylene
4,000
Polypropylene
3,000
Paraxylene
2,000
1,000
0
2009
2010
2011
2012
24
2013
25
Methodology
It is clear that figures in incidents in workplace happened during 2013 allow us to assess the
position of the company through comparisons with its competitor, British Petroleum, in terms of
desired safety level in workplace. That is the reason why we have chosen a non-financial
indicator which basically gives us the figures and let us compare both figures.
Results
and
Comparisons:
In
2013,
British
BY
R EG ON ,
26
the cumulative employee number. The smallest number is allocated to Latin America, as 3.9
thousand workers.
ExxonMobil promotes leadership opportunities
for women and works to improve the gender
balance within the company through all aspects of
the
employment
relationship,
including
27
K EEP NG U P
W TH THE
28
CRITICAL ANALYSIS
C RITICAL A NALYSIS
As it can be read over the report, ExxonMobil achieved strong financial and operating results
in 2013 and continued to advance a unique and balanced set of profitable growth opportunities
across its businesses.
The company achieved strong operating and financial performance this year despite global
economic challenges and uncertainty. Earnings were lower in 2013, in line with industry
conditions, while its leadership position within the industry continues in many key areas. In
particular, a sustained focus on safety and the collective commitment of company employees and
contractors around the world resulted in improved overall safety performance versus 2012.
ExxonMobil also has maintained its relentless focus on operational excellence and risk
management.
The company delivered earnings of $32.6 billion and a return on capital employed of 17
percent. Robust operating cash flow enabled ExxonMobil to fund $42.5 billion in capital and
exploration expenditures to advance large, new projects and bring energy to world markets,
while distributing $25.9 billion to shareholders in the form of dividends and share purchases to
reduce shares outstanding. Over the last five years, ExxonMobil distributed $131 billion to its
shareholders, while dividends per share have increased by 59 percent, including an 11 percent
increase in the second quarter of 2013.
By looking into details, we established a few critical highlights with respect to financial
perspective. First of all, comparing the free cash flow of Exxon and BP, we can notice that
Exxon has been healthier during the last years, providing shareholders' with always increasing
dividends and probably building a solid financial base. However a decreasing Free cash flow is a
negative sign as it's symptom of margin (as you can see from table1 costs remain quite stable). In
most companies this can be caused by a loss in a competitive advantage, but given the nature of
the commodity industry, that is also due to the decrease in the price per barrel. Moreover, in
terms of increasing operational profitability, we believe that ExxonMobil continues to provide
high return on capital employed ratios, (60% higher than BP). Even if this ratio has slightly
decreased in the last two years, it still remains an evidence of the strong commitment that
ExxonMobil makes high value investments.
To this end, those sub strategies of Exxon should be highlighted:
29
CRITICAL ANALYSIS
1. Selectivity not velocity in their approach to capital investment it is not about how much
you spend but also what you spend on that counts.
2. Commitment to driving capital productivity
3. A strong focus on operating excellence
Moreover, Exxons EPS has been increasing continuously from 2009 except for 2013. As a
result, this allowed its price per share to rise higher that it was before the 2009 financial crisis.
The same criticism cannot be done for BP which has not recovered yet; it has lost market
capacity.
Finally, Exxon has adopted different strategies for the investments in the three main divisions.
For what concerns the Upstream, they have increased the Capital Expenditure steadily from 2009
to 2013. This increase does not have a clear effect on the immediate earnings, as they went down
from the $34 billion in 2011 to almost $27 billion in 2013. An explanation for this could be the
price of barrel, that affects for sure the earnings; moreover Exxon's strong long-term focus may
cause short-term profit to decrease, in fact Exxon went into high-value projects (e.g. the jointventure with Rosneft about technologically advanced drills in Antarctica) that will not bring
earnings or competitive advantages as long as the price of oil stays low, but they will surely do
afterwards. Downstream and Chemicals on the opposite side show a negative trend (2009-2013)
in CapEx which has no clear effect of the earnings. That may be the sign that energy efficiency
and the proprietary technologies developed and owned by Exxon in these two work-intensive
areas has brought a competitive advantage in these industries.
Considering the customer perspective, we made following statements to clarify the companys
position. First, both XOM and BP global market shares of upstream and downstream are slowly
decreasing with the rise of the world demand and consumption. This trend suggests that other
competitors are emerging or have increased their production, but overall the results can confirm
a stable market share detained by ExxonMobil. Next, the XOM goal of increasing sales have not
been reached, since sales have been diminishing since 2010, with a warning loss between 2012
and 2013. On the other hand BP experienced differently: managing a smaller amount of products,
it has been able to increase the size of sales of a relevant value between 2012 and 2013,
achieving better results than 2010. In addition, while the index cannot be computed,
considerations on the geography of divisions could be interesting. In fact, what emerges from the
maps is that both BP and XOM have very solid networks in developed markets of North America,
30
CRITICAL ANALYSIS
Europe, Arabia, China and Australia. It aligns perfectly with the try to reduce logistic costs
where the markets are well known. For less profitable or emerging markets both the companies
are trying to consolidate the upstream presence, but they do not seem to agree on the location of
the best investments: if both are in south America, XOM is also investing in south-central Africa,
while BP is more orientated to Mediterranean Africa. As well, ExxonMobil portfolio is a heavy
one, full of technical products, with a huge range of choices also when customers are dealing
with single particular fields. Overall an index that suggests very positive conclusions in terms of
customers perspective.
We can make following comments with respect to internal perspective. The results of Exxon
shows how upstream and downstream produce the overall major quantity of CO2 gasses, but it is
the chemical industry that has the higher normalized emission. Moreover, the Production Cost
per barrel is very important figure because the Earnings for an Oil and Gas producer, such as
ExxonMobil, are directly correlated to it: Earnings = (Extraction Volume) x (Price per Barrel Production Cost per Barrel). It is clear that as long that price of a barrel stays higher than its cost
at a certain oil well, that well remains profitable and operations continue. On the other hand, if
international supply and demand cause the price to fall, it may happen that extracting oil at
certain wells is more expensive than the possible revenue, hence production at those wells will
be stopped. Exxons average comprehensive cost is $52,21 per barrel, which is significantly
lower than British Petroleum, $84,69 per barrel, but is still an high production cost with respect
to the current oil price. In US its production costs are quite low, at $34 per barrel, while outside
US, where most of the extraction is located, they almost reach $60 per barrel. This means that
two thirds of Exxons production are now harmed by the falling oil prices, and if they dont
recover the oversupply will be an issue that may have a serious impact on the financial statistics
for the next few months/years. Brand value is a typical indicator given to the companies by
external surveys, as for the one that we at the end take as a reliable source, it is the second Oil &
Gas company by brand value but its also one of the only two public company listed on the top
100 Forbes Brand Value, so it is a great achievement for the reach of new stakeholders for the
company.
Finally, further comments could be made about learning and growth perspective. According
to observations we made, ExxonMobil and BP both experienced 6 fatalities in 2013; moreover,
BP had experienced merely 20 safety events whereas 61 safety events were occurred during
ExxonMobil operations in 2013. Additionally, ExxonMobil had caused 330 spills while 74 spills
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CRITICAL ANALYSIS
were experienced by British Petroleum. However, the drilling capacities should be considered to
make a fair comparison.
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